(1) The following definitions apply to this subchapter:

(a) "Applicant" means a private, nonprofit corporation that applies for certification as a CRDC by the department through a competitive process;

(b) "Assistance grant" means funds awarded by the department to a CRDC for administering economic development activities directly related to submitted work plans consistent with strategic plans approved by the department;

(c) "Business recruitment program" means the marketing of a community to businesses in specific industries best suited for a community;

(d) "Business retention and expansion program" means the assessment of the assets and opportunities of individual companies through periodic surveys, interviews and visitations to establish relationships and early warning systems to flag at-risk businesses that require assistance, and to ensure that public programs meet local business needs;

(e) "Certification" means the criteria and process by which an organization obtains certification for a period not to exceed five years, with annual renewals up to a five year period, and becomes eligible to participate in the Certified Regional Development Corporations Program and to receive an assistance grant. Continued recertification is conditional on department approval;

(f) "Certified Regional Development Corporation (CRDC)" means a private, nonprofit corporation that has been certified by the department through a competitive process to manage and administer funds and programs for the department on a regional basis;

(g) "Community" means a county, an incorporated city or town, a Census Designated Place (CDP), or an Indian reservation;

(h) "Department" means the Department of Commerce provided for in 2-15-1801, MCA;

(i) "Local and regional planning" means a long-range planning process that encourages citizens to develop a mission statement, goals, strategies, and actions used to prioritize the efforts of citizens and communities and guide the development of the economy of a region or a portion of a region;

(j) "Program" means the Certified Regional Development Corporations Program provided for in 90-1-116, MCA;

(k) "Region" means one of not more than 12 service regions. At a minimum, a service region must include two contiguous counties in their entirety;

(l) "Revolving loan fund" means a self-sustaining loan program that provides debt financing to eligible businesses to sustain or develop a region's economy; and

(m) "Technical assistance" means business-related assistance in a one-to-one setting that includes business plan composition, formation, financing, management, and operation of a small business.

(a) an outline of the region the applicant is proposing to represent that includes a description of the communities, economy, demographics, and culture;

(b) evidence the applicant is a nonprofit corporation organized under applicable state and federal laws;

(c) a staffing plan that includes current job titles, job descriptions, and qualifications of primary personnel. At a minimum, the applicant is required to provide 4,160 hours of staff time annually to economic development activities, which must include at least 2,080 hours of professional economic development staff time. The applicant shall include a hiring plan or a contracting plan in meeting this requirement. For the purpose of this rule, economic development activities means work in the development and management of revolving loan funds, business technical assistance, state and federal grants and programs, local and regional planning, business retention and expansion programs, and business recruitment programs all directly related to regional strategic plans;

(d) documentation of the composition of board(s) of directors;

(e) evidence of financial stability that includes:

(i) a copy of the most recent audited or professionally reviewed financial statements of the applicant, including a supplemental schedule or other detailed information to specifically disclose the financial condition and results of operations of the applicant;

(ii) a proposed budget for the applicant that includes sources and uses of funds; and

(iii) any other information deemed necessary by the department to evaluate the financial stability of the applicant;

(f) evidence of matching funds, including those from local governments, in the ratio of $1 for every $1 of assistance grants requested:

(i) matching funds for assistance grants shall be provided through existing or new cash from the applicant's administrative budget;

(ii) the assistance grant awarded may not displace existing funds in the applicant's administrative budget; and

(iii) any other information deemed necessary by the department to document the amount and source of matching funds;

(g) a plan based upon a comprehensive economic development strategic plan model for encouraging and organizing full participation in regional economic development activities, meetings, and projects in the region;

(h) evidence of written, broad-based support from the region;

(i) a plan for the development and publication of a five year strategic plan for the region;

(j) a plan for delivery of, and evidence of the ability to administer a revolving loan fund. To meet a minimum application threshold, the applicant shall include pertinent experience in the management of a revolving loan fund;

(k) a plan for delivery of, and evidence of the ability to provide business technical assistance. To meet a minimum application threshold, the applicant shall include pertinent experience in providing business technical assistance;

(l) evidence of the ability to apply for, facilitate, and manage state and federal grant and loan programs, in particular, department loan and grant programs;

(m) a plan for delivery of, and evidence of the ability to perform local and regional planning. To meet a minimum application threshold, the applicant shall include pertinent experience in local and regional planning;

(n) a plan for performance of a business retention and expansion program (optional);

(o) a plan for performance of a business recruitment program (optional); and

(p) any other information deemed necessary by the department for a complete review of an applicant's proposal for certification as a CRDC.

