Chapter 10. TITLE 25: COMMONWEALTH DEVELOPMENT AUTHORITY

TITLE 25: COMMONWEALTH DEVELOPMENT AUTHORITY CHAPTER 25-10 DEVELOPMENT CORPORATION DIVISION RULES AND REGULATIONS Part 001 - General Provisions § 25-10-401 Eligibility Policy § 25-10-001 Scope § 25-10-405 Persons § 25-10-005 Powers § 25-10-410 Partnerships and § 25-10-010 Authority Associations § 25-10-015 Amendments § 25-10-415 Corporations § 25-10-020 Effective Date § 25-10-417 Limited Liability § 25-10-025 General Definitions Corporations § 25-10-420 Farmer, Rancher, Part 100 - Board of Directors Fisherman § 25-10-101 Composition of the Board § 25-10-425 Farm and Ranch Loans § 25-10-105 Quorum, Manner of § 25-10-430 Fishing Loans Acting § 25-10-435 Commercial Loans § 25-10-110 Board Leadership § 25-10-440 All Loans Callable § 25-10-115 Chairman § 25-10-445 Percentage of Available § 25-10-120 Vice Chairman Cash, Direct Loan § 25-10-125 Resignation § 25-10-450 Percentage of Available § 25-10-130 Removal Cash, Loan Guaranty § 25-10-135 Meetings of the Board § 25-10-455 Percentage of Available § 25-10-140 Quarterly Meetings Cash, Exceptional Cases § 25-10-145 Special Meetings § 25-10-460 Ancillary Services § 25-10-150 Open and Closed Meetings Part 500 - Creditworthiness and § 25-10-155 Action Without Meeting Restrictions § 25-10-160 Minutes of Meeting § 25-10-501 Determination of § 25-10-165 Compensation Creditworthiness § 25-10-170 Disclosure of Conflict § 25-10-505 Requirements and Criteria § 25-10-175 Contracting Authority § 25-10-510 Restrictions § 25-10-515 Additional Restrictions Part 200 - Duties of the Board § 25-10-201 Oversight Authority Part 600 - Loan Application § 25-10-205 Loan Decisions and Requirements and Review Approval § 25-10-601 Application Review § 25-10-210 Annual Reports § 25-10-605 Application Documents § 25-10-215 Operating Budget § 25-10-610 Application Fee § 25-10-220 Policies § 25-10-615 Incomplete Application § 25-10-620 Loan Approval Part 300 - Officers § 25-10-625 Rejection of Application § 25-10-301 CDA Officers § 25-10-630 Loan Interest Rates § 25-10-305 Delegation of Duties § 25-10-635 Loan Fees § 25-10-640 Loan Closing Service Part 400 - Loan Eligibility and Charge Availability © 2022 by The Commonwealth Law Revision Commission (July 28, 2022) Page 1 of 66

TITLE 25: COMMONWEALTH DEVELOPMENT AUTHORITY § 25-10-645 Posting and Revision of § 25-10-1020 Lapsed Coverage Fees § 25-10-650 Borrower Records Part 1100 - Disbursements § 25-10-655 Renewable Energy § 25-10-1101 Check Signing Authority Preference § 25-10-1105 Disbursement Requirements Part 700 - Construction Loan § 25-10-1110 Retained Proceeds Requirements § 25-10-1115 Incremental § 25-10-701 Construction Disbursements Requirements § 25-10-1120 Purchase of Equipment § 25-10-705 Construction Loan and Materials Disbursement § 25-10-1125 Disbursement Discretion Part 800 - Loan Guaranty and Part 1200 - Professionals Participation § 25-10-1201 Approved Professionals § 25-10-801 Loan Guaranty § 25-10-1205 Pre-qualified List § 25-10-805 One Percent Interest Rate § 25-10-1210 Requirements § 25-10-810 Loan Guaranty Documents Part 1300 - Feasibility Studies and § 25-10-815 Examination of Account Technical Assistance § 25-10-820 Loan Participation § 25-10-1301 Feasibility Studies Program § 25-10-1305 Results and Reports § 25-10-825 Private Projects § 25-10-1310 Technical Assistance Part 900 - Security Part 1400 - Loan Servicing § 25-10-901 Security Policy § 25-10-1401 Tracking System § 25-10-905 First Mortgage on Real § 25-10-1405 Monthly Reports Estate § 25-10-1410 Loan Quality Assurance § 25-10-910 Second Mortgage on Real & Control Estate § 25-10-1415 Failure to Submit Reports § 25-10-915 Third Mortgage on Real § 25-10-1420 Executive Director Estate Meetings and Reports § 25-10-920 Leasehold Mortgage § 25-10-925 Chattel Mortgage and Part 1500 - Loan Repayment Inventories § 25-10-1501 Term of Loan § 25-10-930 Additional Security § 25-10-1505 Advance Payments and § 25-10-935 Appraisals Early Payoff § 25-10-940 Title Insurance § 25-10-1510 No Assumption of Loan § 25-10-1515 Death of Borrower Part 1000 - Insurance § 25-10-1520 Monthly Payments § 25-10-1001 Property & Casualty § 25-10-1525 Past Due Payments Insurance (“P&C”) § 25-10-1530 Late Payment Fees § 25-10-1005 Surety § 25-10-1535 Additional Required § 25-10-1010 Life Insurance Payments § 25-10-1015 P&C, Surety and Life Insurance Companies © 2022 by The Commonwealth Law Revision Commission (July 28, 2022) Page 2 of 66

TITLE 25: COMMONWEALTH DEVELOPMENT AUTHORITY Part 1600 - Loan Revisions and § 25-10-1830 Operation Expenses Refinancing § 25-10-1835 Technical Assistance and § 25-10-1601 Loan Revision Studies § 25-10-1605 Loan Revision Fee § 25-10-1840 Interest Tracking and § 25-10-1610 Waiver of Interest and Booking Late Fees § 25-10-1615 State of Emergency Relief Part 1900 - Investigations and § 25-10-1620 Working With Borrowers Audits § 25-10-1625 Loan Refinancing § 25-10-1901 Investigations and Audits § 25-10-1630 Loan Refinancing Fee § 25-10-1905 Associated Fees for Costs Part 1700 - Loan Collection and Part 2000 - Conflicts and Foreclosure Confidentiality § 25-10-1701 Monitoring § 25-10-2001 Conflicts of Interest § 25-10-1705 Fifteen Day Phone Call § 25-10-2005 Confidentiality § 25-10-1710 DCD Thirty Day Notice § 25-10-2010 Preparation of Loan § 25-10-1715 DCD Sixty Day Notice Applications § 25-10-1720 Demand Letter § 25-10-1725 Notice of Default Part 2100 - Violations of Rules and § 25-10-1730 Other Defaults Regulations § 25-10-1735 Deed in Lieu of § 25-10-2101 Known Violations Foreclosure § 25-10-2105 Discovered Violations § 25-10-1740 Complaint to Foreclose § 25-10-2110 Additional Information § 25-10-1745 Acceleration of Loan § 25-10-2115 Penalties § 25-10-1750 Judgment and Auction § 25-10-1755 Multiple Properties Part 2200 - Board of Directors’ By- § 25-10-1760 Certificate of Sale laws § 25-10-1765 Deed § 25-10-2201 Introduction § 25-10-1770 Controlling Authority § 25-10-2205 Name of Organization § 25-10-1775 Loan Revisions § 25-10-2210 Principal Office § 25-10-1780 Settlement § 25-10-2215 Enabling Legislation § 25-10-1785 Attorneys Fees § 25-10-2220 Composition of the Board § 25-10-1790 Seizure of Chattel & § 25-10-2225 Meetings of the Board Accounts § 25-10-2230 Members of the Board § 25-10-1795 Non-Collectible Debt § 25-10-2235 Officers of the Authority § 25-10-2240 Procedures in Meetings Part 1800 - Funds and Accounting § 25-10-2245 Code of Ethics § 25-10-1801 Accounting Records and § 25-10-2250 Conflicts of Interest Reports § 25-10-2255 Confidentiality § 25-10-1805 Accounting System Agreement § 25-10-1810 Liquid Funds § 25-10-2260 Seal § 25-10-1815 Accounts § 25-10-2265 Adoption and § 25-10-1820 Collections Amendment of By-laws § 25-10-1825 Loan and Investment Amounts Chapter Authority: 4 CMC §§ 10203(a)(2), 10305(b)(1). © 2022 by The Commonwealth Law Revision Commission (July 28, 2022) Page 3 of 66

TITLE 25: COMMONWEALTH DEVELOPMENT AUTHORITY Chapter History: Amdts Adopted 44 Com. Reg. 48673 (July 28, 2022); Amdts Proposed 44 Com. Reg. 48537 (May 28, 2022); Amdts Adopted 44 Com. Reg. 48585 (June 28, 2022); Amdts Proposed 44 Com. Reg. 48406 (Apr. 28, 2022); Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 41 Com. Reg. 42808 (Sept. 28, 2019); Amdts Proposed 41 Com. Reg. 42713 (July 28, 2019); Amdts Adopted 36 Com. Reg. 34698 (Feb. 28, 2014); Amdts Proposed 35 Com. Reg. 34329 (Sept. 28, 2013); Amdts Adopted 36 Com. Reg. 34696 (Feb. 24, 2014); Amdts Proposed 35 Com. Reg. 34318 (Sept. 28, 2013); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002) (superseding all previous rules and regulations); Amdts Adopted 20 Com. Reg. 16272 (Oct. 15, 1998); Amdts Proposed 19 Com. Reg. 15718 (Oct. 15, 1997); Amdts Proposed 17 Com. Reg. 13807 (Nov. 15, 1995);* Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994); Adopted 7 Com. Reg. 3585 (May 21, 1985); Proposed 7 Com. Reg. 3468 (Mar. 15, 1985); Proposed 3 Com. Reg. 1400 (Nov. 30, 1981). *A notice of adoption for the 1995 proposed amendments was never published. Commission Comment: History of the Economic Development Loan Fund: Section 702(c) of the Covenant to Establish a Commonwealth of the Northern Mariana Islands in Political Union with the United States, art. VII § 702(c) (effective March 24, 1976), reprinted in the comment to 48 U.S.C. § 1801, created an Economic Development Loan Fund (EDLF) to receive certain funds provided by the United States government. This fund was a successor to the Trust Territory Economic Development Loan Fund established by Trust Territory Administrative Directive Order 65-2. According to the 1985 “Policies and Regulations for the Economic Development Loan Fund”: The Trust Territory Economic Development Loan Fund (EDLF) was originally created by Administrative Directive 65-2 in 1964, by the High Commissioner of the TTPI in compliance with U.S. Public Law 88-487 and U.S. Public Law 92-257. The Trust Territory EDLF functions and operations were transferred to the Commonwealth through Sections 2, 3 and 13 of the Schedule on Transitional matters of the Commonwealth Constitution, and as further manifested by the TTPI-NMG Memorandum of Understanding No. 2. The organization, functions and procedures of the EDLF, as administered in the Commonwealth, were redefined in the EDLF Policy and Procedure Manual (Rules and Regulations), as approved by the Governor of the Commonwealth, which provides among other things, for the administration of the Fund by an Economic Development Loan Fund Board (hereinafter referred to as the Board of Fund). Grant funds received by the Commonwealth pursuant to Section 702(c) of the Covenant which presently are the principal source of funds, and from the TTPI pursuant to Memorandum of Understanding No. 2, are paid into and administered by the Commonwealth Economic Development Loan Fund. 7 Com. Reg. at 3587 (May 21, 1985). PL 4-49 (effective May 31, 1985), the “Commonwealth Development Authority Act of 1984,” codified as amended at 4 CMC §§ 10101, et seq., vacated Trust Territory Administrative Directive Order 65-2, establishing the Trust Territory Economic Development Loan Fund. See PL 4-49 § 23; see also the comment to 4 CMC § 10101. The act created the Commonwealth Development Authority, empowered the Authority to manage and administer the Economic Development Loan Fund, and transferred all functions powers, duties, funds, contracts, obligations assets and liabilities of the Economic Development Loan Fund existing on May 31, 1985 to the Authority. PL 4-49 §§ 5 and 6, codified as amended at 4 CMC §§ 10201 and 10203; PL 4-49 § 15, codified as amended at 4 CMC § 10407. History of the Commonwealth Development Authority Development Corporation Division Rules and Regulations: © 2022 by The Commonwealth Law Revision Commission (July 28, 2022) Page 4 of 66

TITLE 25: COMMONWEALTH DEVELOPMENT AUTHORITY The Economic Development Loan Fund first published rules and regulations in 1979. On May 21, 1985, the EDLF published notice of adoption of “Policies and Regulations for the Economic Development Loan Fund” that completely revised the previous rules and regulations. The 1994 rules and regulations of the Commonwealth Development Authority also republished and readopted the former EDLF regulatory program in its entirely. Where applicable, the section histories in this chapter date back to the 1985 revision. Prior to the 1985 revision, the history of the EDLF rules and regulations is as follows: Amdts Adopted 2 Com. Reg. 913 (Nov. 17, 1980); Amdts Proposed 2 Com. Reg. 841 (July 9, 1980); Amdts Adopted 2 Com. Reg. 914 (Nov. 17, 1980); Amdts Proposed 2 Com. Reg. 475 (Jan. 16, 1980); Amdts Adopted 1 Com. Reg. 434 (Aug. 16, 1979); Amdts Proposed 1 Com. Reg. 345 (July 16, 1979); Amdts Proposed 1 Com. Reg. 216 (May 16, 1979); Adopted 1 Com. Reg. 134 (Feb. 16, 1979); Proposed 1 Com. Reg. 87 (Jan. 16, 1979). The 2002 “Commonwealth Development Authority Development Corporation Division Rules and Regulations” superceded and replaced all previously issued or amended rules and regulations of the Development Corporation Division. See DCD Rules and Regs. § 1.1, 24 Com. Reg. at 18827 (Jan. 29, 2002), codified at NMIAC § 25-10-001. The 2002 rules and regulations are codified in this chapter. The previous history of each section back to the 1985 rules and regulations is provided in the section comments where applicable. The 2005 “Commonwealth Development Authority Development Corporation Division Rules and Regulations” superceded and replaced all previously issued or amended rules and regulations of the Development Corporation Division. See DCD Rules and Regs. § 1.1, 27 Com. Reg. at 24745 (Aug. 22, 2005), codified at NMIAC § 25-10-001. The 2005 rules and regulations are codified in this chapter. The previous history of each section back to the 1985 rules and regulations is provided in the section comments where applicable. Part 001 - General Provisions § 25-10-001 Scope These rules and regulations [this chapter] govern the administration of the Development Corporation Division (“DCD”) of the Commonwealth Development Authority (“CDA”), subject to any limitations set forth in the CDA Act (i.e. 4 CMC §§ 10101, et seq.). These rules and regulations [this chapter] apply to all the activities in which DCD is engaged and supersede and replace any and all previously issued or amended rules and regulations of DCD. Modified, 1 CMC § 3806(d). History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002). § 25-10-005 Powers As a mandated division of CDA, DCD is hereby invested with those powers reasonably necessary and incidental to the fulfillment of its purposes, which purposes are as outlined in 4 CMC § 10102(b). The powers of DCD include, but are not limited to, those powers set forth in 4 CMC § 10203 and are subject only to any limitations set forth in the CDA Act. © 2022 by The Commonwealth Law Revision Commission (July 28, 2022) Page 5 of 66

TITLE 25: COMMONWEALTH DEVELOPMENT AUTHORITY History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002). § 25-10-010 Authority These Rules and Regulations [this chapter] are prescribed by virtue of the authority given CDA under 4 CMC § 10203(a)(2) and (a)(30); and are duly published and adopted in accordance with those procedures set forth in the Administrative Procedure Act (1 CMC §§ 9101, et seq.). Modified, 1 CMC § 3806(d). History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002). § 25-10-015 Amendments These Rules and Regulations [this chapter] may be amended from time to time upon recommendation of the Board of Directors and adoption by the CDA Board. Modified, 1 CMC § 3806(d). History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994); Adopted 7 Com. Reg. 3585 (May 21, 1985) (superseding all previous regulations); Proposed 7 Com. Reg. 3468 (Mar. 15, 1985); Proposed 3 Com. Reg. 1400 (Nov. 30, 1981). § 25-10-020 Effective Date The effective date of these Rules and Regulations [this chapter] shall be as set forth in 1 CMC § 9105(b). Modified, 1 CMC § 3806(d). History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002). § 25-10-025 General Definitions Unless the context otherwise requires, in these Rules and Regulations [this chapter]: © 2022 by The Commonwealth Law Revision Commission (July 28, 2022) Page 6 of 66

