S.D. Admin. R. 68:01:02:07

Current through Register Vol. 51, page 56, November 4, 2024

Section 68:01:02:07 - Impermissible uses of loan proceeds

The borrower may not use the proceeds for any of the following purposes:

(1) Agricultural production;

(2) Transfer of ownership, unless the loan will keep the business from closing, prevent the loss of employment opportunities in the area, or provide expanded job opportunities;

(3) Financing or refinancing the preliminary design stage or existing debt;

(4) Assistance in excess of what is needed to accomplish the purpose of the ultimate recipient's project;

(5) Distribution or payment to the owners, partners, shareholders, or beneficiaries of the ultimate recipient or members of their families if such persons will retain any portion of their equity in the ultimate recipient;

(6) Charitable institutions that would not have revenue from sales or fees to support the operation and repay the loan, churches, organizations affiliated with or sponsored by churches, and fraternal organizations;

(7) Assistance to government employees, military personnel, or principals or employees of the intermediary or organizations for which such persons are directors or officers or in which they have ownership of 20 percent of more;

(8) A loan to an ultimate recipient who has an application pending with or a loan outstanding from another intermediary involving an IRP revolving fund if the total IRP loans would exceed the limits established in Sec. 4274.331 (b) of Rural Development Instruction 4274-D as of February 6, 1998;

(9) Community antenna television services or facilities;

(10) Any illegal activity;

(11) Any project that is in violation of either a federal, state, or local environmental protection law or regulation or an enforceable land use restriction unless the assistance given will result in curing or removing the violation;

(12) Lending and investment institutions and insurance companies; and

(13) Golf courses, race tracks, or gambling facilities.

S.D. Admin. R. 68:01:02:07

16 SDR 158, effective 3/25/1990; 27 SDR 66, effective 1/4/2001.

General Authority: SDCL 1-16B-14(4).

Law Implemented: SDCL 1-16B-4, 1-16B-37, 1-16B-44.