(2) The procedures for certifying a CRDC are as follows:

(a) the department shall issue a formal request for proposal for interested individuals or organizations to respond to;

(b) the department's staff shall review timely submitted proposals and determine whether to recommend certification of the CRDC. The proposal and staff's recommendation regarding certification shall be forwarded to the department director for a final decision;

(c) the department will review CRDC performance on a quarterly basis for continued program certification; and

(d) any other procedures deemed necessary by the department to certify a CRDC.

(1) The department shall set aside assistance grants annually based upon the following:

(a) $30,000 to each CRDC for providing services to their respective regions based upon receipt of an acceptable work plan. For the purpose of this rule, services means work in the development and management of revolving loan funds, business technical assistance, state and federal grants and programs, local and regional planning, business retention and expansion programs, and business recruitment programs;

(b) the remainder divided among the CRDCs according to the following formula:

(i) 35% shall be distributed based on the number of counties in the region served;

(ii) 25% shall be distributed based on the population of the region served;

(iii) 25% shall be distributed based on the size of the geographic area of the region served; and

(iv) 15% shall be distributed based on the number of communities served;

(c) all assistance grants will be distributed on a quarterly basis, at the department's sole discretion, based upon the performance of the CRDC in meeting submitted work plans for the current year.

(1) As prescribed by the department, allowable administrative expenses for which assistance grants may be used by a CRDC include:

(a) personnel and operating expenses; and

(b) any other expenses deemed necessary by the department to maintain the organization's certification as a CRDC.

(1) Annual reporting requirements for CRDC certification include:

(a) annual updates or revisions of the region served by the CRDC;

(b) annual updates or revisions of the strategic plan on file with the department;

(c) a description of any changes in the services provided by the CRDC to the citizens, communities, and businesses in the region;

(d) an action plan consistent with the strategic plan that identifies goals, actions, and priorities for the coming year in the areas of:

(i) revolving loan fund activity and management;

(ii) business technical assistance;

(iii) the application for and award of department grant and loan programs and other state and federal grant and loan programs;

(iv) local and regional planning;

(v) business retention and expansion programs, if any; and

(vi) business recruitment programs, if any;

(e) a report showing the work accomplished by the CRDC for the preceding year in the areas of:

(i) revolving loan fund activity and management;

(ii) business technical assistance;

(iii) the application for and award of department grant and loan programs and other state and federal grant and loan programs;

(iv) local and regional planning;

(v) business retention and expansion programs, if any; and

(vi) business recruitment programs, if any;

(f) a copy of the CRDC's most recent annual, audited or professionally reviewed financial statements including any supplemental schedules or other detailed information that specifically discloses the financial condition and results of operations of the CRDC; and

(g) any other requirements deemed necessary by the department to maintain certification.

(2) Quarterly reporting requirements for CRDC certification include:

(a) a progress report showing accomplishments in meeting annual work plan objectives in the following areas:

(i) revolving loan fund activity and management;

(ii) business technical assistance;

(iii) the application for and award of department grant and loan programs and other state and federal grants and programs;

(iv) local and regional planning;

(v) business retention and expansion programs, if any; and

(vi) business recruitment programs, if any;

(b) any other requirements deemed necessary by the department to maintain certification.

(1) "Bank" means an organization that is engaged in the business of banking. The term includes savings banks, savings and loan associations, credit unions, and trust companies.

(2) "Certification" means the criteria and process, described herein, by which an organization becomes eligible to participate in the microbusiness finance program as a "certified" MBDC and to apply for a development loan.

(3) "Default" shall be defined in the development loan agreement between the department and MBDC.

(4) "Defaulted loan" means a loan that the borrower has failed to make three or more timely payments of principal and interest, or whose payments of principal and interest are greater than 90 days past due or has otherwise failed to comply with the terms and conditions of the loan agreement.

(5) "Delinquent loan" means a loan that the borrower has failed to make one or two timely payments of principal and interest, or whose payment of principal and interest are greater than one day and less than 90 days past due.

(6) "Department" means the Department of Commerce provided for in 2-15-1801, MCA.

(7) "Deposit account" means a demand, checking, time, savings, or passbook account maintained with a federally insured bank.

(8) "Development loan" means money loaned to a certified MBDC by the department for the purpose of establishing a revolving loan fund from which loans are made directly to microbusinesses, or loans made directly by banks to qualified microbusinesses are guaranteed under the provisions of 17-6-401, MCA, et seq.

(9) "Development loan funds" means the cash proceeds of a development loan and the portion of the revolving loan fund directly provided by the development loan.

(10) "Direct loan program" means a program in which a certified MBDC uses development loan funds for establishing a revolving loan fund from which loans are made directly by the certified MBDC to microbusinesses under the provisions of 17-6-401, MCA, et seq.

(11) "Federally insured bank" means a bank that is insured by the Federal Deposit Insurance Corporation or the National Credit Union Share Insurance Fund.

(12) "Funded" means a certified MBDC that has a development loan balance outstanding and that provides technical assistance and loans to microbusinesses.