TITLE 25: COMMONWEALTH DEVELOPMENT AUTHORITY (a) “Agriculture.” “Agriculture” means the science, art, and business of cultivating the soil producing crops and raising livestock. (b) “Aquiculture.” “Aquiculture” means freshwater farming or hydroponics, the cultivation of plants and the production of crops in water rather than in soil. (c) “Board of Directors.” “Board of Directors” means the board of directors of DCD. (d) “Chairman.” “Chairman” means the chairman of the Board of Directors. (e) “Commonwealth.” “Commonwealth” means the Commonwealth of the Northern Mariana Islands. (f) “EDLF.” “EDLF” means the Economic Development Loan Fund. (g) “Executive Director.” “Executive Director” means the Executive Director of CDA. (h) “Farmer.” “Farmer” means a farm operator, owner or worker who cultivates or produces a crop in water or soil as an Occupation. (i) “Fisherman.” “Fisherman” means one who fishes as an Occupation. (j) “Governor.” “Governor” means the Governor of the Commonwealth. (k) “Loan.” “Loan” means the delivery by DCD to, and the receipt by a Loan Applicant of, a sum of money upon agreement by that Loan Applicant to repay it to DCD with interest. (l) “Loan Applicant.” “Loan Applicant” means a person, partnership, association, or corporation seeking a loan or guaranty from CDA. (m) “Loan Guaranty.” “Loan Guaranty” means a promise by DCD to answer for repayment of a debt or performance of an obligation of an Applicant, if that Applicant is primarily liable to a financial institution other than CDA and fails to make payment or perform the obligation. (n) “Mariculture.” “Mariculture” means seawater farming or the cultivation of marine organisms and crops in their natural habitat. (o) “Occupation.” “Occupation” means the principal or regular employment or activity in which one engages. (p) “Public Auditor.” “Public Auditor” means the Public Auditor of the Commonwealth. © 2022 by The Commonwealth Law Revision Commission (July 28, 2022) Page 7 of 66

TITLE 25: COMMONWEALTH DEVELOPMENT AUTHORITY (q) “Rancher.” “Rancher” means an owner or manager of a ranch who raises livestock as an Occupation. (r) “Renewable Energy.” “Renewable Energy” means any energy resource that is naturally regenerated over a short time scale and derived directly from the sun (such as thermal, photochemical and photoelectric), indirectly from the sun (such as wind, hydropower, and photosynthetic energy stored in biomass), or from other natural movements and mechanisms of the environment (such as geothermal and tidal energy). Renewable energy does not include energy resources derived from fossil fuels, waste products from fossil sources, or waste products from inorganic sources. Modified, 1 CMC § 3806(d). History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 36 Com. Reg. 34696 (Feb. 24, 2014); Amdts Proposed 35 Com. Reg. 34318 (Sept. 28, 2013); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994); Adopted 7 Com. Reg. 3585 (May 21, 1985) (superseding all previous regulations); Proposed 7 Com. Reg. 3468 (Mar. 15, 1985); Proposed 3 Com. Reg. 1400 (Nov. 30, 1981). Commission Comment: [Historical comments removed.] Part 100 - Board of Directors Commission Comment: The Board of Directors’ By-laws, adopted at 36 Com. Reg. 34698 (Feb. 28, 2014), contains regulations that may conflict with portions of this part. § 25-10-101 Composition of the Board The affairs of DCD shall be governed and controlled by the Board of Directors, which shall be composed of the seven (7) members of the CDA Board of Directors; members of the Board of Directors shall serve until their terms of office with the CDA Board expire. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994); Adopted 7 Com. Reg. 3585 (May 21, 1985); Proposed 7 Com. Reg. 3468 (Mar. 15, 1985); Proposed 3 Com. Reg. 1400 (Nov. 30, 1981). § 25-10-105 Quorum, Manner of Acting Five (5) members of the Board of Directors shall constitute a quorum for the transaction of business at any meeting of the Board of Directors. The act of the majority of the members present at a meeting at which a quorum is present shall be the act of the Board of Directors. A member who is unable to attend a particular meeting may authorize in writing another member in attendance to cast the absent member’s vote upon any item of business properly © 2022 by The Commonwealth Law Revision Commission (July 28, 2022) Page 8 of 66

TITLE 25: COMMONWEALTH DEVELOPMENT AUTHORITY noticed. This proxy representation may not be used for more than three consecutive meetings and may not be used to establish a quorum. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994); Adopted 7 Com. Reg. 3585 (May 21, 1985); Proposed 7 Com. Reg. 3468 (Mar. 15, 1985); Proposed 3 Com. Reg. 1400 (Nov. 30, 1981). § 25-10-110 Board Leadership At the first meeting of each year, the Board of Directors shall elect a Chairman and Vice Chairman from amongst their members as the first item of business at that meeting. A member elected shall serve a one (1) year term or until his or her term as a member of the Board of Directors ends, whichever is less. A member may be elected for successive terms. Any vacancies in leadership created by resignation, removal or death shall be filled by election at the next regular or special meeting called for that purpose. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994); Adopted 7 Com. Reg. 3585 (May 21, 1985); Proposed 7 Com. Reg. 3468 (Mar. 15, 1985); Proposed 3 Com. Reg. 1400 (Nov. 30, 1981). § 25-10-115 Chairman The Chairman shall preside over the meetings of the Board of Directors. He or she shall also have such powers and shall perform such duties as may from time to time be specified in resolutions or other directives of the Board of Directors. In the absence of such specifications, he or she shall have the necessary powers and authority and shall perform and discharge the duties normally associated with chairmen of similar public corporations. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002). § 25-10-120 Vice Chairman The Vice Chairman shall assume the duties and responsibilities of the Chairman in his or her absence; and shall also have such powers and shall perform such duties as may from time to time be specified in resolutions or other directives of the Board of Directors. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002). © 2022 by The Commonwealth Law Revision Commission (July 28, 2022) Page 9 of 66

TITLE 25: COMMONWEALTH DEVELOPMENT AUTHORITY § 25-10-125 Resignation A member may resign at any time by delivering written notice of his or her resignation to the Chairman of the Board of Directors. Written notice must also be provided the Governor if he or she is also resigning from the CDA Board. The acceptance of such resignation shall not be necessary to make it effective and shall take effect at the time specified therein. Upon resignation, the member shall cease to sit on the Board of Directors and shall not be included in any quorum count. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994); Adopted 7 Com. Reg. 3585 (May 21, 1985); Proposed 7 Com. Reg. 3468 (Mar. 15, 1985); Proposed 3 Com. Reg. 1400 (Nov. 30, 1981). § 25-10-130 Removal A member may only be removed before the expiration of his or her term by the Governor and on grounds of gross neglect or dereliction of duty, breach of fiduciary duty, conviction of a felony or mental or physical incapacity. Upon removal, the member shall cease to sit on the Board of Directors and shall not be included in any quorum count. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994); Adopted 7 Com. Reg. 3585 (May 21, 1985); Proposed 7 Com. Reg. 3468 (Mar. 15, 1985); Proposed 3 Com. Reg. 1400 (Nov. 30, 1981). § 25-10-135 Meetings of the Board All meetings of the Board shall be held in the Commonwealth and pursuant to Public Law 8-41; “the Open Government Act of 1992”, as amended. Members of the Board of Directors who are in the Commonwealth but unable to attend a meeting in person may appear by means of internet or online video conferencing, teleconferencing, or other electronic means of communication. (a) Members attending a meeting via internet or online video conferencing, teleconferencing, or other electronic means of communication must make sure that they are in a secure location when where public is not present unless declaration is made or requested, on record, to participate (b) Members who appear by means of internet or online video conferencing, teleconferencing, or other electronic means of communication shall be considered present for the purposes of a quorum. (c) Notice of Intent to Attend Remotely. Members who plan to attend a meeting of the Board of Directors by means of internet or online video conferencing, teleconferencing, or © 2022 by The Commonwealth Law Revision Commission (July 28, 2022) Page 10 of 66

TITLE 25: COMMONWEALTH DEVELOPMENT AUTHORITY other electronic means of communication shall inform the Chairman of the Board and the Executive Assistant at least three (3) days prior to the meeting. History: Adopted 44 Com. Reg. 48673 (July 28, 2022); Proposed 44 Com. Reg. 48537 (May 28, 2022). § 25-10-140 Quarterly Meetings The Board of Directors shall meet at least once each quarter at a time and place designated by the Chairman. An agenda for and notice of the meeting shall be delivered to each member at least fourteen (14) days prior to the meeting. History: Adopted 44 Com. Reg. 48673 (July 28, 2022); Proposed 44 Com. Reg. 48537 (May 28, 2022); Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Proposed 42 Com. Reg. 43649 (June 28, 2020); Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994); Adopted 7 Com. Reg. 3585 (May 21, 1985); Proposed 7 Com. Reg. 3468 (Mar. 15, 1985); Proposed 3 Com. Reg. 1400 (Nov. 30, 1981). § 25-10-145 Special Meetings The Chairman may convene other or special meetings of the Board of Directors on forty- eight (48) hours written notice to each member, which notice shall include the proposed agenda and the time and place for the meeting. History: Adopted 44 Com. Reg. 48673 (July 28, 2022); Proposed 44 Com. Reg. 48537 (May 28, 2022); Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Proposed 42 Com. Reg. 43649 (June 28, 2020); Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002). § 25-10-150 Open and Closed Meetings All meetings of the Board of Directors shall be open to the public during discussion of policies, procedures, and administrative and other non-confidential matters; and shall be closed to the public during discussion of personnel, financial, credit confidences, or any other privileged information related to or concerning Loan Applicants, projects and other matters of a confidential nature. History: Adopted 44 Com. Reg. 48673 (July 28, 2022); Proposed 44 Com. Reg. 48537 (May 28, 2022); Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Proposed 42 Com. Reg. 43649 (June 28, 2020); Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994); Adopted 7 Com. Reg. 3585 (May 21, 1985); Proposed 7 Com. Reg. 3468 (Mar. 15, 1985); Proposed 3 Com. Reg. 1400 (Nov. 30, 1981). § 25-10-155 Action Without Meeting © 2022 by The Commonwealth Law Revision Commission (July 28, 2022) Page 11 of 66

TITLE 25: COMMONWEALTH DEVELOPMENT AUTHORITY For urgent or in emergency situations, any action required or permitted to be taken at a meeting may be taken without a meeting if a consent in writing, setting forth the action so taken, is signed and approved by at least five (5) members. Such consent shall have the same force and effect as shall be as binding as if the same had been acted upon or consented to at a meeting of the Board of Directors duly convened and held. History: Adopted 44 Com. Reg. 48673 (July 28, 2022); Proposed 44 Com. Reg. 48537 (May 28, 2022); Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Proposed 42 Com. Reg. 43649 (June 28, 2020); Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994); Adopted 7 Com. Reg. 3585 (May 21, 1985); Proposed 7 Com. Reg. 3468 (Mar. 15, 1985); Proposed 3 Com. Reg. 1400 (Nov. 30, 1981). § 25-10-160 Minutes of Meeting The Board of Directors shall cause to be kept written minutes of the proceedings of each of its meetings. The Board of Directors shall designate a secretary to keep its minutes and records who may or may not be a member of the Board of Directors. History: Adopted 44 Com. Reg. 48673 (July 28, 2022); Proposed 44 Com. Reg. 48537 (May 28, 2022); Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Proposed 42 Com. Reg. 43649 (June 28, 2020); Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994); Adopted 7 Com. Reg. 3585 (May 21, 1985); Proposed 7 Com. Reg. 3468 (Mar. 15, 1985); Proposed 3 Com. Reg. 1400 (Nov. 30, 1981). § 25-10-165 Compensation The members of the Board of Directors shall be compensated pursuant to 1 CMC § 8247 and may be reimbursed in accordance with the Commonwealth law for any reasonable and necessary expenses incurred in the performance of their duties. History: Adopted 44 Com. Reg. 48673 (July 28, 2022); Proposed 44 Com. Reg. 48537 (May 28, 2022); Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Proposed 42 Com. Reg. 43649 (June 28, 2020); Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994); Adopted 7 Com. Reg. 3585 (May 21, 1985); Proposed 7 Com. Reg. 3468 (Mar. 15, 1985); Proposed 3 Com. Reg. 1400 (Nov. 30, 1981). § 25-10-170 Disclosure of Conflict Any member who is directly or indirectly interested in any arrangement, transaction or business matter entered into, proposed or under consideration by the Board of Directors shall, as soon as possible after the relevant facts have come to his or her attention, disclose the nature of the interest to the Board of Directors. Any disclosure shall be recorded in the minutes of the meeting and, except as otherwise provided by a resolution, the conflicted member shall not take part after the disclosure in any deliberation or decision relating © 2022 by The Commonwealth Law Revision Commission (July 28, 2022) Page 12 of 66

TITLE 25: COMMONWEALTH DEVELOPMENT AUTHORITY thereto, but may be counted as present for the purpose of forming a quorum for any such deliberation or decision. A willful failure to disclose a conflict of interest shall be a breach of duty and cause for immediate removal of the member from the Board of Directors. History: Adopted 44 Com. Reg. 48673 (July 28, 2022); Proposed 44 Com. Reg. 48537 (May 28, 2022); Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Proposed 42 Com. Reg. 43649 (June 28, 2020); Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994); Adopted 7 Com. Reg. 3585 (May 21, 1985); Proposed 7 Com. Reg. 3468 (Mar. 15, 1985); Proposed 3 Com. Reg. 1400 (Nov. 30, 1981). § 25-10-175 Contracting Authority The Executive Director and the Chairman, or the Vice Chairman if the Chairman is absent, shall have the contracting authority for all matters pertaining to the operations of DCD, including, but not limited to, the execution of loan documents, guarantees and other necessary agreements, contracts and checks. In the absence of the Chairman and Vice Chairman, the Chairman or Vice Chairman of the CDA Board of Directors is authorized to act in his or her stead. At all times, the contracting officers shall comply with applicable procurement regulations. History: Adopted 44 Com. Reg. 48673 (July 28, 2022); Proposed 44 Com. Reg. 48537 (May 28, 2022); Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Proposed 42 Com. Reg. 43649 (June 28, 2020); Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994); Adopted 7 Com. Reg. 3585 (May 21, 1985); Proposed 7 Com. Reg. 3468 (Mar. 15, 1985); Proposed 3 Com. Reg. 1400 (Nov. 30, 1981). Part 200 - Duties of the Board § 25-10-201 Oversight Authority The Board of Directors shall oversee the administration of all Loans and other fund allocations to ensure that there is compliance with all Loan agreement provisions and fulfillment of the statutory purposes of DCD and those duties set forth in these Rules and Regulations [this chapter]. Modified, 1 CMC § 3806(d). History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994). § 25-10-205 Loan Decisions and Approval © 2022 by The Commonwealth Law Revision Commission (July 28, 2022) Page 13 of 66

TITLE 25: COMMONWEALTH DEVELOPMENT AUTHORITY Pursuant to 4 CMC § 10306(a)(4) and delegation by the CDA Board, the Executive Director may review, reject, approve and make all decisions concerning Loan or Loan Guaranty applications of up to $25, 000 p er L o an A ppl i c an t . A re p or t o f a ll L o an sso han d l e d s ha ll b e in c l u d e d b y t h e E x ec u t i v eD i rec t or inhi sor h er q u a r t er l yre p or t s t o t h e B o a r d o f D i rec t ors . S ee §25 - 10 - 1410. A ll L o an or L o an G u a r an t y a ppl i c a t i o n so f m ore t han$ 25,000 per Loan Applicant shall be reviewed by the Executive Director and then shall be submitted to the Board of Directors for all necessary approvals, disapproval or decisions relating thereto. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Amdts Adopted 20 Com. Reg. 16272 (Oct. 15, 1998); Amdts Proposed 19 Com. Reg. 15718 (Oct. 15, 1997); Amdts Proposed 17 Com. Reg. 13807 (Nov. 15, 1995); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994); Adopted 7 Com. Reg. 3585 (May 21, 1985); Proposed 7 Com. Reg. 3468 (Mar. 15, 1985); Proposed 3 Com. Reg. 1400 (Nov. 30, 1981). § 25-10-210 Annual Reports The Board of Directors shall prepare a report of its activities at the end of each fiscal year and shall submit the same to the CDA Board of Directors for incorporation into the CDA Annual Report to be forwarded to the Governor and Legislature. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994); Adopted 7 Com. Reg. 3585 (May 21, 1985); Proposed 7 Com. Reg. 3468 (Mar. 15, 1985); Proposed 3 Com. Reg. 1400 (Nov. 30, 1981). § 25-10-215 Operating Budget The Board of Directors shall prepare an annual operating budget for DCD and shall submit such budget for approval by the CDA Board of Directors. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994); Adopted 7 Com. Reg. 3585 (May 21, 1985); Proposed 7 Com. Reg. 3468 (Mar. 15, 1985); Proposed 3 Com. Reg. 1400 (Nov. 30, 1981). § 25-10-220 Policies As it deems it necessary, the Board of Directors may by resolution make policies regarding all DCD matters including, but not limited to, matters discussed in these Rules and Regulations [this chapter], Loan applications, documents, forms, fees and administration, the form and manner of accepting and making payments; and the manner in which specific documents and notices are served and received by DCD. © 2022 by The Commonwealth Law Revision Commission (July 28, 2022) Page 14 of 66

