§ 42-60. Eligibility requirements.

(a)

Eligible applicants for RLF assistance include:

(1)

Any legal corporate entity, individual, private organization, and federally-recognized Indian tribal group which resides or desires to locate within the geographic boundaries of the county;

(2)

Applicants will be considered without regard to race, color, religion, sex, national origin, age, handicap condition, familial status, or marital status;

(3)

Applicants must demonstrate that the project to be financed will result in private sector new job creation or retention and contributes to the economic development efforts of the Board of County Commissioners;

(4)

Applicants must demonstrate that the request is necessary or appropriate as defined in 24 C.F.R. part 570 (exhibit 1-A must be completed and submitted with all the applications); and

(5)

Applicants must demonstrate that the request meets a national objective as defined in 24 C.F.R. part 570 (exhibit 1-B must be completed and submitted with all applications).

(b)

Eligible activities for RLF assistance within the county include:

(1)

Acquisition, or construction of commercial and industrial buildings and structures;

(2)

Purchase of capitalized machinery and equipment with a useful life of at least five years;

(3)

Acquisition of real property; and

(4)

Removal of architectural barriers which restrict the mobility of elderly or handicapped persons.

(c)

Ineligible activities for RLF assistance include:

(1)

Speculation activities such as land banking and the construction of speculative or unleased buildings;

(2)

Loans which assist the relocation of jobs from another labor area in the state;

(3)

Loans for the purpose of investing in high interest accounts, certificates of deposit, or other investments not directly related to job creation;

(4)

Loans which would create a potential conflict-of-interest for any officer or employee of the county or any current or former member of the loan administration committee provided in section 42-61, or staff who reviews, approves, or otherwise participates in decisions on RLF loans;

(5)

Loans to any applicant who was an original recipient of a CDBG loan from the county and whose repayment is to be a capitalization source of the RLF; and

(6)

Purchase or construction of any building the purpose for which will be the general conduct of government or whose initial occupant is any governmental unit, agency, instrumentality, or subdivision.

(d)

The RLF capital may only be used for debt financing through direct loans. RLF capital cannot be used to:

(1)

Purchase or finance equity in private businesses;

(2)

Subsidize interest payments on existing loans;

(3)

Refinance loans made by other lenders;

(4)

Finance working capital, inventory, or supplies; and

(5)

Purchase an asset owned by the applicant or a principal of the applicant.

(e)

The RLF program is available to make loans to eligible borrowers at interest rates and conditions determined by the Board of County Commissioners to be most appropriate in achieving the goals of the RLF.

(1)

The interest rate may be from three to 5.5 percent below the prime interest rate on the date of loan application, but in no case may the interest rate be less than three percent.

(2)

Where necessary, RLF financing should assist applicants with special credit problems, and therefore may involve greater risks and more lenient terms rather than conventional financing. Nothing in this section should be interpreted to encourage or advocate loans to individuals or firms with adverse credit history or who are insolvent.

(3)

The RLF funds will not be commingled with other county funds or with program income from other CDBG noneconomic development activities. The funds will be deposited into a fund which is interest bearing. All earned interest will be accrued to the RLF.

(f)

In the determination of collateral requirements, the board of county commissioners shall consider the merits and potential economic benefits of each request. When appropriate and practical, RLF financing shall be secured by liens, mortgages, or assignments of rights in assets of assisted firms as follows:

(1)

The lien position of the RLF may be subordinate and made inferior to a lien or liens securing other loans made in connection with the project prior to or concurrent with the RLF loan;

(2)

The RLF shall obtain collateral such as liens on land, buildings, equipment, inventories, receivables, or other available assets of applicants. Such liens may be subordinate only to existing liens of record and other loans involved in the project in accordance with the terms of the RLF contract and loan documents between the applicant and the county; and

(3)

In addition to the above types of security, the RLF may also require security in the form of assignment of patents and licenses, the acquisition of hazard and other forms of insurance, and such other additional security as the board of county commissioners determines is necessary to protect the RLF's interest.

RLF loan requests submitted by closely-held corporations, partnerships or proprietorships dependent for their continuing success on certain individuals will ordinarily be expected to provide and assign life insurance on these key persons to the RLF; and personal guarantees will also be required from principal owners.

(Ord. No. 93-69, § 4)