(13) "Funded loan loss reserve" means cash reserved for the purpose of self-insuring the MBDC for the cost of loan losses. The funded loan loss reserve shall only be used for covering the cost of loan losses when a loan is charged off. After a loan is charged off, all loan funds recovered by the MBDC shall be credited and deposited to the funded loan loss reserve and revolving loan fund bank account. The funded loan loss reserve (cash) is held in the revolving loan fund bank account and is not available for lending to microbusinesses or for payment of revolving loan fund operating expenses. Funded loan loss reserve cash may be generated from revolving loan fund income.

(14) "Investment bank account" means the deposit account in which department development loan funds, MBDC matching loan funds, and funded loan loss reserve funds may be deposited or transferred to, from the revolving loan fund bank account, for the sole purpose of generating investment income on idle revolving loan fund assets. The investment bank account is a time deposit account maintained with a federally insured bank.

(15) "Loan committee" means the individuals assigned by the board of directors of the MBDC to review and award or deny applications to that MBDC for microbusiness loans.

(16) "Loan guarantee program" means a program in which a certified MBDC uses development loan funds for establishing a revolving loan fund from which loans made directly by banks to qualified microbusinesses are guaranteed under the provisions of 17-6-401, MCA, et seq.

(17) "Management training" means business-related training in a group setting performed for the benefit of microbusinesses and their principals.

(18) "MBDC" means the microbusiness development corporation.

(19) "Microbusiness" means a legal for profit or nonprofit Montana business with fewer than ten full-time equivalent employees and annual gross revenues of less than $1,000,000.

(20) "Microbusiness development corporation" means a nonprofit corporation organized and existing under the laws of the state of Montana to provide management training, technical assistance, and access to capital for the startup or expansion of microbusinesses. Microbusiness development corporations are certified by the department to provide management training, technical assistance, and loans to microbusinesses, as provided in 17-6-408, MCA. Microbusiness development corporations may apply for and, if approved by the department, be awarded a development loan for establishing a revolving loan fund from which loans are made directly by the certified microbusiness development corporation to microbusinesses, or loans made directly by banks to qualified microbusinesses are guaranteed by the microbusiness development corporation.

(21) "Performing loan" means a loan that the borrower is current in its compliance or satisfaction of all loan agreement terms and conditions. A performing loan is not a defaulted, delinquent, or restructured loan.

(22) "Principals" means members, officers, directors, and other individuals directly involved in the operation and management (including setting policy) of a legal entity.

(23) "Program" means the microbusiness finance program established in 17-6-406, MCA.

(24) "Region" means one of not more than 12 multicounty service regions.

(25) "Renewal" means a MBDC that is currently certified, meets the requirements for certification for an additional term and if approved, is awarded an extension of its development loan for an additional term.

(26) "Restructured loan" means a defaulted or delinquent loan that has had its original loan agreement terms and conditions modified by the lender. The agreement to restructure may result from noncompliance or nonsatisfaction of all the loan agreement terms and conditions by the borrower or legal action against the borrower or may simply be an agreement to which both the lender and the borrower consent.

(27) "Revolving loan fund" means all assets obtained through or related to a department development loan and MBDC matching loan funds that are recorded by the MBDC in a separate accounting ledger and which are accounted for along with related liabilities, revenues, and expenses, separate from the MBDC's other assets and financial activities.

(28) "Revolving loan fund bank account" means the deposit account in which revolving loan fund assets that are obtained through or related to a department development loan, MBDC matching loan funds, and the income earned or derived from the operation of the revolving loan fund are deposited by the MBDC.

(29) "Revolving loan fund income" means the proceeds from interest, fees, and any other income earned or derived from the operation of the revolving loan fund.

(30) "Statewide MBDC" means a MBDC that meets all requirements for statewide certification stated herein, and, in addition, has a viable plan to provide specialized services to constituents throughout the state, and does not preempt or duplicate efforts of MBDCs within local communities.

(31) "Technical assistance" means business-related consultation in a one-to-one setting performed for the benefit of microbusinesses and their principals.

(32) "Transitional" means a MBDC that is certified and that has a development loan outstanding but which is not currently offering new loans to microbusinesses with development loan funds. A "transitional MBDC" has selected the installment payment termination option to repay its outstanding development loan balance.

(33) "Unfunded" means a certified MBDC that does not have a development loan balance outstanding.

This rule has been repealed.

This rule has been repealed.

(1) The following information is required to be presented to the department by applicants for certification as a MBDC:

(a) A plan for delivery of management training and technical assistance.

(b) A plan for credit investigation and analysis, and loan analysis of microbusiness loan applicants.

(c) A plan for and evidence of ability to administer a revolving loan fund.