TITLE 25: COMMONWEALTH DEVELOPMENT AUTHORITY Modified, 1 CMC § 3806(d). History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002). Part 300 - Officers Commission Comment: The Board of Directors’ By-laws, adopted at 36 Com. Reg. 34698 (Feb. 28, 2014), contains regulations that may conflict with portions of this part. § 25-10-301 CDA Officers The Executive Director and Comptroller of CDA shall also serve as the officers of DCD and shall exercise those duties and powers given to them under 4 CMC § 10306 for the benefit of DCD. The Executive Director shall be the officer primarily responsible to oversee, monitor and administer the DCD loans, subject to consultation with the Loan Manager and the DCD Board as directed by these regulations [this chapter] and in accordance with established policy and procedure. Modified, 1 CMC § 3806(d). History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Amdts Adopted 20 Com. Reg. 16272 (Oct. 15, 1998); Amdts Proposed 19 Com. Reg. 15718 (Oct. 15, 1997); Amdts Proposed 17 Com. Reg. 13807 (Nov. 15, 1995); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994); Adopted 7 Com. Reg. 3585 (May 21, 1985); Proposed 7 Com. Reg. 3468 (Mar. 15, 1985); Proposed 3 Com. Reg. 1400 (Nov. 30, 1981). § 25-10-305 Delegation of Duties The Board of Directors may from time to time delegate to an officer or its officers any of its power or authority given under these Rules and Regulations [this chapter]. Any officer to whom any powers or authority is so delegated may exercise the same in the same manner and with the same effect as if they had been conferred on him or her directly by these Rules and Regulations [this chapter]. Modified, 1 CMC § 3806(d). History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994); Adopted 7 Com. Reg. 3585 (May 21, 1985); Proposed 7 Com. Reg. 3468 (Mar. 15, 1985); Proposed 3 Com. Reg. 1400 (Nov. 30, 1981). Part 400 - Loan Eligibility and Availability © 2022 by The Commonwealth Law Revision Commission (July 28, 2022) Page 15 of 66

TITLE 25: COMMONWEALTH DEVELOPMENT AUTHORITY § 25-10-401 Eligibility Policy It is the policy of DCD that it shall not compete with any private banks or other financial institutions in the funding of private economic projects. Borrowers are encouraged to avail of financial assistance from established banks and other financial institutions before submitting a Loan application to DCD. Modified, 1 CMC § 3806(g). History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994). § 25-10-405 Persons Eligible Loan Applicants who are persons must be United States citizens or nationals and must have been domiciled in the Commonwealth for at least two (2) continuous years immediately preceding the submission of their Loan application. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994); Adopted 7 Com. Reg. 3585 (May 21, 1985); Proposed 7 Com. Reg. 3468 (Mar. 15, 1985); Proposed 3 Com. Reg. 1400 (Nov. 30, 1981). § 25-10-410 Partnerships and Associations Eligible Loan Applicants who are partnerships or associations must be wholly owned by United States citizens or nationals who have been domiciled in the Commonwealth for at least two (2) continuous years immediately preceding the submission of the Loan application. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994); Adopted 7 Com. Reg. 3585 (May 21, 1985); Proposed 7 Com. Reg. 3468 (Mar. 15, 1985); Proposed 3 Com. Reg. 1400 (Nov. 30, 1981). § 25-10-415 Corporations Eligible Loan Applicants who are corporations: must be organized under the laws of the Commonwealth and at least fifty-one percent (51%) of their capital stock issued, outstanding and entitled to vote must be owned and held by United States citizens or nationals who have been domiciled in the Commonwealth for at least two (2) continuous years immediately preceding the submission of the Loan application; and must distribute © 2022 by The Commonwealth Law Revision Commission (July 28, 2022) Page 16 of 66

TITLE 25: COMMONWEALTH DEVELOPMENT AUTHORITY profits to its stockholders in direct proportion to the number of shares held by each stockholder. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994); Adopted 7 Com. Reg. 3585 (May 21, 1985); Proposed 7 Com. Reg. 3468 (Mar. 15, 1985); Proposed 3 Com. Reg. 1400 (Nov. 30, 1981). § 25-10-417 Limited Liability Companies Eligible Loan Applicants who are limited liability companies (LLCs) must be wholly owned by United States citizens or nationals who have been domiciled in the Commonwealth for at least two (2) continuous years immediately preceding the submission of the loan application. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Adopted 36 Com. Reg. 34696 (Feb. 24, 2014); Proposed 35 Com. Reg. 34318 (Sept. 28, 2013). Commission Comment: [Historical comments removed.] § 25-10-420 Farmer, Rancher, Fisherman Eligible Loan Applicants who are Farmers, Ranchers or Fishermen must be, by definition and Occupation, Farmers, Ranchers or Fishermen. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Amdts Adopted 20 Com. Reg. 16272 (Oct. 15, 1998); Amdts Proposed 19 Com. Reg. 15718 (Oct. 15, 1997); Amdts Proposed 17 Com. Reg. 13807 (Nov. 15, 1995); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994). Commission Comment: [Historical comments removed.] § 25-10-425 Farm and Ranch Loans A Farm or Ranch Loan is a Loan that uses funds reserved for farmers, fishermen, agricultural and marine cooperatives in Covenant § 702(c), and that is made for the purpose of: purchasing farm and ranch equipment such as tractors, plows and other attachments for tractors, tillers, hand tools, related shop tools, repair parts, seeds, plants, fertilizers, farm chemicals, planters, livestock and poultry or specialized equipment and fixtures designed solely for the raising of crops, livestock, poultry or egg production, building shelters for farm machinery, livestock or poultry; or providing reasonable, one-time, start-up operating funds. The foregoing is not to be interpreted as an all comprehensive list and is subject to expansion by the Board of Directors. A Farm or Ranch Loan may or may not be made for the purpose of mariculture or aquiculture activities. Over the road vehicles such as trucks and pick-ups may be included in a Farm or Ranch Loan; however, such vehicles must be © 2022 by The Commonwealth Law Revision Commission (July 28, 2022) Page 17 of 66

TITLE 25: COMMONWEALTH DEVELOPMENT AUTHORITY used at least sixty percent (60%) of the time (in hours) for actual farming and ranching activities. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Amdts Adopted 20 Com. Reg. 16272 (Oct. 15, 1998); Amdts Proposed 19 Com. Reg. 15718 (Oct. 15, 1997); Amdts Proposed 17 Com. Reg. 13807 (Nov. 15, 1995); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994). § 25-10-430 Fishing Loans A Fishing Loan is a Loan that uses funds reserved for farmers, fishermen, agricultural and marine cooperatives in Covenant § 702(c), and that is made for the purpose of: purchasing boats, boat trailers, ships, fishing gear, safety equipment, ship-to-shore radios, cooler boxes and other directly related fishing equipment, or providing reasonable, one-time, start-up operating funds. Fishing loans are limited to commercial fishing ventures, sport fishing does not qualify. Over the road vehicles such as trucks and pickups may be included in a Fishing Loan; however, such vehicles must be used at least sixty percent (60%) of the time (in hours) for actual fishing activities, such as the launching or dry storage of fishing boats. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Amdts Adopted 20 Com. Reg. 16272 (Oct. 15, 1998); Amdts Proposed 19 Com. Reg. 15718 (Oct. 15, 1997); Amdts Proposed 17 Com. Reg. 13807 (Nov. 15, 1995); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994). § 25-10-435 Commercial Loans All Loans that are not considered Farm, Ranch or Fishing Loans are considered Commercial Loans. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994). § 25-10-440 All Loans Callable The repayment terms for all Loans shall not be more than thirty (30) years and shall be callable every five (5) years, but the repayment terms must be fully amortized over the total period given. Upon the 1st five years maturity and for term continuance on the remainder of the given period, the Loan Manager and the Executive Director must determine that there is sufficient cash flow for debt service requirement and that the Loan is not subject to any adverse financial condition before allowing said Loan to continue until again callable five (5) years hence. © 2022 by The Commonwealth Law Revision Commission (July 28, 2022) Page 18 of 66

TITLE 25: COMMONWEALTH DEVELOPMENT AUTHORITY History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005). § 25-10-445 Percentage of Available Cash, Direct Loan DCD shall not make any direct Loan if, at the time for approval, such Loan would exceed twenty-five percent (25%) of the total uncommitted cash then available to Loan Applicants under the particular category of Loans for which the Loan Applicant applied. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Amdts Adopted 20 Com. Reg. 16272 (Oct. 15, 1998); Amdts Proposed 19 Com. Reg. 15718 (Oct. 15, 1997); Amdts Proposed 17 Com. Reg. 13807 (Nov. 15, 1995); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994); Adopted 7 Com. Reg. 3585 (May 21, 1985); Proposed 7 Com. Reg. 3468 (Mar. 15, 1985); Proposed 3 Com. Reg. 1400 (Nov. 30, 1981). § 25-10-450 Percentage of Available Cash, Loan Guaranty DCD shall not guarantee any bank loan or participate in any Loan Guaranty if, at the time for approval, such Loan Guaranty would exceed twenty-five percent (25%) of total uncommitted cash then available to Loan Applicants under the particular category of Loans for which the Loan Applicant applied. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Amdts Adopted 20 Com. Reg. 16272 (Oct. 15, 1998); Amdts Proposed 19 Com. Reg. 15718 (Oct. 15, 1997); Amdts Proposed 17 Com. Reg. 13807 (Nov. 15, 1995); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994); Adopted 7 Com. Reg. 3585 (May 21, 1985); Proposed 7 Com. Reg. 3468 (Mar. 15, 1985); Proposed 3 Com. Reg. 1400 (Nov. 30, 1981). § 25-10-455 Percentage of Available Cash, Exceptional Cases In exceptional cases meriting special consideration, the limits set forth in §§ 25-10-445 and 25-10-450 may be exceeded provided the Loan or Loan Guaranty is of high economic benefit to the Commonwealth (as determined by a statement on economic priorities issued by CDA) and the Loan is fully and sufficiently secured. In such exceptional cases, DCD may enter into a syndicated financial arrangement in an effort to limit the exposure of DCD to only twenty-five percent (25%) of its then uncommitted cash. Modified, 1 CMC § 3806(c). History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Amdts Adopted 20 Com. Reg. 16272 (Oct. 15, 1998); Amdts Proposed 19 Com. Reg. 15718 (Oct. 15, 1997); Amdts Proposed 17 Com. Reg. 13807 (Nov. 15, © 2022 by The Commonwealth Law Revision Commission (July 28, 2022) Page 19 of 66

TITLE 25: COMMONWEALTH DEVELOPMENT AUTHORITY 1995); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994); Adopted 7 Com. Reg. 3585 (May 21, 1985); Proposed 7 Com. Reg. 3468 (Mar. 15, 1985); Proposed 3 Com. Reg. 1400 (Nov. 30, 1981). § 25-10-460 Ancillary Services DCD may provide ancillary services to a borrower, in connection with a Loan or other financing activities by DCD, when it would not be practical for such services to be provided by another financing institution. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994). Part 500 - Creditworthiness and Restrictions § 25-10-501 Determination of Creditworthiness In all cases, the Board of Directors shall be responsible for determining the creditworthiness of each Loan Applicant. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002). § 25-10-505 Requirements and Criteria In making its determination, the Board of Directors must evaluate the Loan application based on the following general credit requirements and credit underwriting criteria: (a) The Loan Applicant must be of good financial and moral character; (b) Evidence pertaining to the credit worthiness of the Loan Applicant obtained under the Fair Credit Reporting Act (15 U.S.C. § 1681) or other applicable laws; (c) The Loan Applicant must demonstrate an ability to operate a successful business; (d) The Loan Applicant may be required to provide DCD with evidence of a reasonable investment of equity in cash or in-kind of not less than twenty percent (20%) of the total project cost to ensure that the Loan Applicant has an appropriate stake in the venture; (e) The Loan Applicant must show that the proposed loan is of sound business and economic potential to the respective community in which it will operate; and © 2022 by The Commonwealth Law Revision Commission (July 28, 2022) Page 20 of 66

TITLE 25: COMMONWEALTH DEVELOPMENT AUTHORITY (f) The Loan Applicant must show that the past earning, if any, and future prospects and potential earnings of the business or project indicates the ability to repay the Loan and other fixed debt, if any, out of earnings. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994); Adopted 7 Com. Reg. 3585 (May 21, 1985); Proposed 7 Com. Reg. 3468 (Mar. 15, 1985); Proposed 3 Com. Reg. 1400 (Nov. 30, 1981). § 25-10-510 Restrictions No Loan Applicant shall be qualified or granted a Loan if: (a) The Loan Applicant was a controlling shareholder or a manager of an association or a corporation that, at any time during the three (3) years immediately preceding the filing of the Loan application and during the period of control or management by the Loan Applicant, had been adjudicated bankrupt, filed for bankruptcy or been placed under receivership; (b) The Loan Applicant is in default of any debt, loan or any financial obligation at the time of filing the Loan Application or if the Loan Applicant has a record of defaulting on previous loans or other credit extensions without justification; (c) Within three (3) years of the date of the Loan application, any property of the Loan Applicant was actually foreclosed upon, or taken and sold at foreclosure sale to satisfy any debt owed to a creditor by the Loan Applicant; (d) The Loan proceeds are to be used for a hobby, personal entertainment or personal pleasure; or (e) The Loan is not fully secured by sufficient securities or collateral. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Amdts Adopted 20 Com. Reg. 16272 (Oct. 15, 1998); Amdts Proposed 19 Com. Reg. 15718 (Oct. 15, 1997); Amdts Proposed 17 Com. Reg. 13807 (Nov. 15, 1995); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994); Adopted 7 Com. Reg. 3585 (May 21, 1985); Proposed 7 Com. Reg. 3468 (Mar. 15, 1985); Proposed 3 Com. Reg. 1400 (Nov. 30, 1981). Commission Comment: [Historical comments removed.] § 25-10-515 Additional Restrictions In addition to the above restrictions, the Board of Directors shall not make or approve a Loan or Loan Guaranty: © 2022 by The Commonwealth Law Revision Commission (July 28, 2022) Page 21 of 66

TITLE 25: COMMONWEALTH DEVELOPMENT AUTHORITY (a) If funds are otherwise available on reasonable terms from other sources, including but not limited to personal resources, commercial banks, savings and loan associations and credit unions. (b) If Loan proceeds are to be used for illegal and/or immoral activities; (c) For the purpose of refinancing a debt not connected with the Loan; (d) For the purpose of providing short term financing, except as necessary in connection with medium or long-term assistance by DCD. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994); Adopted 7 Com. Reg. 3585 (May 21, 1985); Proposed 7 Com. Reg. 3468 (Mar. 15, 1985); Proposed 3 Com. Reg. 1400 (Nov. 30, 1981). Commission Comment: The 2005 amendments amended subsection (a) and added new subsections (a)(1) through (a)(4). Part 600 - Loan Application Requirements and Review § 25-10-601 Application Review Loan applications shall be considered and reviewed only after they are complete. A Loan application shall not be considered complete until all necessary documents, including, but not limited to, security and collateral documents and government permits, have been obtained and received and all applicable fees have been paid. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Amdts Adopted 20 Com. Reg. 16272 (Oct. 15, 1998); Amdts Proposed 19 Com. Reg. 15718 (Oct. 15, 1997); Amdts Proposed 17 Com. Reg. 13807 (Nov. 15, 1995); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994). Commission Comment: [Historical comments removed.] § 25-10-605 Application Documents For all Loans and the continuance of all Loans, the Loan Manager and the Executive Director may request for the following loan documents, as applicable, are obtained: (a) A certification letter from the Loan Manager to the Executive Director that he/she has inspected the individual business establishment and has determined that the business is still in engaged in the same operation mode and that there are no adverse financial conditions preventing recommendation of the new loan, renewal or continuance. © 2022 by The Commonwealth Law Revision Commission (July 28, 2022) Page 22 of 66

