<html> <head> <title>Rule 74:05:11:20 Assistance agreements.</title> <META NAME="Keywords" Content="Administrative Rules 74:05:11:20"> <META NAME="Description" Content="Administrative Rules 74:05:11:20 Assistance agreements."> <meta http-equiv=Content-Type content="text/html; charset=windows-1252"> <meta name=Generator content="Microsoft Word 14 (filtered)"> <style> <!-- /* Font Definitions */ @font-face {font-family:Calibri; panose-1:2 15 5 2 2 2 4 3 2 4;} /* Style Definitions */ p.MsoNormal, li.MsoNormal, div.MsoNormal {margin:0in; margin-bottom:.0001pt; text-align:justify; font-size:12.0pt; font-family:"Times New Roman","serif";} @page WordSection1 {size:8.5in 11.0in; margin:1.0in 1.0in 1.0in 1.0in;} div.WordSection1 {page:WordSection1;} --> </style> </head> <body lang=EN-US> <div class=WordSection1> <p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size: 12.0pt'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b><span style='font-weight:bold'>74:05:11:20.&nbsp;&nbsp;Assistance agreements.</span></b> If an application is approved for funding, the board shall execute an assistance agreement with the sponsoring entity. The board shall establish the terms and conditions included in the assistance agreement. Assistance agreements may include the following requirements of the recipient:</span></font></p> <p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size: 12.0pt'>&nbsp;</span></font></p> <p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size: 12.0pt'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (1)&nbsp;&nbsp;To acquire all property rights necessary for the project, including rights-of-way and interest in land needed for the construction, operation, and maintenance of the facility; to furnish title insurance, a title opinion, or other documents showing the ownership of the land, mortgages, encumbrances, other liens, or title defects; and to obtain and record the releases, consents, or subordinations to the property rights for holders of outstanding liens or other instruments as necessary for the construction, operation, and maintenance of the facility;</span></font></p> <p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size: 12.0pt'>&nbsp;</span></font></p> <p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size: 12.0pt'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (2)&nbsp;&nbsp;To provide security as required in &#167;&nbsp;&nbsp;74:05:11:15;</span></font></p> <p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size: 12.0pt'>&nbsp;</span></font></p> <p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size: 12.0pt'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (3)&nbsp;&nbsp;To provide for the receipt of revenues sufficient to meet the requirements of debt service, operation, and maintenance and to establish reserves in an amount sufficient to assure that expenses and payments will be paid on time for loan installments, emergency maintenance, and replacement of assets that have a useful life less than the repayment period of the loan;</span></font></p> <p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size: 12.0pt'>&nbsp;</span></font></p> <p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size: 12.0pt'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (4)&nbsp;&nbsp;To acquire and maintain insurance coverage, including fidelity bonds;</span></font></p> <p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size: 12.0pt'>&nbsp;</span></font></p> <p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size: 12.0pt'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (5)&nbsp;&nbsp;To establish and maintain books and records relating to the construction and operation of the facility and its financial affairs;</span></font></p> <p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size: 12.0pt'>&nbsp;</span></font></p> <p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size: 12.0pt'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (6)&nbsp;&nbsp;To provide the secretary access to all books and records relating to the facility and access to the property of the system so that the secretary may ascertain whether the sponsoring entity is complying with the provisions of this chapter and with the assistance agreement;</span></font></p> <p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size: 12.0pt'>&nbsp;</span></font></p> <p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size: 12.0pt'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (7)&nbsp;&nbsp;To use funds that remain available after all costs to the facility have been paid for needed extensions, enlargements, and improvements of the facility with the written permission of the board;</span></font></p> <p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size: 12.0pt'>&nbsp;</span></font></p> <p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size: 12.0pt'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (8)&nbsp;&nbsp;Not to sell, transfer, lease, or otherwise encumber the facility, any portion of the facility, or interest in the facility without the prior written consent of the board while the funding agreement is in effect;</span></font></p> <p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size: 12.0pt'>&nbsp;</span></font></p> <p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size: 12.0pt'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (9)&nbsp;&nbsp;If the undertaking would obligate the source of funds pledged to repay the assistance agreement, to agree not to borrow money from any source, enter into an agreement, or incur other liabilities in connection with the facility, exclusive of normal maintenance, without the prior written consent of the board;</span></font></p> <p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size: 12.0pt'>&nbsp;</span></font></p> <p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size: 12.0pt'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (10)&nbsp;&nbsp;To agree that, upon default in the payments of principal and accrued interest on the loan or in the performance of any covenant or condition, the board may, at its option, do one or more of the following:</span></font></p> <p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size: 12.0pt'>&nbsp;</span></font></p> <p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size: 12.0pt'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (a)&nbsp;&nbsp;Declare immediately due and payable the entire principal amount then outstanding and the accrued interest and all costs associated with collection of the outstanding balance;</span></font></p> <p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size: 12.0pt'>&nbsp;</span></font></p> <p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size: 12.0pt'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (b)&nbsp;&nbsp;For the account of the borrower, incur and pay reasonable expenses for repair, maintenance, and operation of the facility and other expenses necessary to cure the cause of default; or</span></font></p> <p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size: 12.0pt'>&nbsp;</span></font></p> <p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size: 12.0pt'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (c)&nbsp;&nbsp;Take possession of the facility, repair, maintain, operate, sell, lease, or otherwise dispose of the facility to another entity; and</span></font></p> <p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size: 12.0pt'>&nbsp;</span></font></p> <p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size: 12.0pt'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (11)&nbsp;&nbsp;To secure written approval from the secretary for any changes or modifications in the plans of a facility before or during construction according to conditions and specifications set forth in the assistance agreement.</span></font></p> <p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size: 12.0pt'>&nbsp;</span></font></p> <p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size: 12.0pt'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The board may amend assistance agreements as it considers necessary and circumstances warrant.</span></font></p> <p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size: 12.0pt'>&nbsp;</span></font></p> <p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size: 12.0pt'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b><span style='font-weight:bold'>Source:</span></b> 23 SDR 195, effective May 25, 1997; 40 SDR 14, effective July 29, 2013.</span></font></p> <p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size: 12.0pt'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b><span style='font-weight:bold'>General Authority:</span></b> SDCL <A HREF="/statutes/DisplayStatute.aspx?Type=Statute&Statute=46A-1-60.1">46A-1-60.1</A> to <A HREF="/statutes/DisplayStatute.aspx?Type=Statute&Statute=46A-1-60.3">46A-1-60.3.</A></span></font></p> <p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size: 12.0pt'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b><span style='font-weight:bold'>Law Implemented:</span></b> SDCL <A HREF="/statutes/DisplayStatute.aspx?Type=Statute&Statute=46A-1-60.1">46A-1-60.1</A> to <A HREF="/statutes/DisplayStatute.aspx?Type=Statute&Statute=46A-1-60.3">46A-1-60.3.</A></span></font></p> <p class=MsoNormal><font size=3 face="Times New Roman"><span style='font-size: 12.0pt'>&nbsp;</span></font></p> </div> </body> </html>