(d) A staffing plan including job titles, job descriptions, necessary qualifications, experience, education and other qualifications of primary manager, and personnel training and supervision.

(e) Evidence of broad-based community support, to include letters of support from persons and institutions throughout the region.

(f) Evidence of matching loan funds in the ratio of $1 for every $6 of development loan funds requested.

(g) Evidence of sufficient operating income generated from the proposed revolving loan fund and/or provided from other income sources of the applicant to ensure the successful operation and management of the revolving loan fund.

(h) Evidence of adequate business clients to include, but not be limited to, a plan for identifying, qualifying and marketing to potential borrowers throughout the region to be served.

(i) A plan for marketing to specific groups including at least, but not limited to, minorities, women and low-income persons.

(j) Evidence that the proposing organization is a nonprofit corporation organized and existing under the laws of the state of Montana.

(k) the department may require such additional information as the department in its discretion deems to be appropriate.

(2) The procedures for selection of certification of MBDC are as follows:

(a) The department will provide a written certification application guide to any interested individuals or organizations.

(b) The department will review proposals and determine whether to recommend certification of the MBDC. The proposal and staff's recommendation will be forwarded to the department director for a decision on certification.

(3) An application for certification as a statewide MBDC shall also be required to provide evidence that it will serve a specialized population or specialized need and that its services do not duplicate services offered by existing "funded" regional certified MBDCs.

(4) To maintain its status as a certified MBDC, a MBDC must be reviewed and recertified every four years.

This rule has been repealed.

(1) The criteria used by the department to make development loans to a certified MBDC will include the criteria required for certification as a MBDC as set forth in ARM 8.99.404 plus the following additional requirements:

(a) legally binding commitment(s) for MBDC operating income other than earned income from the revolving loan fund; and

(b) legally binding commitment(s) for MBDC matching loan funds.

(2) Development loan funds will be awarded pursuant to a promissory note, development loan agreement, and security agreement between the department and the MBDC.

(3) The department will consider the following in determining the amount of a development loan awarded to a MBDC:

(a) financial stability and sources and sufficiency of operating income generated from the proposed revolving loan fund and/or provided from other income sources of the MBDC;

(b) market potential of the MBDC;

(c) expertise and, where applicable, performance of the MBDC in the management of a revolving loan fund;

(d) geographic and rural-to-urban balance in distribution of program funds;

(e) the amount of nondepartment derived funds contributed to the revolving loan fund by the certified MBDC in addition to the required matching loan funds; and

(f) the feasibility of the financial projections for the revolving loan fund provided by the certified MBDC, taking into account market size and activity, historic loan volume, and financial performance of the certified MBDC.

(4) A development loan will not be extended to a certified MBDC unless:

(a) there is adequate assurance of repayment of the development loan based on the fiscal and managerial capabilities of the certified MBDC;

(b) the amount of the development loan together with the required MBDC matching loan funds and other funds available is adequate to achieve the purposes for which the development loan is made; and

(c) any delinquent debt to the federal government or the state of Montana by the MBDC is satisfied. Development loan funds may not be used to satisfy the debt.

(1) The MBDC may apply for a development loan by submitting an application to the department on a form provided by the department. The application shall contain:

(a) a description of all outstanding notes payable and long term debt of the MBDC including copies of all loan agreements, promissory notes, and security agreements for said notes and long term debts;

(b) a copy of the most recent audited financial statements of the organization including if applicable, a supplemental schedule or other detailed information to specifically disclose the financial condition and results of operations of the MBDC;

(c) any other information deemed necessary by the department to evaluate the application.

(2) The department will review the application to determine if the application is complete under ARM 8.99.501 above. The department may, in its discretion, request the MBDC to provide additional information relevant to the evaluation of the applications.

(3) Loan awards will be made at the sole discretion of the department.

(4) Certified MBDCs that have an outstanding development loan principal balance may apply for additional development loan funds provided that:

(a) at least 80 percent of the certified MBDC's total outstanding principal balance of the development loan is currently loaned out to eligible microbusinesses;

(b) the outstanding microbusiness loan receivables of the certified MBDC's revolving loan fund are generally sound; and

(c) the MBDC is in compliance with all applicable statutes, administrative rules, and loan agreements with the department.

(2) The interest rate for each development loan will be established at the time the promissory note is signed and may be adjusted annually, provided that the rate does not exceed the maximum rate specified in the development loan agreement.

(1) Development loans shall be renewable at intervals of no more than four years.

(2) Development loans shall require, at a minimum, the payment of interest on a quarterly basis.

(3) The loan agreement shall require that the MBDC provide management training and preloan and postloan technical assistance as described in the MBDCs application for certification.

(4) The loan agreement will specify reporting obligations of the MBDC to the department, including scheduling and format of reporting.