TITLE 25: COMMONWEALTH DEVELOPMENT AUTHORITY (b) Interim and last three years Financial Statements (Income Statement & Balance Sheet) and last three years Audited Financial Statement with supporting schedules for loans over $250,000.00. (c) Personal Financial Statements for current year of owner or major stockholders and Individual Tax Returns (filed) with all schedules for the last two years. (d) Current year and last two years Business Gross Receipts Tax (BGRT) & last three years Corporate Income Tax Returns (Form 1120CM) with all schedules. (e) Inventory Aging List, Accounts Receivables, Payables Aging Lists, Rent Rolls & Tenant Lists, & Rental/Lease Agreement. (f) Hazard (fire/typhoon & earthquake) & liability insurance & life insurance policy. (g) Most recent filed Business documents (e.g., Business License(s), Articles of Incorporation or Organization, By-Laws, Certificate of Incorporation & Annual Report). (h) Business Plan/Profile. (i) Corporate Resolution to Borrow. (j) Sketch Map of Business property. (k) Recorded Warranty Deed, Deed of Gift or Certificate of Title & Land Management Approved Survey Property Map. Modified, 1 CMC § 3806(g). History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005). Commission Comment: In subsection (g), the Commission inserted the closing parenthesis. § 25-10-610 Application Fee DCD may, when the Loan application is made, charge each Loan Applicant an application fee not to exceed$ 100.00. The application fee shall be credited to the closing costs if the Loan is made. If the Loan application is not approved, or the borrower cancels the Loan application prior to approval, the deposit fee will not be returned to the Loan Applicant. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002). © 2022 by The Commonwealth Law Revision Commission (July 28, 2022) Page 23 of 66

TITLE 25: COMMONWEALTH DEVELOPMENT AUTHORITY § 25-10-615 Incomplete Application A pending Loan application shall be deemed to have been removed from consideration if incomplete and if the Loan Applicant has been notified in writing of such defect and has not corrected the defect within thirty (30) days of such notification. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994). § 25-10-620 Loan Approval No Loan Applicant shall be deemed to have been granted a Loan unless and until the Executive Director, or his or her designee, so notifies the Loan Applicant in writing and the Loan Applicant indicates his acceptance in writing. Notice by any other DCD employee or member of the Board of Directors, verbally or otherwise, shall be invalid and have no effect and may subject said person to disciplinary action. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994); Adopted 7 Com. Reg. 3585 (May 21, 1985); Proposed 7 Com. Reg. 3468 (Mar. 15, 1985); Proposed 3 Com. Reg. 1400 (Nov. 30, 1981). § 25-10-625 Rejection of Application The Executive Director and the Chairman are authorized to cancel a conditionally approved Loan if the conditions set out in the approval letter are not fulfilled within ninety (90) days after the receipt of such letter by the Loan Applicant. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994). § 25-10-630 Loan Interest Rates DCD shall review and from time to time recommend to the CDA Board of Directors the rates of interest to be assessed its borrowers or any particular borrower. A recommended rate may not exceed the rate authorized by law; and in recommending interest rates DCD shall consider the costs of capitalization, its own administrative expenses in relation to its Loans, overall prevailing market rates, and other economic indicators. DCD may also recommend special interest rates for projects and other undertakings which serve particular socio-economic needs, but with due regard for the overall need of DCD to recover its costs. © 2022 by The Commonwealth Law Revision Commission (July 28, 2022) Page 24 of 66

So in original. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994); Adopted 7 Com. Reg. 3585 (May 21, 1985); Proposed 7 Com. Reg. 3468 (Mar. 15, 1985); Proposed 3 Com. Reg. 1400 (Nov. 30, 1981). Commission Comment: The 2005 amendments deleted former § 25-10-640, entitled “Loan Revision and Fee.” For the history of this section see: Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994); Adopted 7 Com. Reg. 3585 (May 21, 1985); Proposed 7 Com. Reg. 3468 (Mar. 15, 1985); Proposed 3 Com. Reg. 1400 (Nov. 30, 1981). § 25-10-645 Posting and Revision of Fees © 2022 by The Commonwealth Law Revision Commission (July 28, 2022) Page 25 of 66

TITLE 25: COMMONWEALTH DEVELOPMENT AUTHORITY All fees and charges may be reviewed and revised by the Board of Directors. The fees set forth in these Rules and Regulations [this chapter] shall continue in force and effect until reviewed and revised by the Board of Directors. Publication of any revised fees or new fees shall be by posting a schedule of revised fees in the offices of CDA. No amendment of these Rules and Regulations [this chapter] or further publication in the CNMI Register of any revised or new fees shall be required. Modified, 1 CMC § 3806(d). History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994); Adopted 7 Com. Reg. 3585 (May 21, 1985); Proposed 7 Com. Reg. 3468 (Mar. 15, 1985); Proposed 3 Com. Reg. 1400 (Nov. 30, 1981). § 25-10-650 Borrower Records The Board of Directors may, as deemed necessary, require its borrowers to keep records and accounts in accordance with sound and generally accepted business practices, and may require them to furnish necessary information regarding their business operations and accounts. DCD retains the right to inspect its borrowers’ finances, as well their operations, records, and books of accounts. The Board of Directors is further authorized to retain an independent accounting firm to perform the compilation and preparation of financial reports of a borrower, with the costs incurred being borne by the borrower. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994); Adopted 7 Com. Reg. 3585 (May 21, 1985); Proposed 7 Com. Reg. 3468 (Mar. 15, 1985); Proposed 3 Com. Reg. 1400 (Nov. 30, 1981). § 25-10-655 Renewable Energy Preference Business plans and loan applications that incorporate Renewable Energy into their structures, utility and business models, and that make green energy part of their business approach, may be given loan approval preferences over those business plans and loan applications that fail to incorporate Renewable Energy into their businesses. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Adopted 36 Com. Reg. 34696 (Feb. 24, 2014); Proposed 35 Com. Reg. 34318 (Sept. 28, 2013). Commission Comment: [Historical comments removed.] Part 700 - Construction Loan Requirements § 25-10-701 Construction Requirements © 2022 by The Commonwealth Law Revision Commission (July 28, 2022) Page 26 of 66

TITLE 25: COMMONWEALTH DEVELOPMENT AUTHORITY In addition to all other submission requirements, a Loan Applicant seeking to construct a building with Loan proceeds is required to submit the following documents: (a) Complete plans and specifications of the building or improvements to be constructed approved by a certified professional engineer; (b) A schematic drawing of the building and its proposed location; (c) A certification from the Commonwealth Utility Corporation that adequate water service and electricity are available on the premise where the project will be situated; (d) A certification from other appropriate government agencies that the proposed project will not have a negative impact to the existing community and environment including the effect of any applicable zoning laws; (e) A signed copy of the construction contract between the builder and the owner showing, among other things, that DCD is not subject to any liability before, during or after construction is completed; (f) An original copy of the performance and payment bond covering the total amount contracted; (g) An original copy of the workmen’s compensation insurance policy; (h) A signed copy of the construction management contract between the construction manager and the owner. The manager must be licensed to do business in the Commonwealth and must possess a thorough knowledge in construction management. A provision in the construction management contract should provide that the manager must ensure that the project is thoroughly inspected by qualified inspectors and conforms to approved plans and specifications. In addition, the contract shall contain a provision imposing personal liability on the manager for non-performance under the management contract; (i) Cost breakdown for description of materials; and (j) Builder’s Risk Insurance should be obtained with CDA as loss payee; and (k) The DCD Board may waive any of the above requirements with adequate justification of a borrower’s resources and experience, sufficient collateral to support the loan request, and with controlled disbursements, based on percentage of project completion. Most especially since the Northern Mariana Islands has smaller communities and limited access and higher costs associated with those types of services and professionals on their respective islands, which are sometimes exacerbated by extenuating circumstances beyond control. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and © 2022 by The Commonwealth Law Revision Commission (July 28, 2022) Page 27 of 66

TITLE 25: COMMONWEALTH DEVELOPMENT AUTHORITY regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002). Commission Comment: The 2005 amendments added new subsections (i) and (j) and amended subsection (g). § 25-10-705 Construction Loan Disbursement Disbursements will be done based on stages of construction completion pursuant to a request for payment, certified by the contractor, borrower and the bonding company, with a certification letter from the construction manager as to the status of project. Of the amount requested, ten percent (10%) will be retained until completion of the project and expiration of any mechanic’s lien period. Upon completion of the project, borrower shall submit: a completion certification, a release of mechanic’s lien, an affidavit that all liens have been paid, a contractor’s warranty, a certificate of occupancy, an insurance policy on building with CDA as loss payee, and proper government agency approval of any septic tank, if applicable. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005). Commission Comment: [Historical comments removed.] Part 800 - Loan Guaranty and Participation § 25-10-801 Loan Guaranty DCD may guarantee up to ninety percent (90%) of the principal amount of a loan extended to a qualified Loan Applicant by a lender other than DCD. DCD must approve of the lender’s administration and default policies before agreeing to guarantee any loan. DCD shall set aside as a reserve not less than twenty-five percent (25%) of the amount of a guaranteed loan. A Loan Guaranty must meet and satisfy the same criteria as a direct Loan including, but not limited to, the disbursement requirements of § 25-10-1105 and the requirements and restrictions of Part 500, exclusive of § 25-10-515(a). Modified, 1 CMC § 3806(c). History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994); Adopted 7 Com. Reg. 3585 (May 21, 1985); Proposed 7 Com. Reg. 3468 (Mar. 15, 1985); Proposed 3 Com. Reg. 1400 (Nov. 30, 1981). § 25-10-805 One Percent Interest Rate The lender shall impose a one percent (1%) per annum interest rate, which shall be collected by the lender for DCD. This interest rate shall be in addition to the interest rate © 2022 by The Commonwealth Law Revision Commission (July 28, 2022) Page 28 of 66

TITLE 25: COMMONWEALTH DEVELOPMENT AUTHORITY to be charged by the lender under the terms and provisions of its loan, and shall be assessed and collected first, before the interest rate to be charged by the lender. The lender shall collect and remit the one percent (1%) per annum interest rate to DCD on a quarterly basis. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Amdts Adopted 20 Com. Reg. 16272 (Oct. 15, 1998); Amdts Proposed 19 Com. Reg. 15718 (Oct. 15, 1997); Amdts Proposed 17 Com. Reg. 13807 (Nov. 15, 1995). § 25-10-810 Loan Guaranty Documents The Board of Directors shall approve and adopt a standard Guaranty agreement for use with all participating lenders. The Guaranty agreement shall include terms and conditions deemed reasonable and necessary for the protection and purposes of DCD including, but not limited to: (a) A maximum term of five (5) years; (b) Language prohibiting amendments or addendums to a CDA Guaranty; (c) Language prohibiting the subordination of any of CDA’s rights under its guaranty; and (d) With any 90% guaranty, language requiring the lender to complete the foreclosure process before calling the guaranty. Modified, 1 CMC § 3806(f). History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002). Commission Comment: The 2005 amendments added new subsections (a) through (d). § 25-10-815 Examination of Account Upon its request and at all reasonable times, DCD shall be entitled to examine and audit the borrower’s account with lender and copies of any security instruments or loan documents held by lender which relate to disbursements or advances made, or to be made, under the Loan Guaranty. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002). § 25-10-820 Loan Participation Program © 2022 by The Commonwealth Law Revision Commission (July 28, 2022) Page 29 of 66

TITLE 25: COMMONWEALTH DEVELOPMENT AUTHORITY The Board of Directors may jointly participate with banks or other financial institutions in financing a loan to an eligible Loan Applicant. The terms and conditions of the financial participation must be approved by the Board of Directors. DCD and the bank or lending institution shall share the collateral interest on any security for the loan in direct proportion to their loan exposure. The period of repayment shall not be more than the period authorized by these Rules and Regulations [this chapter]. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994). § 25-10-825 Private Projects The Board of Directors may elect to participate in an ongoing or new private sector project or undertaking to further the purpose of DCD. In determining whether or not to participate, the following shall be considered: (a) Whether there are any other private sector lending institutions in the Commonwealth which may participate; (b) To what extent DCD is committing its financial and technical resources for the particular project; (c) If the project is new to the Commonwealth, or an island in the Commonwealth, would such participation protect the future participation of Commonwealth citizens; and (d) Is it in the best interest of the Commonwealth for DCD to participate. If a determination is made to participate, the Board of Directors shall ensure that DCD’s interests are fully secured and that the total amount of funding made available for any given private project is determined solely by the Board of Directors. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994). Part 900 - Security § 25-10-901 Security Policy DCD shall secure its Loans and Loan Guaranties in accordance with sound lending practices, provided that in doing so, DCD shall have due regard for its purposes to promote economic development in the Commonwealth. © 2022 by The Commonwealth Law Revision Commission (July 28, 2022) Page 30 of 66

TITLE 25: COMMONWEALTH DEVELOPMENT AUTHORITY History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994); Adopted 7 Com. Reg. 3585 (May 21, 1985); Proposed 7 Com. Reg. 3468 (Mar. 15, 1985); Proposed 3 Com. Reg. 1400 (Nov. 30, 1981). § 25-10-905 First Mortgage on Real Estate Wherever possible, all Loans shall be secured by a fee-simple, first mortgage or deed of trust interest in real estate and improvements. First position of any mortgage shall be proven by the submission of a preliminary title report (PTR) from a CNMI licensed title insurance company. The allowable Loan to be secured by any fee simple real estate first mortgage on unimproved bare land shall not exceed sixty percent (60%) of the appraised value of the land. The allowable Loan to be secured by any fee simple real estate first mortgage on improved land shall not exceed seventy percent (70%) of the appraised value of the land, including improvements and proposed improvements. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994); Adopted 7 Com. Reg. 3585 (May 21, 1985); Proposed 7 Com. Reg. 3468 (Mar. 15, 1985); Proposed 3 Com. Reg. 1400 (Nov. 30, 1981). § 25-10-910 Second Mortgage on Real Estate Secondary mortgages are discouraged, but may be allowed if a Loan application has a strong economic feasibility and potential for success, the Loan Applicant has a good credit rating and excellent repayment ability, and the total outstanding principal debt of the holder of the first security interest and the proposed second mortgage shall not exceed more than thirty percent (30%) of the appraised value of the land for unimproved bare land or forty percent (40%) of the appraised value of the land for improved land and proposed improvements. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994); Adopted 7 Com. Reg. 3585 (May 21, 1985); Proposed 7 Com. Reg. 3468 (Mar. 15, 1985); Proposed 3 Com. Reg. 1400 (Nov. 30, 1981). Commission Comment: The 2005 amendments deleted former § 25- 10-915, entitled “Third Mortgage on Real Estate.” For the history of this section, see 24 Com. Reg. 19377 (June 17, 2002); 24 Com. Reg. 18813 (Jan. 29, 2002); 16 Com. Reg. 12319 (Aug. 15, 1994); 16 Com. Reg. 11843 (May 15, 1994). § 25-10-915 Third Mortgage on Real Estate Third mortgages may be allowed, in addition, to either a first or second mortgage(s), if a loan application has a strong economic feasibility and potential for success, and the loan © 2022 by The Commonwealth Law Revision Commission (July 28, 2022) Page 31 of 66

TITLE 25: COMMONWEALTH DEVELOPMENT AUTHORITY applicant has a good credit rating and excellent repayment ability. Third mortgages may also be allowed for loan revisions. History: Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Proposed 42 Com. Reg. 43649 (June 28, 2020); § 25-10-920 Leasehold Mortgage The total loan allowable on the first leasehold mortgage interest given as security shall not exceed fifty percent (50%) of the appraised leasehold value (existing as well as proposed leasehold improvements), but excluding the underlying value of the fee simple land. No loan secured only by a leasehold mortgage shall have a repayment term that is greater than the remaining term of the mortgaged lease. Prior to accepting a mortgage on a lease, the borrower shall obtain for DCD an estoppel certificate from the fee simple landowner certifying that the lease is in full force and effect and consenting to the mortgage of the leasehold interest. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994); Adopted 7 Com. Reg. 3585 (May 21, 1985); Proposed 7 Com. Reg. 3468 (Mar. 15, 1985); Proposed 3 Com. Reg. 1400 (Nov. 30, 1981). Commission Comment: [Historical comments removed.] § 25-10-925 Chattel Mortgage and Inventories Loans may further be secured by a chattel mortgage or a security interest on personal and/or business properties provided that such Loan amounts shall not exceed forty percent (40%) of the value of such personal and/or business properties, or of the purchase price thereof, whichever is lower, and provided that DCD receives a first lien on the chattel mortgage or security interest. Crops or agricultural products such as livestock, poultry and fish may not be used as security for any Loan due to their perishable nature. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994); Adopted 7 Com. Reg. 3585 (May 21, 1985); Proposed 7 Com. Reg. 3468 (Mar. 15, 1985); Proposed 3 Com. Reg. 1400 (Nov. 30, 1981). § 25-10-930 Additional Security In addition to any one or combination of the above securities, the Board of Directors shall require individual guaranties from the shareholders of a corporation, the partners in an association or partnership and the owners and members of an LLC. The Board of Directors may also require individual guaranties from directors for a corporation and other managers of the loan applicant and may require an assignment of receivables and/or assignment of life or mortgage insurance from each Loan Applicant. All guarantors, endorsers or other © 2022 by The Commonwealth Law Revision Commission (July 28, 2022) Page 32 of 66

