<html> <head> <title>Rule 68:02:01:40 Factors for board action.</title> <META NAME="Keywords" Content="Administrative Rules 68:02:01:40"> <META NAME="Description" Content="Administrative Rules 68:02:01:40 Factors for board action."> <meta http-equiv=Content-Type content="text/html; charset=windows-1252"> <meta name=Generator content="Microsoft Word 15 (filtered)"> <style> <!-- /* Font Definitions */ @font-face {font-family:"Cambria Math"; panose-1:2 4 5 3 5 4 6 3 2 4;} /* Style Definitions */ p.MsoNormal, li.MsoNormal, div.MsoNormal {margin:0in; margin-bottom:.0001pt; font-size:12.0pt; font-family:"Times New Roman",serif;} a:link, span.MsoHyperlink {color:blue; text-decoration:underline;} a:visited, span.MsoHyperlinkFollowed {color:purple; text-decoration:underline;} .MsoChpDefault {font-size:10.0pt;} @page WordSection1 {size:8.5in 11.0in; margin:1.0in 1.25in 1.0in 1.25in;} div.WordSection1 {page:WordSection1;} --> </style> </head> <body lang=EN-US link=blue vlink=purple> <div class=WordSection1> <p class=MsoNormal style='text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>68:02:01:40.&nbsp;&nbsp;Factors for board action.</b> 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:</p> <p class=MsoNormal style='text-align:justify'>&nbsp;</p> <p class=MsoNormal style='text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (1)&nbsp;&nbsp;Project impact factors:</p> <p class=MsoNormal style='text-align:justify'>&nbsp;</p> <p class=MsoNormal style='text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (a)&nbsp;&nbsp; Economic impact of primary jobs created or retained;</p> <p class=MsoNormal style='text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (b)&nbsp;&nbsp; Net economic effect of increasing or stabilizing the economy on the community, area, and state;</p> <p class=MsoNormal style='text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (c)&nbsp;&nbsp; Competitive effect on existing businesses;</p> <p class=MsoNormal style='text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (d)&nbsp; Support of the public entities of the community and area;</p> <p class=MsoNormal style='text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (e)&nbsp;&nbsp; The amount of the owner's equity contributed to the project;</p> <p class=MsoNormal style='text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (f)&nbsp;&nbsp; The effect of the project on the environment, health, and safety of the people in the community, area, and state;</p> <p class=MsoNormal style='text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (g)&nbsp;&nbsp; Compatibility with economic development plans of the area and state;</p> <p class=MsoNormal style='text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp; (h)&nbsp;&nbsp; Type of business;</p> <p class=MsoNormal style='text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (i)&nbsp;&nbsp;&nbsp; Payroll, pay structure, and employee benefit structure;</p> <p class=MsoNormal style='text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (j)&nbsp;&nbsp;&nbsp; Number of jobs created or retained; and</p> <p class=MsoNormal style='text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (k)&nbsp;&nbsp;In the case of multifamily housing, the impact of the project on the availability of workforce within the project area;</p> <p class=MsoNormal style='text-align:justify'>&nbsp;</p> <p class=MsoNormal style='text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (2)&nbsp;&nbsp;Business feasibility factors:</p> <p class=MsoNormal style='text-align:justify'>&nbsp;</p> <p class=MsoNormal style='text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (a)&nbsp;&nbsp; The potential success of the business and the potential for creating quality jobs and the growth of those jobs;</p> <p class=MsoNormal style='text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (b)&nbsp;&nbsp; The character, experience, management record, and background of the applicant;</p> <p class=MsoNormal style='text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (c)&nbsp;&nbsp; The capacity of the applicant to repay the loan. In determining the capacity of the applicant, the board shall consider the following:</p> <p class=MsoNormal style='text-align:justify'>&nbsp;</p> <p class=MsoNormal style='text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (i)&nbsp;&nbsp;&nbsp;&nbsp;The amount of the loan;</p> <p class=MsoNormal style='text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (ii)&nbsp;&nbsp;&nbsp;The economic feasibility of the project;</p> <p class=MsoNormal style='text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (iii)&nbsp;&nbsp;The ability of the applicant to service the debt from cash flow of operations, capital, or collateral;</p> <p class=MsoNormal style='text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (iv)&nbsp;&nbsp;&nbsp;The financial status of the project, business plan, and applicant;</p> <p class=MsoNormal style='text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (v)&nbsp;&nbsp;&nbsp;&nbsp;The satisfaction of engineering, legal, and environmental regulations; and</p> <p class=MsoNormal style='text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (vi)&nbsp;&nbsp;&nbsp;The availability of necessary public utilities;</p> <p class=MsoNormal style='text-align:justify'>&nbsp;</p> <p class=MsoNormal style='text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (d)&nbsp; The total capitalization of the project, which includes all capitalization subordinated to the REDI fund;</p> <p class=MsoNormal style='text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (e)&nbsp;&nbsp; The amount, terms, and conditions of the loan and their compatibility with the needs of the business and the REDI fund; and</p> <p class=MsoNormal style='text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (f)&nbsp;&nbsp; The availability of sufficient collateral to secure the interests of the REDI fund.</p> <p class=MsoNormal style='text-align:justify'>&nbsp;</p> <p class=MsoNormal style='text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>Source:</b> 34 SDR 68, effective September 13, 2007; 46 SDR 123, effective May 12, 2020.</p> <p class=MsoNormal style='text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>General Authority:</b> SDCL <A HREF="/statutes/DisplayStatute.aspx?Type=Statute&Statute=1-16G-5">1-16G-5</A>, <A HREF="/statutes/DisplayStatute.aspx?Type=Statute&Statute=1-16G-8">1-16G-8(8).</A></p> <p class=MsoNormal style='text-align:justify'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>Law Implemented:</b> SDCL <A HREF="/statutes/DisplayStatute.aspx?Type=Statute&Statute=1-16G-5">1-16G-5</A>, <A HREF="/statutes/DisplayStatute.aspx?Type=Statute&Statute=1-16G-8">1-16G-8(8).</A></p> <p class=MsoNormal style='text-align:justify'>&nbsp;</p> </div> </body> </html>