(5) The loan agreement will require the MBDC to purchase and maintain insurance protection from the loss of development loan funds due to the dishonest or fraudulent activities of the employees of the MBDC. The insurance must provide coverage of all MBDC employees having access to development loan funds in an amount equal to or greater than the total outstanding indebtedness of the MBDC that has been issued by the department to the MBDC under the authority of the Microbusiness Development Act.

(6) The initial department development loan to a certified MBDC shall not exceed the maximum amount the certified MBDC can reasonably be expected to lend to eligible microbusinesses, in an effective and sound manner, within two years after loan closing. After two years from the closing of the initial development loan, at least 60 percent of the total principal balance of the certified MBDC's development loan shall be loaned out to eligible microbusinesses. The loan out rate shall be calculated as follows: total revolving loan fund microbusiness loan receivables multiplied by .86, divided by the total development loan principal balance outstanding.

(7) On a quarterly basis, all MBDCs shall report, in writing, the total revolving loan fund microbusiness loan receivables and the resulting loan out rate to the department. If the reported loan out rate falls below the 60 percent loan out rate standard for a 12 month period, the MBDC shall return the excess funds to the department, except for any MBDC that has an outstanding development loan principal balance that is less than $250,000. The dollar amount of development loan funds equivalent to the difference between the actual percentage of development loan funds loaned out and the 60 percent loan out rate standard is referred to as "excess funds''. If excess funds are returned by the MBDC to the department, a certified MBDC may apply for additional development loan funds in the future, provided that the certified MBDC meets the requirements established in ARM 8.99.502.

(8) All development loan funds received by a MBDC and all MBDC matching loan funds are assets of the revolving loan fund. For as long as any part of a development loan to a MBDC remains unpaid, the MBDC shall maintain the revolving loan fund. The MBDC may transfer additional assets into the revolving loan fund. The receivables created by making loans to eligible microbusinesses, the MBDC's security interest in collateral pledged by microbusinesses, collections on the receivables, interest, fees, and any other income or assets derived from the operation of the revolving loan fund are assets of the revolving loan fund.

(9) The portion of the revolving loan fund that consists of development loan funds shall only be used for making direct loans by the certified MBDC to microbusinesses or guaranteeing loans made directly by banks to microbusinesses in accordance with the provisions of 17-6-401, MCA, et seq. The portion of the revolving loan fund that consists of MBDC matching loan funds shall only be used for securing the development loan and/or making direct loans by the certified MBDC to microbusinesses or guaranteeing loans made directly by banks to microbusinesses in accordance with the provisions of 17-6-401, MCA, et seq. The portion of the revolving loan fund that includes revolving loan fund income may be used for development loan debt service, reasonable revolving loan fund administrative costs, funded loan loss reserves, or making direct loans by the certified MBDC to microbusinesses or guaranteeing loans made directly by banks to microbusinesses in accordance with the provisions of 17-6-401, MCA, et seq.

(10) The MBDCs shall follow generally accepted accounting principles (GAAP) to identify and record revolving loan fund assets and to prepare, present, and report revolving loan fund financial statements (balance sheet and income statement) as follows:

(a) the MBDC shall maintain a separate accounting ledger for the revolving loan fund; and

(b) each MBDC shall provide the department with a copy of an annual organization wide audit that is prepared by an independent certified public accountant that is licensed by the state of Montana.

(11) All department development loan funds, MBDC matching loan funds, and all proceeds from interest, fees, and any other income earned or derived from the operation of the revolving loan fund shall be deposited in the revolving loan fund bank account. For as long as any part of a development loan to a MBDC remains unpaid, the MBDC shall maintain the revolving loan fund bank account as follows:

(a) the revolving loan fund bank account is a separate demand deposit account in a federally insured bank. All moneys deposited in such bank account shall be money of the revolving loan fund. No other moneys of the MBDC shall be commingled with such money;

(b) all development loan funds, MBDC matching loan funds, and all revolving loan fund income shall be deposited into the revolving loan fund bank account;

(c) the MBDC may transfer additional cash into the revolving loan fund bank account;

(d) loans to eligible microbusinesses are advanced from the revolving loan fund bank account; and

(e) all revolving loan fund expenses are paid from the revolving loan fund bank account.

(12) Department development loan funds, MBDC matching loan funds, and funded loan loss reserve funds may be transferred to the investment bank account from the revolving loan fund bank account. The investment bank account is a separate time deposit account, which pays interest for a fixed term not to exceed one year, in a federally insured bank. All moneys deposited in such bank account shall be money of the revolving loan fund. No other moneys of the MBDC shall be commingled with such money. The investment bank account does not include accounts that are evidenced by a certificated instrument. All interest earnings generated from the investment account shall be deposited in the investment account. All withdrawals or transfers from the investment bank account shall be deposited in or transferred to the revolving loan fund bank account.