TITLE 25: COMMONWEALTH DEVELOPMENT AUTHORITY cosigners are subject to the same credit underwriting standards as the principal loan applicant. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 36 Com. Reg. 34696 (Feb. 24, 2014); Amdts Proposed 35 Com. Reg. 34318 (Sept. 28, 2013); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994); Adopted 7 Com. Reg. 3585 (May 21, 1985); Proposed 7 Com. Reg. 3468 (Mar. 15, 1985); Proposed 3 Com. Reg. 1400 (Nov. 30, 1981). Commission Comment: [Historical comments removed.] § 25-10-935 Appraisals The Board of Directors in determining the sufficiency of any real or personal property offered as security shall use the current market value of the property, and may require a complete appraisal report for all Loans greater than $25, 000 or a l e tt ero f a pp r ai s a l (i . e ., c u r b s t o n e a pp r ai s a l) f or a ll L o an s l ess t han$ 25,000, subject to the discretion of the Executive Director. All appraisals shall be by an appraiser approved and engaged by DCD. DCD shall contact the appraiser and order the appraisal; however, the cost of, and any expenses associated with, the appraisal shall be paid by and be the obligation of the Loan Applicant. The Board of Directors shall only approve and engage qualified appraisers who are U.S. educated, and who are licensed and authorized under applicable CNMI law to conduct business and to appraise commercial and residential property in the CNMI. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Amdts Adopted 20 Com. Reg. 16272 (Oct. 15, 1998); Amdts Proposed 19 Com. Reg. 15718 (Oct. 15, 1997); Amdts Proposed 17 Com. Reg. 13807 (Nov. 15, 1995); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994); Adopted 7 Com. Reg. 3585 (May 21, 1985); Proposed 7 Com. Reg. 3468 (Mar. 15, 1985); Proposed 3 Com. Reg. 1400 (Nov. 30, 1981). Commission Comment: [Historical comments removed.] § 25-10-940 Title Insurance All Loans having real estate as security may be required to have title insurance policies naming CDA as the loss payee. All title insurance and title reports submitted to CDA must be from a CNMI licensed title insurance company. The expense of title insurance, casualty insurance and title opinions shall be paid solely by the Loan Applicant. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005). Part 1000 - Insurance © 2022 by The Commonwealth Law Revision Commission (July 28, 2022) Page 33 of 66

TITLE 25: COMMONWEALTH DEVELOPMENT AUTHORITY § 25-10-1001 Property & Casualty Insurance (“P&C”) All Loans having real estate improvements as security shall have the necessary insurance policies insuring the improvements against any damage due to earthquake, fire, typhoon, and any other casualty and liability up to the full insurable value of the improvements. Such insurance shall be obtained from a company on the list of insurance companies approved by DCD and licensed to do business in the CNMI. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994); Adopted 7 Com. Reg. 3585 (May 21, 1985); Proposed 7 Com. Reg. 3468 (Mar. 15, 1985); Proposed 3 Com. Reg. 1400 (Nov. 30, 1981). § 25-10-1005 Surety With respect to construction Loans, a Loan Applicant may be required to produce a performance and a payment bond each covering the full value of the project, the improvements and the construction cost. The DCD Board may waive any of the above requirements with adequate justification of a borrower’s resources and experience, sufficient collateral to support the loan request, and with controlled disbursements, based on percentage of project competition. Most especially since the Northern Mariana Islands has smaller communities and limited access and higher costs associated with those type of services and professionals on their respective islands, which are sometimes exacerbated by extenuating circumstances beyond control. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005). Commission Comment: The 2005 amendments deleted former § 25-10-1005, entitled “Title Insurance” and former § 25-10-1010, entitled “Bonding.” For the history of these sections, see 24 Com. Reg. 19377 (June 17, 2002); 24 Com. Reg. 18813 (Jan. 29, 2002); 16 Com. Reg. 12319 (Aug. 15, 1994); 16 Com. Reg. 11843 (May 15, 1994); 7 Com. Reg. 3585 (May 21, 1985); 7 Com. Reg. 3468 (Mar. 15, 1985); 3 Com. Reg. 1400 (Nov. 30, 1981). § 25-10-1010 Life Insurance All fishing, farming and agricultural borrowers may be required to maintain adequate life insurance in an amount equal to or greater than the outstanding balance of their Loan principal, interest and fees. This requirement of life insurance may only be waived upon a showing of three (3) declination letters from three (3) DCD approved life insurance companies. Depending on the planned use of the Loan proceeds and/or the risks involved with the business ventures, DCD may also require general commercial Loan borrowers to maintain life insurance in amounts DCD deems sufficient to adequately cover the Loan proceeds and/or risks involved. On all life insurance policies covering Loans, DCD shall be named as the first or primary beneficiary. Upon approval of a Loan application, DCD shall inform the Loan Applicant of any life insurance requirement. In the event the Loan © 2022 by The Commonwealth Law Revision Commission (July 28, 2022) Page 34 of 66

TITLE 25: COMMONWEALTH DEVELOPMENT AUTHORITY Applicant has an existing life insurance policy, with coverage in excess of the Loan amount, the borrower may assign the benefits of the existing policy to DCD to satisfy the life insurance requirement. Unless the borrower has first obtained an acceptable waiver, no loan proceeds shall be disbursed to any borrower, until the requisite life insurance has been obtained and until the first year premium has been paid in full. Modified, 1 CMC § 3806(g). History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Amdts Adopted 20 Com. Reg. 16272 (Oct. 15, 1998); Amdts Proposed 19 Com. Reg. 15718 (Oct. 15, 1997); Amdts Proposed 17 Com. Reg. 13807 (Nov. 15, 1995); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994); Adopted 7 Com. Reg. 3585 (May 21, 1985); Proposed 7 Com. Reg. 3468 (Mar. 15, 1985); Proposed 3 Com. Reg. 1400 (Nov. 30, 1981). § 25-10-1015 P&C, Surety and Life Insurance Companies Loan Applicants may be required to purchase all required insurance and bonds from any one of the several companies approved by DCD. DCD shall keep a list of such approved P&C, surety and life insurance companies for easy reference and the following shall apply: (a) Upon approval of the Loan Applicant’s insurance application by the insurance firm, initial premiums may be paid, at the time of closing of the Loan, out of the first disbursement of loan proceeds; (b) Subsequent premiums shall be paid by the borrower in accordance with the insurance policies terms and conditions; (c) Should a borrower fail to pay any of the subsequent premiums, DCD may pay such premium on behalf of the borrower; (d) Should DCD pay such premium on behalf of the borrower, then the borrower’s Loan shall be restructured to include the premium payment by DCD, and any related fees, in the principal amount owed. In the event a loan is restructured, the borrower shall be advised by DCD of the new monthly payment amounts; (e) Borrowers may, at any time during the term of their Loans, select a different insurance firm, as long as the newly selected insurance firm can satisfactorily meet the insurance requirements of DCD and is on the DCD approved list of companies; (f) The insurance firm and the borrower are required to notify DCD, in a timely manner, when an insurance policy is in danger of expiring due to unpaid premiums; and when an insurance policy lapses due to nonpayment; and © 2022 by The Commonwealth Law Revision Commission (July 28, 2022) Page 35 of 66

TITLE 25: COMMONWEALTH DEVELOPMENT AUTHORITY (g) Should it choose, DCD may establish an escrow account for the purpose of collecting funds for necessary insurance. Such escrow accounts are to be administered as directed by the DCD Board. Modified, 1 CMC § 3806(g). History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Amdts Adopted 20 Com. Reg. 16272 (Oct. 15, 1998); Amdts Proposed 19 Com. Reg. 15718 (Oct. 15, 1997); Amdts Proposed 17 Com. Reg. 13807 (Nov. 15, 1995); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994); Adopted 7 Com. Reg. 3585 (May 21, 1985); Proposed 7 Com. Reg. 3468 (Mar. 15, 1985); Proposed 3 Com. Reg. 1400 (Nov. 30, 1981). Commission Comment: The 2005 amendments added new subsection (g) and amended the opening paragraph and subsections (a), (b), (c) and (e). The Commission removed “and” from the end of subsection (e) and inserted “and” at the end of subsection (f). The Commission changed the final period to a semi-colon in subsection (f). § 25-10-1020 Lapsed Coverage In the event any borrower fails to obtain P&C, life insurance, property insurance or any other insurance required under the Loan documents or policies, or to maintain such insurance coverage, then the borrower shall be called in to meet with the DCD Loan Manager, and the following shall apply: (a) The Loan Manager shall inform the borrower that, unless the necessary insurance is obtained or the policy is reinstated, the Loan will be declared to be in default; (b) Upon approval of the borrower’s insurance application by the insurance firm, DCD may pay the first year premium, on behalf of the borrower, and the Loan may be restructured to reflect the new principal amount including the premium paid by DCD. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Amdts Adopted 20 Com. Reg. 16272 (Oct. 15, 1998); Amdts Proposed 19 Com. Reg. 15718 (Oct. 15, 1997); Amdts Proposed 17 Com. Reg. 13807 (Nov. 15, 1995). Commission Comment: The 2005 amendments deleted former subsection (b), redesignated and amended subsection (c) and amended the opening paragraph. Part 1100 - Disbursements § 25-10-1101 Check Signing Authority All checks issued by DCD shall contain two signatures, one of which shall be the Executive Director (or other official of DCD with check signing authority as approved by the Board of Directors of CDA) and the other by the Chairman (or Vice Chairman or the Chairman © 2022 by The Commonwealth Law Revision Commission (July 28, 2022) Page 36 of 66

TITLE 25: COMMONWEALTH DEVELOPMENT AUTHORITY or Vice Chairman of the CDA Board of Directors in the absence of the Chairman or Vice Chairman). In the absence of both Chairmen and Vice Chairmen, the Board of Directors shall appoint one among its members to sign jointly with the Executive Director or other official of DCD. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994); Adopted 7 Com. Reg. 3585 (May 21, 1985); Proposed 7 Com. Reg. 3468 (Mar. 15, 1985); Proposed 3 Com. Reg. 1400 (Nov. 30, 1981). § 25-10-1105 Disbursement Requirements No funds shall be disbursed unless the Loan application is complete and all documents have been fully reviewed and executed by all necessary parties and all fees and charges have been paid or added to the total loan amount. All disbursements are subject to the accounting procedures and policies set forth under the CDA Act [4 CMC §§ 10101, et seq.] and these Rules and Regulations [this chapter]. These disbursement requirements shall also apply to any funds guaranteed by DCD and disbursed by a private bank or lender. Modified, 1 CMC § 3806(d). History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994); Adopted 7 Com. Reg. 3585 (May 21, 1985); Proposed 7 Com. Reg. 3468 (Mar. 15, 1985); Proposed 3 Com. Reg. 1400 (Nov. 30, 1981). § 25-10-1110 Retained Proceeds In the event an approved Loan is for a construction project and the contractor is not bonded, the standard withholding of ten percent (10%) of the project cost may be increased at the discretion of the Board of Directors. With each incremental payment, an amount equal to a minimum of ten percent (10%) of the incremental payment shall be withheld to assure that all subcontractors, materialmen and suppliers have been paid. Such withheld portion shall be released only after the project has been completed, upon finding by the Chairman, or his or her designee, that all the materialmen, subcontractors, and other suppliers have been paid. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Amdts Adopted 20 Com. Reg. 16272 (Oct. 15, 1998); Amdts Proposed 19 Com. Reg. 15718 (Oct. 15, 1997); Amdts Proposed 17 Com. Reg. 13807 (Nov. 15, 1995); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994); Adopted 7 Com. Reg. 3585 (May 21, 1985); Proposed 7 Com. Reg. 3468 (Mar. 15, 1985); Proposed 3 Com. Reg. 1400 (Nov. 30, 1981). © 2022 by The Commonwealth Law Revision Commission (July 28, 2022) Page 37 of 66

TITLE 25: COMMONWEALTH DEVELOPMENT AUTHORITY § 25-10-1115 Incremental Disbursements Each construction increment shall be done according to plans and specifications and must be approved by the Loan Applicant or owner. Upon receipt of such approval, then such increment shall be inspected by the Executive Director, or his or her designee, to determine that the work has been performed according to the plans and specifications. Upon approval of each increment by the Executive Director, or his or her designee, funds may accordingly be disbursed, subject to the ten percent (10%) withholding set forth above. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Amdts Adopted 20 Com. Reg. 16272 (Oct. 15, 1998); Amdts Proposed 19 Com. Reg. 15718 (Oct. 15, 1997); Amdts Proposed 17 Com. Reg. 13807 (Nov. 15, 1995); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994); Adopted 7 Com. Reg. 3585 (May 21, 1985); Proposed 7 Com. Reg. 3468 (Mar. 15, 1985); Proposed 3 Com. Reg. 1400 (Nov. 30, 1981). § 25-10-1120 Purchase of Equipment and Materials In the event that disbursements involve the purchase of equipment, materials or properties then disbursements shall be made only upon the Loan Applicant producing satisfactory invoices or receipts, purchase orders, or other types of evidences of the impending purchase. No further disbursements shall be made without first satisfying the previous disbursements with supporting documents. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994); Adopted 7 Com. Reg. 3585 (May 21, 1985); Proposed 7 Com. Reg. 3468 (Mar. 15, 1985); Proposed 3 Com. Reg. 1400 (Nov. 30, 1981). § 25-10-1125 Disbursement Discretion The Executive Director shall exercise his or her sound discretion in authorizing the release or disbursement of any approved Loan proceeds. All disbursements are to be used for approved purposes and as set forth in the Loan commitment/approval letter from DCD. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994); Adopted 7 Com. Reg. 3585 (May 21, 1985); Proposed 7 Com. Reg. 3468 (Mar. 15, 1985); Proposed 3 Com. Reg. 1400 (Nov. 30, 1981). Part 1200 - Professionals § 25-10-1201 Approved Professionals © 2022 by The Commonwealth Law Revision Commission (July 28, 2022) Page 38 of 66

TITLE 25: COMMONWEALTH DEVELOPMENT AUTHORITY All professionals who seek to be paid out of proceeds from a Loan, or who provide their services in connection with the Loan approval process, including without limitation, Accountants, Architects, Attorneys, Appraisers, Contractors, Engineers, Insurers, Lenders and Surveyors, must meet certain minimum requirements of qualification before payment for their services, or reliance on their opinions will be permitted. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002). Commission Comment: [Historical comments removed.] § 25-10-1205 Pre-Qualified List The Board of Directors may cause to be published a request for proposals from professionals, setting forth the minimum qualifications and from the responses, create a pre-qualified list. At any time, professionals may submit their qualifications and request inclusion on the list. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002). § 25-10-1210 Requirements When establishing minimum qualifications, the Board of Directors may require, among other things: the possession of a Commonwealth business license for at least two (2) years in advance of the request for inclusion on the pre-qualified list; professional licensing from the relevant professional society; a client list of customers from the Commonwealth who can attest to the quality of the professional’s work; and other proof of the ability of the professional to perform. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002). Part 1300 - Feasibility Studies and Technical Assistance § 25-10-1301 Feasibility Studies The Board of Directors, with the approval of the CDA Board of Directors, may authorize the total or partial funding of economic feasibility studies on specific projects in the areas of agriculture, aquiculture, mariculture, light industries, fishing and of other economic projects. With the approval of the CDA Board of Directors, DCD may hire a consultant or retain the services of a professional firm to perform the feasibility study or authorize a prospective loan applicant to perform such a study. © 2022 by The Commonwealth Law Revision Commission (July 28, 2022) Page 39 of 66

TITLE 25: COMMONWEALTH DEVELOPMENT AUTHORITY History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002). Commission Comment: [Historical comments removed.] § 25-10-1305 Results and Reports The results of any feasibility studies undertaken solely by DCD shall be provided without charge to interested residents of the Commonwealth, except that a reasonable fee for printing and reproduction costs may be charged. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994). § 25-10-1310 Technical Assistance At its option and without obligation, the Board of Directors may provide, through its staff or by retaining the services of outside experts, consultants, architects, engineers, technical or management assistance to borrowers, businesses or to assure quality construction of any project undertaken or financed by DCD. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994). Part 1400 - Loan Servicing § 25-10-1401 Tracking System The Executive Director shall institute a follow-up or tickler system and accounting system to assure that all the payments concerning all Loans are received in a timely fashion. Any accounting system required by law shall be followed. The system used shall include the ability to follow-up on insurance payments, principal and interest payments that are delinquent more than fifteen (15) days and production of any financial statements required pursuant to the Loan agreement. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994); Adopted 7 Com. Reg. 3585 (May 21, 1985); Proposed 7 Com. Reg. 3468 (Mar. 15, 1985); Proposed 3 Com. Reg. 1400 (Nov. 30, 1981). © 2022 by The Commonwealth Law Revision Commission (July 28, 2022) Page 40 of 66