(13) Security for all development loans to MBDCs shall be sufficient to ensure repayment of the development loan. The MBDC's operating income, financial condition, and management ability will also be considered. The certified MBDC shall execute a promissory note, development loan agreement, and security agreement with the department. Security for all development loans to MBDCs shall include, but shall not be limited to, a pledge by the MBDC of all assets now in or hereafter placed in the revolving loan fund. The MBDC shall covenant that, in the event the MBDC's financial condition deteriorates or the MBDC takes action detrimental to prudent revolving loan fund operation or fails to take action required of a prudent lender, as determined by the department, the MBDC shall provide additional security, execute any additional documents, and undertake any reasonable acts the department may request to protect the department's interest. In addition to normal security documents, a first lien interest in the MBDC's revolving loan fund bank account and investment bank account shall be accomplished by control agreements satisfactory to the department. The control agreement does not have to require department signature for withdrawals. The depository bank shall waive its offset and recoupment rights against the bank account to the department and subordinate any liens it may have against the MBDC bank account.

(1) MBDC matching loan funds, in the ratio of at least $1 from the MBDC for each $6 of development loan funds provided by the department, must be provided in cash.

(2) The full amount of the MBDC's cash matching funds must be deposited in the revolving loan fund bank account before the development loan proceeds are deposited by the department in revolving loan fund bank account, except that, when the MBDC presents a legally binding commitment for cash matching funds from a federal agency contingent only upon disbursement of the development loan, the development loan may be disbursed prior to deposit of that committed federal portion of the cash matching funds.

(3) In order to assist a MBDC in obtaining cash matching funds from other sources, the department may provide a legally binding commitment to a MBDC to award a development loan, contingent on receipt and deposit of cash matching funds as specified in the loan agreement. Such a commitment will be made first to MBDCs with cash matching funds ready and available and then to MBDCs with strong evidence of commitments. Commitments to those developing cash matching funds must have an expiration date.

(4) All development loan and MBDC matching loan funds not invested in microbusiness loans must be deposited and maintained in the revolving loan fund bank account or the investment bank account at all times.

(5) MBDC matching loan funds must be deposited, invested, and lent together with the development loan proceeds, in the ratio of at least $1 from the MBDC for each $6 of development loan funds provided by the department, and must be used for only those purposes for which the development loan fund proceeds are used, as defined in 17-6-407, MCA.

(6) All development loan proceeds shall be used to establish a revolving loan fund from which loans made directly by the MBDC to microbusinesses and/or loans made directly by banks to qualified microbusinesses are guaranteed. The guarantee agreement between the bank and the MBDC must be approved by the department.

(7) The sum of the outstanding principal balance of the department development loan and the MBDC's matching loan funds is referred to as the "revolving loan fund base". The sum of the revolving loan fund bank account balance and investment bank account balance is referred to as the "revolving loan fund cash balance". The sum of the outstanding principal balance of all performing and delinquent microbusiness loans held by the MBDC in the revolving loan fund is referred to as the "eligible loan receivables balance". Restructured loans will be considered, on a case-by-case basis, in the calculation of the revolving loan fund base. All MBDCs shall report and document the revolving loan fund cash balance and the eligible loan receivables balance. The sum of the revolving loan fund cash balance and the eligible loan receivables balance must equal or exceed the "revolving loan fund base" at all times. If the sum of the revolving loan fund cash balance and the eligible loan receivables balance is less than the revolving loan fund base, this difference is referred to as the "revolving loan fund base deficiency". If a MBDC incurs a "revolving loan fund base deficiency," the MBDC shall deposit additional funds equal to or greater than the "revolving loan fund base deficiency" in the revolving loan fund bank account.

(2) The department may renew the terms of the development loan up to four years or may require the repayment of the loan in full or in part.

(3) The department will consider the criteria for certification of the MBDC and development loan approval, and the MBDC's record of compliance with the development loan agreement, in determining if a development loan is to be renewed and/or repaid in full or in part.

(1) Should the department choose not to renew a development loan, the term of the repayment schedule will be determined by the department taking into consideration the MBDC's outstanding microbusiness loans.

(2) The interest rate for repayment of an existing development loan will be set through negotiation by the department and the MBDC, but in no case will the interest be higher than the current interest rate for development loans as set forth in ARM 8.99.503 above.

(1) Criteria for determining noncompliance and default and provisions for notice and remedy shall be defined in the development loan agreement.

(1) Money in the department's administrative account may be transferred to the development loan account or be used to pay the costs of the program, as per 17-6-407, MCA.

This rule has been repealed.

(1) Microbusiness loan applicants will be required to certify to the MBDCs, that the applicants are eligible borrowers as defined in 17-6-403 and 17-6-407, MCA.