TITLE 25: COMMONWEALTH DEVELOPMENT AUTHORITY § 25-10-1405 Monthly Reports For the first year, borrowers may be required to submit monthly reports to show exactly how the Loan proceeds are being spent. After this initial period, all Loans shall require a least an annual or semi-annual financial report from the borrowers together with a status report on the business. For Loans in excess of $500,000.00, the Executive Director shall require a borrower to submit annual financial statements audited by a certified public accountant or other documentation displaying the financial condition of the borrower. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Amdts Adopted 20 Com. Reg. 16272 (Oct. 15, 1998); Amdts Proposed 19 Com. Reg. 15718 (Oct. 15, 1997); Amdts Proposed 17 Com. Reg. 13807 (Nov. 15, 1995); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994); Adopted 7 Com. Reg. 3585 (May 21, 1985); Proposed 7 Com. Reg. 3468 (Mar. 15, 1985); Proposed 3 Com. Reg. 1400 (Nov. 30, 1981). § 25-10-1410 Loan Quality Assurance & Control The Executive Director and the Loan Manager shall conduct a review every quarter on all Loans. As part of that review, the file documentation must be reviewed to ensure that the borrowers are providing all updated loan documents required by DCD. Each loan requirement must also be scrutinized to ensure that the borrower has satisfied all terms and conditions of the Loan agreement. (a) The Executive Director shall supervise all lending activities and quality of Loans and shall assist the Loan Division with loan functions. (b) The Executive Director shall ensure that all Loan applications and approved Loans are domiciled and serviced by the central office (Saipan) and that all such Loans approved are within the CNMI jurisdiction and that there is no deviation. (c) The Executive Director and Loan Manager shall report to the Board of Directors any exceptions and or deviations revealed during the review. (d) Any Loan application in excess of the Executive Director$ 25,000.00 credit limit must be presented and reported to the Board or Directors for further review and final approval or disapproval. (e) The Loan Manager must maintain an updated list of all Loans and guarantees. (f) The Loan Manager must contact the borrowers ninety (90) days prior to the expiration of Loans to discuss renewal requirements. © 2022 by The Commonwealth Law Revision Commission (July 28, 2022) Page 41 of 66

TITLE 25: COMMONWEALTH DEVELOPMENT AUTHORITY (g) The Loan Manager shall insure that the handling of credit reports, insurance, documentation, filing and other administrative duties and functions of the credit division are in accordance to standard documentary procedure and lending policy. (h) The Loan Manager shall prepare and submit to the Executive Director the month- end delinquent reports as well as track the recoveries of past due Loans, either performing, non-performing or Loans handled by attorneys. (i) The Executive Director shall submit his/her Loan Quality Assurance & Control report to the Board of Directors for further review and disposition. This quarterly report is due on or before the tenth (10th) day following the quarter end. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005). § 25-10-1415 Failure to Submit Reports If a borrower fails to submit a requested financial or status report, the Executive Director may order an investigation or audit of the financial condition of the borrower upon five (5) days written notice to the borrower. Any failure to submit the required reports or refusal to cooperate with an investigation or audit shall be deemed and considered an event of default under the Loan. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002). § 25-10-1420 Executive Director Meetings and Reports Borrowers shall be required to meet with the Executive Director, or his or her designee, as often as the Executive Director deems is necessary to discuss Loan problems or review business records. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Amdts Adopted 20 Com. Reg. 16272 (Oct. 15, 1998); Amdts Proposed 19 Com. Reg. 15718 (Oct. 15, 1997); Amdts Proposed 17 Com. Reg. 13807 (Nov. 15, 1995); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994); Adopted 7 Com. Reg. 3585 (May 21, 1985); Proposed 7 Com. Reg. 3468 (Mar. 15, 1985); Proposed 3 Com. Reg. 1400 (Nov. 30, 1981). Part 1500 - Loan Repayment § 25-10-1501 Term of Loan © 2022 by The Commonwealth Law Revision Commission (July 28, 2022) Page 42 of 66

TITLE 25: COMMONWEALTH DEVELOPMENT AUTHORITY The repayment period or term of a Loan may not exceed thirty (30) years, exclusive of any grace period, revisions or extensions. A Loan may not be revised or extended more than five (5) times, not including any revisions or extensions made prior to the 2005 amendment of these regulations [this chapter]. A Loan Applicant may be granted a term of more than twelve (12) years only if the Loan is secured by a first mortgage of sufficient real property. If the Loan is secured only by a second mortgage of real property, its term may not exceed twelve (12) years inclusive of any grace period, revisions or extensions. If the Loan is secured only by a chattel mortgage, its term may not exceed five (5) years, inclusive of any grace period, revisions or extensions, except upon submission of financial statements, bank statements, and approval of an increased term by the Board of Directors. When determining the term of Loan, the Board of Directors shall consider, among other things, the repayment capability of the Loan Applicant and the useful life of the assets to be acquired with the Loan. Modified, 1 CMC § 3806(d). History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Amdts Adopted 20 Com. Reg. 16272 (Oct. 15, 1998); Amdts Proposed 19 Com. Reg. 15718 (Oct. 15, 1997); Amdts Proposed 17 Com. Reg. 13807 (Nov. 15, 1995); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994); Adopted 7 Com. Reg. 3585 (May 21, 1985); Proposed 7 Com. Reg. 3468 (Mar. 15, 1985); Proposed 3 Com. Reg. 1400 (Nov. 30, 1981). § 25-10-1505 Advance Payments and Early Payoff There shall be no minimum repayment period requirement, prohibition, fee charge or penalty for an advance payment on or the early pay-off of a Loan. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002). Commission Comment: [Historical comments removed.] § 25-10-1510 No Assumption of Loan No assumption shall be allowed of any Loan without the prior pre-approval of the Board of Directors. Any pre-approved assumption shall be conditioned on the qualification of the party seeking to assume the Loan as an eligible Loan Applicant. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002). § 25-10-1515 Death of Borrower © 2022 by The Commonwealth Law Revision Commission (July 28, 2022) Page 43 of 66

TITLE 25: COMMONWEALTH DEVELOPMENT AUTHORITY Upon the death of a borrower, the entire unpaid balance of the Loan shall be immediately due and payable. First, the Loan Manager shall claim and collect any life insurance proceeds available to be applied toward the Loan. If life insurance proceeds are insufficient, then the Board of Directors may allow assumption of the Loan by the heirs of the borrower if a final decree in the probate of the borrower identifies the heirs and approves distribution to them of the mortgaged property and Loan, and if the respective heirs themselves qualify as eligible Loan Applicant and execute all necessary documents. In the event the insurance proceeds are insufficient, and the Loan is unable to be assumed by heirs, then DCD shall pursue foreclosure and seek to collect its Loan in court. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002). § 25-10-1520 Monthly Payments All Loan payments shall be due and payable monthly. Monthly payments on the Loan shall be made in accordance with the executed Loan documents. Unless the Board of Directors agrees, or the Loan documents state, otherwise, timely monthly payments will first be applied against any accrued interest and then against the outstanding principal amount. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002). § 25-10-1525 Past Due Payments Any payments toward a delinquent Loan or that are past due or not made on or before the date they are due under the executed Loan documents shall first be applied against any outstanding out-of-pocket expenses and charges associated with the Loan including, but not limited to, legal fees, publication, insurance, court and appraisal costs, then against any accrued interest and finally against the outstanding principal amount. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005). § 25-10-1530 Late Payment Fees In accordance with the terms and conditions of the Loan documents, late payment fees may be charged each time a monthly payment is missed or delayed more than fifteen (15) calendar days. The amount of late payment fees shall be posted and as determined by the Board of Directors as circumstances require. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and © 2022 by The Commonwealth Law Revision Commission (July 28, 2022) Page 44 of 66

TITLE 25: COMMONWEALTH DEVELOPMENT AUTHORITY regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002). § 25-10-1535 Additional Required Payments It is a policy of DCD to continually foster economic development and, accordingly, borrowers shall be encouraged to pay-off their Loans as swiftly as they are able in order to better circulate DCD’s available loan funds. It shall be an understood and agreed upon condition of each Loan, that any proceeds generated by a Loan that exceed those required to operate and preserve the business should be used to pay down or pay-off the Loan. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002). Part 1600 - Loan Revisions and Refinancing § 25-10-1601 Loan Revision Subject to the approval of the Board of Directors, a borrower may request and receive a loan revision. A Loan may not be revised or extended more than five (5) times, not including any revisions or extensions made prior to the 2005 amendment of these regulations [this chapter]. Modified, 1 CMC § 3806(d). History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005). Commission Comment: The 2005 amendments added this new part 1600 and moved former part 1600 to part 1900 of this chapter. § 25-10-1605 Loan Revision Fee As a condition of every loan revision, the borrower shall be assessed and shall pay a loan revision fee equal to one quarter (1/4 or .25) of one percent (1% or .01), which is equal to .0025 of the outstanding balance of the Loan plus any applicable legal fees but not less than $125.00. Any assessed loan revision fee must be paid before a loan can be revised and may not be included in or added to principal amount of the loan. The Executive Director may exercise discretion in waiving a loan revision fee for those borrowers who are approved for a loan revision, due to financial hardship and/or other extenuating circumstances beyond their control. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005). © 2022 by The Commonwealth Law Revision Commission (July 28, 2022) Page 45 of 66

TITLE 25: COMMONWEALTH DEVELOPMENT AUTHORITY § 25-10-1610 Waiver of Interest and Late Fees In general, it is a recognized policy that accrued interest and late fees shall not be waived. Further, in recognition of 4 CMC § 10402(f) and the fact that CDA pays its administrative expenses, in large part, out of earned interest on its loans, only the CDA Board can authorize the waiver of interest or fees and, even then, only as part of negotiated settlements or declared emergencies as set forth in § 25-10-1615. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005). § 25-10-1615 State of Emergency Relief In the event the U.S. President declares a state of emergency for all or part of the CNMI, and in the event the declared emergency reasonably impacts some or all of the DCD borrowers, the CDA Board may waive interest and penalties for a period up to six (6) months for those borrowers who are both: (a) Fully performing, current borrowers; (b) Who are affected by the declared emergency; and (c) Judgment debtors. Modified, 1 CMC § 3806(f). History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005). § 25-10-1620 Working With Borrowers Subject to very real time and resource limitations, the Loan Division shall use its best efforts to work with its delinquent borrowers to facilitate revisions in those situations where such an option is feasible, and the borrower is willing. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005). § 25-10-1625 Loan Refinancing Subject to the approval of the Board of Directors, a borrower whose Loan is current may refinance his or her Loan to take advantage of an available and reduced interest rate or to consolidate a supplemental DCD loan with his or her DCD Loan. In every refinance situation, the borrower must first be qualified as if she was a new DCD borrower, including the presentation of sufficient security and mortgages. © 2022 by The Commonwealth Law Revision Commission (July 28, 2022) Page 46 of 66

TITLE 25: COMMONWEALTH DEVELOPMENT AUTHORITY History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005). § 25-10-1630 Loan Refinancing Fee As a condition of every loan refinance, the borrower shall be assessed and shall pay a reasonable loan refinance fee to be set by the Board of Directors and posted in accordance with § 25-10-645. Any assessed loan refinance fee must be paid before a loan can be refinanced and may not be included in or added to principal amount of the loan. Modified, 1 CMC § 3806(c). History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005). Part 1700 - Loan Collection and Foreclosure § 25-10-1701 Monitoring The Executive Director and Loan Manager shall closely monitor the repayment of all Loans and shall prepare and issue reports for the Board of Directors as required by § 25-10-1410. Modified, 1 CMC § 3806(c). History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Amdts Adopted 20 Com. Reg. 16272 (Oct. 15, 1998); Amdts Proposed 19 Com. Reg. 15718 (Oct. 15, 1997); Amdts Proposed 17 Com. Reg. 13807 (Nov. 15, 1995); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994); Adopted 7 Com. Reg. 3585 (May 21, 1985); Proposed 7 Com. Reg. 3468 (Mar. 15, 1985); Proposed 3 Com. Reg. 1400 (Nov. 30, 1981). § 25-10-1705 Fifteen Day Phone Call If any payment is not received by the fifteenth (15th) day after its due date, then the Loan Manager, or his or her designee, may attempt to contact the borrower by telephone informing them of the payment default. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005). § 25-10-1710 DCD Thirty Day Notice © 2022 by The Commonwealth Law Revision Commission (July 28, 2022) Page 47 of 66

TITLE 25: COMMONWEALTH DEVELOPMENT AUTHORITY If any payment is not received by the thirtieth (30th) day after its due date, then the Loan Manager, or his or her designee, shall again attempt to contact the borrower by telephone or by written letter informing them of the payment default. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Amdts Adopted 20 Com. Reg. 16272 (Oct. 15, 1998); Amdts Proposed 19 Com. Reg. 15718 (Oct. 15, 1997); Amdts Proposed 17 Com. Reg. 13807 (Nov. 15, 1995); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994); Adopted 7 Com. Reg. 3585 (May 21, 1985); Proposed 7 Com. Reg. 3468 (Mar. 15, 1985); Proposed 3 Com. Reg. 1400 (Nov. 30, 1981). § 25-10-1715 DCD Sixty Day Notice If any payment is not received by the sixtieth (60th) day after its due date, then the Loan Manager, or his or her designee, shall again attempt to contact the borrower by telephone or by written letter informing them of the payment default. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Amdts Adopted 20 Com. Reg. 16272 (Oct. 15, 1998); Amdts Proposed 19 Com. Reg. 15718 (Oct. 15, 1997); Amdts Proposed 17 Com. Reg. 13807 (Nov. 15, 1995); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994). § 25-10-1720 Demand Letter If any payment is ninety (90) days or more delinquent, the matter shall be forwarded to CDA Legal Counsel together with a delinquency update showing the amount of principal, interest and fees needed to bring the Loan current. CDA Legal Counsel shall send the borrower a letter demanding payment within thirty (30) days. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Amdts Adopted 20 Com. Reg. 16272 (Oct. 15, 1998); Amdts Proposed 19 Com. Reg. 15718 (Oct. 15, 1997); Amdts Proposed 17 Com. Reg. 13807 (Nov. 15, 1995); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994); Adopted 7 Com. Reg. 3585 (May 21, 1985); Proposed 7 Com. Reg. 3468 (Mar. 15, 1985); Proposed 3 Com. Reg. 1400 (Nov. 30, 1981). § 25-10-1725 Notice of Default If the borrower fails to bring the Loan current within the thirty (30) days stated in the Demand Letter, the Loan Manager, or his or her designee, may direct CDA Legal Counsel to send the borrower a Notice of Default in accordance with the Commonwealth’s Mortgage Foreclosure Act (2 CMC §§ 4537, et seq.). The Loan Manager, or his or her designee, shall provide CDA Legal Counsel with an Account Update of all principal, interest and fees outstanding and the working file in order to facilitate the drafting of a © 2022 by The Commonwealth Law Revision Commission (July 28, 2022) Page 48 of 66

TITLE 25: COMMONWEALTH DEVELOPMENT AUTHORITY Notice of Default. A Notice of Default must be served personally or by certified mail, return receipt requested, upon the borrower. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Amdts Adopted 20 Com. Reg. 16272 (Oct. 15, 1998); Amdts Proposed 19 Com. Reg. 15718 (Oct. 15, 1997); Amdts Proposed 17 Com. Reg. 13807 (Nov. 15, 1995); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994). § 25-10-1730 Other Defaults If a borrower has defaulted for any reason other than the failure to make a monthly Loan payment, and notice of such default has been given to the borrower and the borrower has failed to cure said default within thirty (30) days or within the period provided for in the Loan documents, the Loan Manager, or his or her designee, may direct CDA Legal Counsel to send the borrower a Notice of Default and to commence foreclosure notwithstanding the fact that said default has not yet continued for the periods applied to defaults due to a failure to make a monthly payment. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002). § 25-10-1735 Deed in Lieu of Foreclosure (a) In the event of default, the Loan Manager, together with the Executive Director, may propose a deed in lieu of foreclosure to the defaulted borrower. For purposes of these regulations [this chapter], a deed in lieu of foreclosure shall be defined as when the defaulted borrower voluntarily agrees to exchange by way of a deed all of his or her mortgaged property for the elimination of all or a part of his debt. (b) Before any deed can be accepted, a clean Preliminary Title Report (PTR) and a current and approved appraisal must be obtained for the mortgaged property and the cost of such PTR and appraisal must be paid by the borrower. For purposes of this section, an appraisal shall be considered “current” if its “date of value” is within one (1) year of the date of the deed in lieu of foreclosure. The appraised value will be used for the value of the mortgaged property. In the event an appraisal value exceeds the outstanding balance of the defaulted loan, no credit or payment shall be made by CDA to the defaulted borrower for the difference. The value assigned the mortgaged property shall be the value of the loan only. (c) Unless some other justifiable resolution is approved by the Board of Directors, any debt remains (anything above the appraised value of the mortgaged property) shall be reduced to a new note with new terms. If the defaulted borrower provides new and acceptable security for this new note, interest rates may be reduced; otherwise the interest © 2022 by The Commonwealth Law Revision Commission (July 28, 2022) Page 49 of 66

TITLE 25: COMMONWEALTH DEVELOPMENT AUTHORITY rate on the new loan should remain the same as the rate for the old loan unless the Board of Directors otherwise approves. (d) Only CDA mortgaged properties can be used for deeds in lieu of foreclosure. The Board of Directors may, however, upon recommendation of and justification by the Loan Manager and Executive Director approve deed(s) in lieu of foreclosure that convey the mortgaged properties plus or together with other unmortgaged property. Before such additional property can be accepted, a clean PTR and current approved appraisal must also be obtained for such unmortgaged property. Otherwise, no other, new or substitute property can qualify for a deed in lieu of foreclosure. Modified, 1 CMC § 3806(d). History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 34 Com. Reg. 32419 (May 29, 2012); Amdts Proposed 34 Com. Reg. 32363 (Mar. 29, 2012); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005). Commission Comment: [Historical comments removed.] § 25-10-1740 Complaint to Foreclose After the Notice of Default is served on the borrower, and if the borrower fails to cure the default in the time frame allowed, and in the manner directed by the Loan Manager or his or her designee, and if the deed in lieu of foreclosure option has been rejected by the borrower, then CDA Legal Counsel may be directed to file a lawsuit to collect the Loan and foreclose upon the mortgages. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Amdts Adopted 20 Com. Reg. 16272 (Oct. 15, 1998); Amdts Proposed 19 Com. Reg. 15718 (Oct. 15, 1997); Amdts Proposed 17 Com. Reg. 13807 (Nov. 15, 1995); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994). § 25-10-1745 Acceleration of Loan Upon filing of the lawsuit, the Loan shall be accelerated and the entire principal balance plus any accrued interest shall become immediately due and payable. Prejudgment interest shall accrue on the principal at the rate established in the Loan agreement. Prior to the entry of judgment, the borrower may have the right, as set forth by the law, to cure the default and bring the Loan current. After judgment, interest shall accrue at the rate established by law for judgments. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994). © 2022 by The Commonwealth Law Revision Commission (July 28, 2022) Page 50 of 66

TITLE 25: COMMONWEALTH DEVELOPMENT AUTHORITY § 25-10-1750 Judgment and Auction Upon entry of a judgment in the lawsuit, a copy of the judgment shall be served upon the borrower. If the borrower fails to pay the entire judgment amount within three (3) months from the time borrower is served the copy of the judgment, all properties mortgaged as security for the Loan shall be noticed for sale. The Board of Directors shall set the minimum bid for any auction after considering the appraisal obtained, the outstanding loan balance and all other relevant documents. All auction notices shall include the minimum bid set by the Board of Directors, and shall provide notice that the Board of Directors reserves the right: to withdraw the mortgaged property from auction before the sale or before a bid for the property is accepted; to adjourn the auction without notice at any time before the mortgaged property is struck off, without incurring any liability whatsoever thereby; and to reject any and all bids. At auction, CDA may purchase the mortgaged property. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Amdts Adopted 20 Com. Reg. 16272 (Oct. 15, 1998); Amdts Proposed 19 Com. Reg. 15718 (Oct. 15, 1997); Amdts Proposed 17 Com. Reg. 13807 (Nov. 15, 1995); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994). § 25-10-1755 Multiple Properties In the event of multiple real properties being noticed for sale, either the Executive Director or Loan Manager shall apportion the minimum bid for any sale of property in a manner so as to maximize the likelihood of sale and to maximize the possibility of recovery of all amounts owed DCD. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Amdts Adopted 20 Com. Reg. 16272 (Oct. 15, 1998); Amdts Proposed 19 Com. Reg. 15718 (Oct. 15, 1997); Amdts Proposed 17 Com. Reg. 13807 (Nov. 15, 1995); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994). Commission Comment: The 2005 amendments deleted former § 25-10-1750, entitled “Section Auction” and § 25-10-1755, entitled “Third Auction.” For the history of these sections, see 24 Com. Reg. 19377 (June 17, 2002); 24 Com. Reg. 18813 (Jan. 29, 2002); 16 Com. Reg. 12319 (Aug. 15, 1994); 16 Com. Reg. 11843 (May 15, 1994). § 25-10-1760 Certificate of Sale If the property is sold at an auction, CDA Legal Counsel shall prepare a Certificate of Sale and shall deliver a copy to the buyer after recording the original. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, © 2022 by The Commonwealth Law Revision Commission (July 28, 2022) Page 51 of 66

TITLE 25: COMMONWEALTH DEVELOPMENT AUTHORITY 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994). § 25-10-1765 Deed After the one year redemption period, if the borrower has not redeemed the property, CDA Legal Counsel shall prepare a Deed to be executed in accordance with the Commonwealth’s Mortgage Foreclosure Act and to be delivered to the buyer after filing. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994). § 25-10-1770 Controlling Authority If any of the above procedures conflict with any applicable provision of law or any term in any of the Loan documents, then said law or contractual term shall control. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002). Commission Comment: The 2005 amendments deleted former § 25-10-1775, entitled “Loan Workouts.” For the history of this section, see 24 Com. Reg. 19377 (June 17, 2002); 24 Com. Reg. 18813 (Jan. 29, 2002); 16 Com. Reg. 12319 (Aug. 15, 1994); 16 Com. Reg. 11843 (May 15, 1994). § 25-10-1775 Loan Revisions A Loan being foreclosed or in financial difficulty may only be revised in accordance with Part 1600. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005). § 25-10-1780 Settlement All CDA obtained judgments are subject to settlement at the discretion of the Board of Directors, subject to the mutual agreement of the parties and a determination by the Board of Directors that such a settlement is reasonable and in the best interest of DCD and CDA. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005). § 25-10-1785 Attorneys Fees © 2022 by The Commonwealth Law Revision Commission (July 28, 2022) Page 52 of 66

TITLE 25: COMMONWEALTH DEVELOPMENT AUTHORITY In accordance with all executed Loan documents, a borrower shall be responsible for, and his or her account shall be charged with, all reasonable expenses and legal fees incurred by DCD in the collection, foreclosure and monitoring of his or her Loan. Any payments toward a Loan to which fees and expenses have been charged shall first be applied against those outstanding fees, expenses and other charges, then against any accrued interest and finally against the outstanding principal amount. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005). Commission Comment: [Historical comments removed.] § 25-10-1790 Seizure of Chattel & Accounts At CDA’s option, if any payment is not received by the thirtieth (30th) day after its due date, then the Loan Manager, or his or her designee, may at any time after the thirtieth (30th) day, seize, secure and/or sell, in accordance with the chattel mortgage, security agreements or applicable law, any and all mortgaged chattels or other movable security or accounts including, but not limited to, automobiles, boats, furniture, fixtures, merchandise, machinery, inventory, equipment, appliances, bank accounts, accounts receivable and supplies. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Adopted 36 Com. Reg. 34696 (Feb. 24, 2014); Proposed 35 Com. Reg. 34318 (Sept. 28, 2013). Commission Comment: [Historical comments removed.] § 25-10-1795 Non-Collectible Debt (a) The CDA Management shall take all reasonable steps to attempt to see that debts owed to it are satisfied prior to determining whether or not a particular debt should be classified as non-collectible. At a minimum, these steps should include (in no particular order): (1) The CDA Management should conduct foreclosure sales on any and all property mortgaged to satisfy the debt. (2) The CDA Management, in consultation with its attorneys, should seek an Order in Aid of Judgment to determine the most reasonable means by which to seek full satisfaction of the debt. (3) The CDA Management should conduct a thorough and complete asset search to determine whether or not the debtor owns any property (not mortgaged to secure the debt) that can legally be utilized to satisfy the debt. Such asset searches should include, but not be limited to: (i) A thorough grantor/grantee search of recorded documents with the CNMI Recorder’s Office to determine what, if any, interests in non-mortgaged real property are owned by the debtor; © 2022 by The Commonwealth Law Revision Commission (July 28, 2022) Page 53 of 66

TITLE 25: COMMONWEALTH DEVELOPMENT AUTHORITY (ii) Employment of an asset search specialist, or the utilization of CDA personnel, to determine what, if any, interests in non-mortgaged personal property are owned by the debtor; (iii) Any and all other reasonable steps the CDA Management may take to determine what property the debtor owns that is subject to collection within the CNMI and/or Guam, and as applicable in other jurisdictions; and (iv) Any and all other reasonable steps the CDA Management deems fit, in its discretion, under each individual circumstance. (4) The CDA Management should, once a determination is made that the debtor owns an interest in real or personal property sufficient value to justify collection efforts, work in consultation with its attorneys to take any and all legal steps to utilize said property to satisfy the debt. (5) The CDA Management should attempt, when reasonable, to implement a payment plan with debtors when any deficiency on an account remains after efforts to satisfy the debt through the collection and sale of a debtor’s property. CDA shall develop a standard operating procedure by which it will assess a debtor’s financial ability to participate meaningfully in a payment plan. (b) If, after all reasonable efforts to satisfy the debt (including those specific steps mentioned above) have been exhausted, and the debt in question remains unpaid, the CDA Management is hereby directed to determine (by applying GAAP and its best judgment) whether the remaining debt should be declared non-collectible. When such a determination has been made, the CDA Management will present its recommendation for classification as non-collectible to this Board at the earliest practicable meeting, at which this Board shall consider the CDA Management’s recommendation to declare the debt non-collectible. Should such a declaration be made, CDA may refer the remainder of the non-collectible debt to an appropriate collections attorney or collection agency and reflect that such debt is non-collectible in all future financial records and statements. Modified, 1 CMC § 3806(a), (f). History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Adopted 41 Com. Reg. 42808 (Sept. 28, 2019); Proposed 41 Com. Reg. 42713 (July 28, 2019). Part 1800 - Funds and Accounting § 25-10-1801 Accounting Records and Reports The Executive Director shall ensure at all times that accounting records and supporting documents are maintained to insure sound internal control. DCD shall use the accrual method of accounting. Monthly financial statements with detailed loan fund status reports must be prepared in accordance with Generally Accepted Accounting Principles and Practices (GAAPP) and copies thereof shall be provided to the Board of Directors. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); © 2022 by The Commonwealth Law Revision Commission (July 28, 2022) Page 54 of 66

TITLE 25: COMMONWEALTH DEVELOPMENT AUTHORITY Proposed 16 Com. Reg. 11843 (May 15, 1994); Adopted 7 Com. Reg. 3585 (May 21, 1985); Proposed 7 Com. Reg. 3468 (Mar. 15, 1985); Proposed 3 Com. Reg. 1400 (Nov. 30, 1981). § 25-10-1805 Accounting System A separate accounting system shall be used and maintained for the functions of DCD including its economic development loan fund activities. The accounts and statements of account of DCD shall be audited by the Public Auditor or an independent auditor approved by the Public Auditor. The fiscal year of DCD shall be identical with that of the Commonwealth Government. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994); Adopted 7 Com. Reg. 3585 (May 21, 1985); Proposed 7 Com. Reg. 3468 (Mar. 15, 1985); Proposed 3 Com. Reg. 1400 (Nov. 30, 1981). § 25-10-1810 Liquid Funds DCD shall maintain sufficient liquid assets to be able to meet normal operating expenses and discharge its short-term liabilities and current maturities of any long-term indebtedness. DCD funds not currently needed in liquidity shall be reinvested by the Board of Directors, to the extent permitted by law, in qualified investments which mature not later than the date on which such funds will be needed. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994); Adopted 7 Com. Reg. 3585 (May 21, 1985); Proposed 7 Com. Reg. 3468 (Mar. 15, 1985); Proposed 3 Com. Reg. 1400 (Nov. 30, 1981). § 25-10-1815 Accounts DCD may, as it deems necessary, open and maintain savings and checking accounts and other investment forms with banks or savings and loan associations which are reputable financial firms and members of the Federal Reserve System or the Federal Deposit Insurance Corporation (FDIC). Money received by DCD shall be deposited into such accounts. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994); Adopted 7 Com. Reg. 3585 (May 21, 1985); Proposed 7 Com. Reg. 3468 (Mar. 15, 1985); Proposed 3 Com. Reg. 1400 (Nov. 30, 1981). § 25-10-1820 Collections © 2022 by The Commonwealth Law Revision Commission (July 28, 2022) Page 55 of 66

TITLE 25: COMMONWEALTH DEVELOPMENT AUTHORITY (a) DCD shall cause to be collected and obtained: (1) From the Development Banking Division of CDA, all 702(c) Covenant funds, any appropriated or budgetary funds, and all assets of the EDLF existing prior to September 19, 1985; (2) All money to be received by or on behalf of DCD, with respect to repayment of any Loan made, including interest and other charges payable; (3) All money arising from property or investments acquired by or invested in by DCD; and (4) All other money and property due and payable to DCD. (b) DCD shall not accept and hold deposits, but may hold evidence of deposits, or otherwise accept control of deposits, in other financial institutions. Modified, 1 CMC § 3806(a), (f). History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994); Adopted 7 Com. Reg. 3585 (May 21, 1985); Proposed 7 Com. Reg. 3468 (Mar. 15, 1985); Proposed 3 Com. Reg. 1400 (Nov. 30, 1981). Commission Comment: The original paragraphs were not designated. The Commission designated subsections (a) and (b). § 25-10-1825 Loan and Investment Amounts The Board of Directors shall pay out of DCD funds: (a) Approved Loan or Loan Guaranty amounts; and (b) Amounts approved for investment or equity participation, and participation in any projects and/or feasibility studies or technical assistance. Modified, 1 CMC § 3806(f). History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994); Adopted 7 Com. Reg. 3585 (May 21, 1985); Proposed 7 Com. Reg. 3468 (Mar. 15, 1985); Proposed 3 Com. Reg. 1400 (Nov. 30, 1981). Commission Comment: [Historical comments removed.] § 25-10-1830 Operation Expenses The Board of Directors shall pay out of funds available to the DCD pursuant to 4 CMC § 10401(b)(1) and (b)(3) all expenses, costs and obligations incurred for the administration and operation of the DCD. Payment under this section shall be in conformity with the © 2022 by The Commonwealth Law Revision Commission (July 28, 2022) Page 56 of 66

TITLE 25: COMMONWEALTH DEVELOPMENT AUTHORITY operating budget, prepared and submitted to the CDA Board of Directors. See § 25-10- 215. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994); Adopted 7 Com. Reg. 3585 (May 21, 1985); Proposed 7 Com. Reg. 3468 (Mar. 15, 1985); Proposed 3 Com. Reg. 1400 (Nov. 30, 1981). § 25-10-1835 Technical Assistance and Studies The Board of Directors shall also pay out of funds available to DCD pursuant to 4 CMC § 10401(b)(1) and (b)(3) all amounts expended or obligated for technical assistance, economic studies, project evaluations and feasibility studies. Payment under this section shall also be in conformity with the operating budget, prepared and submitted to the CDA Board of Directors. See § 25-10-215. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994). Commission Comment: [Historical comments removed.] § 25-10-1840 Interest Tracking and Booking DCD shall track accrued and unpaid interest for one hundred twenty (120) days, after which such interest shall continue to accrue but shall be booked (together with the underlying Loan) as non-performing and shall be isolated from amounts/funds able to be used for payment of CDA administrative and operating expenses. Modified, 1 CMC § 3806(e). History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005). Part 1900 - Investigations and Audits § 25-10-1901 Investigations and Audits The Board of Directors or the Executive Director may instruct a representative of DCD, or may contract with a qualified firm or person, to investigate or audit the accounts of any borrower in order to ascertain: (a) Whether the Loan has been used for the purpose for which it was granted; © 2022 by The Commonwealth Law Revision Commission (July 28, 2022) Page 57 of 66

TITLE 25: COMMONWEALTH DEVELOPMENT AUTHORITY (b) Whether there is evidence or indication of future difficulties arising that might prevent the borrower from repaying the Loan in accordance with the Loan agreement; or (c) Whether management or other assistance is needed to improve the business operation. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994); Adopted 7 Com. Reg. 3585 (May 21, 1985); Proposed 7 Com. Reg. 3468 (Mar. 15, 1985); Proposed 3 Com. Reg. 1400 (Nov. 30, 1981). Commission Comment: The 2005 amendments moved this part from former part 1600. § 25-10-1905 Associated Fees for Costs The Board of Directors may impose reasonable fees upon the borrower for performing the above services in order to recover its costs incurred. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994). Part 2000 - Conflicts and Confidentiality § 25-10-2001 Conflicts of Interest As a mandated division of CDA, DCD follows and abides by the same conflicts of interest law and standards as CDA. The applicable conflicts of interest law and standards are set forth in 4 CMC § 10408. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002). § 25-10-2005 Confidentiality No member of the Board of Directors or DCD employee or officer who becomes privy to any confidential information, data figures, projections, estimates, customer lists, tax records, personnel history, accounting procedures, promotions and information otherwise privileged as a result of his or her membership shall reveal such information to any person, firm, corporation, or other entity outside the course of his or her official duties; nor shall he or she use such information for his or her own personal gain. Nothing in this section shall prevent DCD from using and disclosing such information as is necessary to administer its Loans or collect amounts outstanding from the Loan Applicant or borrower. © 2022 by The Commonwealth Law Revision Commission (July 28, 2022) Page 58 of 66