(2) Full-time equivalent employment of the microbusiness loan applicant will be measured for the purpose of determining eligibility on the basis of the payroll period immediately prior to the loan application date.

(3) All microbusiness loans having repayment terms of more than ten years must be approved by the department.

(4) The interest rate charged to microbusiness borrowers by MBDCs shall be, at a minimum, the highest rate charged by the department to the MBDC for development loans and, at a maximum, the rate of interest that does not exceed the greater of 15 percent or an amount that is 6 percentage points per year above the prime rate published by the federal reserve system in its statistical release H.15 Selected Interest Rates for bank prime loans dated three business days prior to the execution of the agreement. MBDCs will report quarterly, in writing to the department, the interest rate(s) charged to borrowers.

(5) A single loan to a microbusiness shall not exceed $100,000 and the outstanding balance of all loans to a microbusiness or a project participated in by more than one microbusiness or to two or more microbusinesses in which any one principal of the microbusiness holds more than a 20 percent equity share shall not exceed $100,000.

(6) Development loan funds may not be used to refinance a delinquent or nonperforming loan or a portion of a delinquent or nonperforming loan held by a bank, financing company, or the MBDC. Any delinquent debt by the microbusiness loan applicant or any of its principals shall cause the applicant to be ineligible to receive a loan from development loan funds. Development loan funds may not be used to satisfy any delinquency.

(7) Eligible uses of the cash proceeds of a microbusiness loan by a microbusiness include:

(a) business and industrial acquisitions;

(b) business construction, conversion, enlargement, repair, modernization, or development;

(c) purchase of equipment, leasehold improvements, machinery, or supplies;

(d) start-up operating costs and working capital; and

(e) consolidation and/or the paying off of a number of performing loans originated and held by banks, of which the microbusiness is the debtor.

This rule has been repealed.

This rule has been repealed.

This rule has been repealed.

This rule has been repealed.

This rule has been repealed.

This rule has been repealed.

This rule has been repealed.

This rule has been repealed.

This rule has been repealed.

This rule has been repealed.

This rule has been repealed.

This rule has been repealed.

This rule has been repealed.

This rule has been repealed.

This rule has been repealed.

This rule has been repealed.

This rule has been repealed.

This rule has been repealed.

This rule has been repealed.

This rule has been repealed.

This rule has been repealed.

This rule has been repealed.

This rule has been repealed.

(1) The department adopts and incorporates by reference the 2019 Biennium Primary Sector Workforce Training Grant Application Guidelines (August 2018), with the guidelines being posted on the Primary Sector Workforce Training Grant web site, as rules governing the submission and review of applications under the program. 

(2) The guidelines incorporated by reference relate to the following:

(a) program inquiries;

(b) program funding;

(c) application deadlines;

(d) eligibility;

(e) program requirements;

(f) penalties;

(g) application procedures;

(h) review of applications; and

(i) procedures for accessing funds.

(3) Copies of the 2019 Biennium Primary Sector Workforce Grant Application Guidelines adopted by reference in (1) may be obtained from the Department of Commerce, Business Resources Division, 301 South Park Avenue, P.O. Box 200501, Helena, Montana 59620-0501, or on the web site at http://marketmt.com/WTG.

This rule has been repealed.

This rule has been repealed.

This rule has been repealed.

This rule has been repealed.

This rule has been repealed.

This rule has been repealed.

This rule has been repealed.

This rule has been repealed.

This rule has been repealed.

This rule has been repealed.

This rule has been repealed.

This rule has been repealed.

This rule has been repealed.

This rule has been repealed.

This rule has been repealed.

This rule has been repealed.

(1) The department adopts and incorporates by reference the Big Sky Economic Development Trust Fund Application Guidelines (June 2019), with the most current guidelines being posted on the Big Sky Economic Development Trust Fund web site, as rules governing the submission and review of applications under the program.  

(2) The guidelines incorporated by reference relate to the following:

(a) program inquiries;

(b) program funding;

(c) application deadlines;

(d) eligibility;

(e) program requirements;

(f) penalties;

(g) application procedures;

(h) review of applications; and

(i) procedures for accessing funds.

(3) Copies of the Application Guidelines and Administration Manual adopted by reference in (1) can be viewed on the department's web site at http://marketmt.com/bstf.

(1) The department has established the following distribution method, for nonadministrative expenses, of the Big Sky Economic Development Trust Funds:

(a) 75% must be allocated for distribution to local governments and tribal governments to be used for job creation projects; and

(b) 25% must be distributed to certified regional development corporations, tribal governments, and eligible economic development organizations for economic development planning activities.

(2) The department has established the following eligible use of Big Sky Economic Development Trust Funds:

(a) Awards to local governments and tribal governments for job creation projects shall include, but are not limited to:

(i) purchase of land, building, or equipment for the direct use of the assisted business;

(ii) lease rate reduction for lease of publicly or privately owned real property for the direct use of the assisted business;

(iii) relocation costs incurred in connection with moving the assisted business's physical assets to Montana;

(iv) wages of employees in net new jobs;

(v) employee training; and

(vi) administration.

(b) Awards to certified regional development corporations, local governments, tribal governments, and other eligible economic development organizations shall include the following economic development planning activities:

(i) support for business improvement districts and central business district redevelopment;

(ii) industrial development;

(iii) feasibility studies;

(iv) creation and maintenance of baseline community profiles;

(v) matching funds for federal funds; and

(vi) administration.

(3) The maximum funding levels for job creation projects are as follows:

(a) Local governments and tribal governments may not exceed $5,000 for each eligible job to be created by an eligible business, except that funding for a project in a high-poverty county may not exceed $7,500 for each eligible job.

(b) The eligible jobs used as the basis for determining the award amount shall be net new jobs to the business associated with the project in Montana and shall not include jobs transferred from any existing Montana operations of the business or any related entity.

(4) Entities must provide matching funds for job creation projects as specified below:

(a) Local governments and tribal governments shall provide equal matching funds for all job creation awards allocated under the program, except that the department may allow a 50% to 100% match requirement for projects located in a high-poverty county.

(b) Certified regional development corporations, local governments, tribal governments, and other eligible economic development organizations may be required to document or provide matching funds for economic development planning awards allocated under the program.

(5) The department may require full or partial repayment of the award, if the assisted business fails to create or maintain the number of net new eligible jobs as specified in the executed contract.

This rule has been repealed.

This rule has been repealed.

This rule has been repealed.

This rule has been repealed.

(1)  The department adopts and incorporates by reference the Program Guidelines for the Montana Growth Fund, a part of the Big Sky Economic Development Program (MGF). 

(2)  The guidelines establish how the department will administer the MGF Program.

(3)  As stated in the guidelines, the department will consider eligible applicants' proposals to obtain MGF funding for economic development projects in the form of:

(a)  low-interest loans;

(b)  forgivable loans; and

(c)  grants (collectively, MGF funding).

(4)  The guidelines state what applicants must submit to the department to be considered for MGF funding.

(5)  The guidelines set matching requirements applicants must meet to obtain MGF funding.

(6)  The guidelines set the factors the department considers when assessing MGF applications, including incentives for rural counties.

(7)  The guidelines identify how successful applicants may use MGF funding.

(8)  Copies of the guidelines may be obtained from the department's Business MT Division, 301 South Park Avenue, P.O. Box 200528, Helena, Montana 59620-0528, or on the department's web site at https://business.mt.gov.

(1)  The department adopts and incorporates by reference Guidelines for the Pilot Community Tourism Grant Program (PCTG Program), with the most current version being posted on the Tourism Grant Program website (guidelines), as rules governing how the department will administer the program.   

(2)  The guidelines address the following:  

(a)  Introduction;  

(b)  Definitions;  

(c)  Eligible Applicants; 

(d)  Eligible Uses of Funds; 

(e)  Ineligible Uses of Funds; 

(f)  Application Process; 

(g)  Application Review Process and Ranking Criteria; and  

(h)  Pilot Community Tourism Grant Program Administration. 

(1)  The department adopts and incorporates by reference Guidelines for the Economic Impact and Destination Event Grant Program (Program or Event Grant Program), with the most current version being posted on the Tourism Grant Program website (Guidelines), as rules governing how the department will administer the Program.

(2)  The Guidelines address the following:  

(a)  Introduction;

(b)  Definitions;

(c)  Eligible Applicants; 

(d)  Eligible Events; 

(e)  Ineligible Events; 

(f)  Eligible Uses of Funds; 

(g)  Ineligible Uses of Funds;

(h)  Application Process;

(i)  Application Review and Ranking Criteria; and

(j)  Program Administration.

(3)  Copies of the Guidelines may be obtained from the department's Destination MT Division, Office of Tourism, 301 South Park Avenue, P.O. Box 200501, Helena, Montana, 59620-0501, or on its web site at https://brand.mt.gov/Programs/Office-Of-Tourism/Tourism-Grant-Program.

(1)  The department adopts and incorporates by reference Guidelines for the Regional Assistance Program (Program or RAP), with the most current version being posted on the Tourism Grant Program website (Guidelines), as rules governing how the department will administer the Program.   

(2)  The Guidelines address the following:  

(a)  Summary;

(b)  Definitions;

(c)  Eligible Applicants; 

(d)  Eligible Projects; 

(e)  Funding Availability; 

(f)  How to Apply; 

(g)  Application Review Process;

(h)  Application Review Criteria;

(i)  Award Process and Contract; and

(j)  Program Contact.