TITLE 25: COMMONWEALTH DEVELOPMENT AUTHORITY History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994); Adopted 7 Com. Reg. 3585 (May 21, 1985); Proposed 7 Com. Reg. 3468 (Mar. 15, 1985); Proposed 3 Com. Reg. 1400 (Nov. 30, 1981). Commission Comment: [Historical comments removed.] § 25-10-2010 Preparation of Loan Applications No DCD employee, officer or member shall engage in the preparation of any Loan application; provided, however, that the Loan Department staff may assist a Loan Applicant in the preparation of a Loan application within the DCD office without compensation. If the staff assists the Loan Applicant, the Loan Applicant shall first waive any legal claims against the staff, DCD and CDA for any wrongful performance or alleged misrepresentation on the Loan application. History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994); Adopted 7 Com. Reg. 3585 (May 21, 1985); Proposed 7 Com. Reg. 3468 (Mar. 15, 1985); Proposed 3 Com. Reg. 1400 (Nov. 30, 1981). Commission Comment: [Historical comments removed.] Part 2100 - Violations of Rules and Regulations § 25-10-2101 Known Violations Known violations or possible violations of any provision contained in these Rules and Regulations [this chapter] shall immediately be reported to the Executive Director or other person designated for that purpose. The violation or possible violation shall then be promptly reported to the Board of Directors by the Executive Director. Modified, 1 CMC § 3806(d). History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994). § 25-10-2105 Discovered Violations If any DCD employee or member discovers irregularities in the use and enforcement of these Rules and Regulations [this chapter], or has reasonable grounds to believe that these Rules and Regulations [this chapter] may have been violated, the employee or member © 2022 by The Commonwealth Law Revision Commission (July 28, 2022) Page 59 of 66

TITLE 25: COMMONWEALTH DEVELOPMENT AUTHORITY shall report the matter to the Executive Director who shall furnish the Board of Directors with the information he or she has obtained. Modified, 1 CMC § 3806(d). History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994). § 25-10-2110 Additional Information It is the responsibility of the Executive Director, together with the Chairman, to review the information submitted, and request additional information necessary to make a determination as to whether there is substantial evidence of violation of these Rules and Regulations [this chapter] or whether further investigation should be undertaken. Modified, 1 CMC § 3806(d). History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994). § 25-10-2115 Penalties If it is determined by the majority of the Board of Directors that an individual has violated any of the provisions of these Rules and Regulations [this chapter], he or she shall be subject to the penalties provided by law, and to such additional disciplinary and other remedial action including, among others, dismissal, suspension, or reduction in job position, as is appropriate. Modified, 1 CMC § 3806(d). History: Amdts Adopted 42 Com. Reg. 43954 (Aug. 28, 2020); Amdts Proposed 42 Com. Reg. 43649 (June 28, 2020); Amdts Adopted 27 Com. Reg. 24733 (Aug. 22, 2005) (superseding all previous rules and regulations); Amdts Proposed 27 Com. Reg. 24548 (June 20, 2005); Adopted 24 Com. Reg. 19377 (June 17, 2002); Proposed 24 Com. Reg. 18813 (Jan. 29, 2002); Adopted 16 Com. Reg. 12319 (Aug. 15, 1994); Proposed 16 Com. Reg. 11843 (May 15, 1994). Part 2200 - Board of Directors’ By-laws Commission Comment: This part contains regulations that may conflict with regulations codified at Part 100 and Part 300. The Notice of Proposed Amendments and Notice of Adoption for this part did not repeal Parts 100 or 300. To the extent that these regulations conflict with Parts 100 or 300, the regulations in Parts 100 and 300 may be superseded. See the Commission Comment to § 25-10-2265 for information regarding the accuracy of this part. © 2022 by The Commonwealth Law Revision Commission (July 28, 2022) Page 60 of 66

TITLE 25: COMMONWEALTH DEVELOPMENT AUTHORITY § 25-10-2201 Introduction We, the undersigned Members of the Board of Directors of the Commonwealth Development Authority, for the purpose of ensuring and facilitating the orderly conduct of the meetings of the Board, do hereby adopt these by-laws as the By-Laws of the Board of Directors of the Commonwealth Development Authority. History: Adopted 36 Com. Reg. 34698 (Feb. 28, 2014); Proposed 35 Com. Reg. 34329 (Sept. 28, 2013). Commission Comment: This section was an introductory paragraph to the by-laws in the original regulation. The Commission codified it at this section pursuant to 1 CMC § 3806(a). § 25-10-2205 Name of Organization The name of this organization is the Board of Directors of the Commonwealth Development Authority (hereinafter the “Board”). History: Adopted 36 Com. Reg. 34698 (Feb. 28, 2014); Proposed 35 Com. Reg. 34329 (Sept. 28, 2013). § 25-10-2210 Principal Office The Board shall have as its principal office, and meeting place, the principal office of the Commonwealth Development Authority (the “Authority”) located in Saipan, and may establish such other offices or branches elsewhere in the Commonwealth of the Northern Mariana Islands as the Board deems necessary. The principal office is Beach Road, San Jose Village, Saipan, MP 96950. History: Adopted 36 Com. Reg. 34698 (Feb. 28, 2014); Proposed 35 Com. Reg. 34329 (Sept. 28, 2013). § 25-10-2215 Enabling Legislation The Commonwealth Development Authority is established and created pursuant to 4 CMC § 10101, et seq., as amended. History: Adopted 36 Com. Reg. 34698 (Feb. 28, 2014); Proposed 35 Com. Reg. 34329 (Sept. 28, 2013). § 25-10-2220 Composition of the Board (a) The affairs of the Authority shall be governed and controlled by the Board, which shall consist of seven members. Members of the Board are appointed by the Governor with the advice and consent of the Senate. Members of the Board shall serve staggered terms of four years. Appointment to fill vacancies shall be for the remainder of the unexpired term. (b) The Board membership shall consist of U.S. citizens or U.S. nationals as defined in Section 8 of the Schedule on Transitional Matters of the Constitution who have at least one year continuous residency in the Commonwealth and who are domiciles of the Commonwealth as defined in Section 1005(e) of the Covenant, with at least two members representing Rota and at least two members representing Tinian. Board members shall be © 2022 by The Commonwealth Law Revision Commission (July 28, 2022) Page 61 of 66

TITLE 25: COMMONWEALTH DEVELOPMENT AUTHORITY individuals with knowledge and experience in business, finance, banking, or other economic affairs and may include the Public Auditor. History: Adopted 36 Com. Reg. 34698 (Feb. 28, 2014); Proposed 35 Com. Reg. 34329 (Sept. 28, 2013). Commission Comment: The Commission struck the figure “7” from subsection (a) pursuant to 1 CMC § 3806(e). The Commission inserted a comma after the word “banking” in subsection (b) pursuant to 1 CMC § 3806(g). § 25-10-2225 Meetings of the Board (a) All meetings of the Board shall be held in the Commonwealth and pursuant to Public Law 8-41; “the Open Government Act of 1992”, as amended. Members of the Board of Directors who are in the Commonwealth but unable to attend a meeting in person may appear by means of internet or online video conferencing, teleconferencing, or other electronic means of communication, pursuant to Public Law 22-05. (1) Members attending a meeting via internet or online video conferencing, teleconferencing, or other electronic means of communication must make sure that they are in a secure location when participating in an executive session portion of a meeting, pursuant to the Open Government Act. (2) Members who appear by means of internet or online video conferencing, teleconferencing, or other electronic means of communication shall be considered present for the purposes of a quorum. (b) Notice of Intent to Attend Remotely. Members who plan to attend a meeting of the Board of Directors by means of internet or online video conferencing, teleconferencing, or other electronic means of communication shall inform the Chairman of the Board and the Executive Assistant at least three (3) days prior to the meeting. Modified, 1 CMC § 3806(g). History: Adopted 44 Com. Reg. 48585 (June 28, 2022); Proposed 44 Com. Reg. 48537 (Apr. 28, 2022); Adopted 36 Com. Reg. 34698 (Feb. 28, 2014); Proposed 35 Com. Reg. 34329 (Sept. 28, 2013). § 25-10-2230 Members of the Board (a) Members of the Board. Members of the Board, constituting a quorum, shall elect a Chairperson and Vice-Chairperson, immediately upon their first meeting following Senate confirmation of all seven members. The Chairperson and Vice-Chairperson shall serve for a term of two years. At the end of every two year period, the Board shall elect its Chairperson and Vice-Chairperson. The Chairperson shall preside over the meetings of the Board. The election of said Chairperson and Vice-Chairperson will be conducted as the first order of business of the first scheduled meeting of the calendar year. (b) Secretary. The Board shall designate a Secretary to keep the minutes and records of the Board, who may or may not be a member of the Board. © 2022 by The Commonwealth Law Revision Commission (July 28, 2022) Page 62 of 66

TITLE 25: COMMONWEALTH DEVELOPMENT AUTHORITY (c) Resignation. An appointed member may at any time resign his or her office by notice in writing to the Governor. Upon resignation, removal, or expiration of the term of appointment, the member shall cease to sit on the Board, and shall not be included in a quorum count. (d) Removal and Vacancies of Board. (1) Removal of a Board member before the expiration of his or her term shall occur only by the Governor and on grounds of gross neglect or dereliction of duty, breach of fiduciary duty, conviction of a felony, or mental or physical incapacity. In the event that a Board member is removed from the Board or ceases to sit on the Board for any other reason, the Governor shall appoint a replacement, with the advice and consent of the Senate. Such a replacement member of the Board shall serve the remainder of the term of the member he or she replaces and must be confirmed by the Senate. (2) In the event the Chairperson or Vice-Chairperson is replaced, the Board will select a Chairperson or Vice-Chairperson from among its members pursuant to subsection (a). (f) The Chairperson shall preside at all meetings of the Board. He or she shall also have such powers and shall perform such duties as may from time to time be specified in resolutions or other directives of the Board. In the absence of such specifications, he or she shall have the powers and authority and shall perform and discharge the duties of a chairperson serving in public corporations having the same or similar general purposes and objectives as this public corporation. History: Adopted 36 Com. Reg. 34698 (Feb. 28, 2014); Proposed 35 Com. Reg. 34329 (Sept. 28, 2013). Commission Comment: The Commission inserted commas after the words “removal” in subsection (c) and “felony” in subsection (d)(1) pursuant to 1 CMC § 3806(g). The Commission substituted section numbers pursuant to 1 CMC § 3806(d). § 25-10-2235 Officers of the Authority (a) The Board shall appoint an Executive Director who shall be its Chief Executive Officer, and shall exercise the power and duties under the provision of 4 CMC § 10306(a). The Board shall also appoint a Comptroller and such other officers as the by-laws may require for the operation of the Authority. (b) The person appointed as Executive Director shall be knowledgeable, and have a minimum of five years professional experience, in banking procedures and activities, or in economic development and financial management, and shall possess a graduate degree in business administration, economics, engineering, accounting, or law from an accredited university or college. (c)(1) The Comptroller shall exercise the following functions: (i) keep the official books and accounts of the Authority; (ii) prepare an annual report of the financial condition of the Authority for the Executive Director and the Board; and (iii) perform such other functions as the Executive Director or the Board may require. © 2022 by The Commonwealth Law Revision Commission (July 28, 2022) Page 63 of 66

TITLE 25: COMMONWEALTH DEVELOPMENT AUTHORITY (2) The Comptroller shall hold at least a bachelor’s degree in accounting and five years experience in governmental or financial accounting. (d) The Executive Director and Comptroller shall be paid at salaries established pursuant to Public Law 19-71. (e) The Executive Director, Comptroller, and other officers of the Authority may be dismissed for cause by the affirmative vote of five Board members. Modified, 1 CMC § 3806(g). History: Adopted 44 Com. Reg. 48585 (June 28, 2022); Proposed 44 Com. Reg. 48406 (Apr. 28, 2022); Adopted 36 Com. Reg. 34698 (Feb. 28, 2014); Proposed 35 Com. Reg. 34329 (Sept. 28, 2013). § 25-10-2240 Procedures in Meetings (a) A quorum for meetings and transacting business shall be five voting members present and able to conduct a meeting. A vote of five members shall be required for all action taken by the Board. An abstention is not considered a vote. After a quorum is established and a meeting has convened, no member shall leave the meeting room without the permission of the Chairperson and permission may not be granted, except for good cause, if such departure will destroy the quorum. (b) Unless otherwise provided for in this division, all decisions of the Board shall be made by a majority of those members present and voting when a quorum is present. A member of the Board, who is unable to attend a particular meeting, may authorize in writing another Board member to cast the absent member’s vote upon any item of business previously noticed on the agenda for that meeting. Notice of such proxy designation must be given to the Chairperson no less than 24 hours before the meeting. A proxy authorization cannot be used to establish a quorum. (c) A motion to be put before the Board must be raised in definitive form either verbally or in writing by one of the members of the Board. The motion must thereupon be seconded by another member of the Board within a one-minute interval, or the proposed motion will fail at that juncture. Once a motion has been properly introduced and seconded, that motion shall then be stated by the Chairperson before debate. Debate shall continue until the Chairperson closes the debate and calls for a vote on the motion. Any motion may be withdrawn by the initiator at any time before it has been adopted. (d) A vote on a motion before the Board shall be either by voice, show of hands, roll call, or secret ballot. A secret ballot may be requested by any member of the Board on any vote on any motion provided, however, such request is supported by a majority of the members present. A vote by show of hands or roll call may be requested by any member of the Board which shall be entertained by the Chairperson upon such request. Any member may require for the record an indication of the outcome of the vote as to each individual member of the Board except in those instances where a secret ballot is requested whereupon only the ascertainment of the result of the vote will be recorded. © 2022 by The Commonwealth Law Revision Commission (July 28, 2022) Page 64 of 66

TITLE 25: COMMONWEALTH DEVELOPMENT AUTHORITY (e) Any motion that does not receive a majority affirmative vote is thereby rejected and cannot be re-introduced in its same form at the same meeting of the Board. (f) When a question is under debate, no motions shall be received except the following: To adjourn; for the previous question; to table the motion; to postpone indefinitely; to postpone to a certain time; to defer; to amend; or to recess. These motions shall have precedence in the order listed. (g) When an appeal is taken from a decision of the Chair, the member taking the appeal shall be allowed to state his reason for so doing. The question shall then be immediately put in the following form: “Shall the ruling of the Chair be sustained?” (h) A motion to adjourn shall always be in order, except when a vote is being taken on any question before the Board, or when a member has the floor, provided that there be some intervening business proposed and determined between two motions to adjourn. (i) Meetings of the Board shall be conducted according to this part. Should any procedural problem develop that is not specifically answered by this part, the Chairperson shall refer to the most current edition of “Robert’s Rules of Order” to assist in a determination of the appropriate procedure to follow. History: Adopted 36 Com. Reg. 34698 (Feb. 28, 2014); Proposed 35 Com. Reg. 34329 (Sept. 28, 2013). Commission Comment: The Commission inserted a comma after the word “call” in subsection (d) pursuant to 1 CMC § 3806(g). The Commission struck the figure “2” from subsection (h) pursuant to 1 CMC § 3806(e). The Commission substituted section numbers pursuant to 1 CMC § 3806(d). § 25-10-2245 Code of Ethics The members of the Board shall comply with the requirements of the Commonwealth Ethics Code pursuant to Public Law 8-11 [1 CMC §§ 8511 et seq.]. The members of the Board and the Executive Director shall file an annual statement of financial interest on or before May 1 of each year with the Office of the Public Auditor. History: Adopted 36 Com. Reg. 34698 (Feb. 28, 2014); Proposed 35 Com. Reg. 34329 (Sept. 28, 2013). Commission Comment: The Commission corrected the capitalization of the words “statement of financial interest” pursuant to 1 CMC § 3806(f). § 25-10-2250 Conflicts of Interest The members of the Board shall comply with the requirements of the Commonwealth Ethics Code pursuant to Public Law 8-11 [1 CMC §§ 8501 et seq.] and Section 16 of the Commonwealth Development Authority Act of 1984, NMI Public Law 4-49, as amended and as codified in 4 CMC § 10408. History: Adopted 36 Com. Reg. 34698 (Feb. 28, 2014); Proposed 35 Com. Reg. 34329 (Sept. 28, 2013). © 2022 by The Commonwealth Law Revision Commission (July 28, 2022) Page 65 of 66

TITLE 25: COMMONWEALTH DEVELOPMENT AUTHORITY § 25-10-2255 Confidentiality Agreement The Board shall adopt a confidentiality agreement to be executed by each member of the Board immediately after being officially sworn. The agreement shall comply with the privacy information requirements of Section 19 of the Commonwealth Development Authority Act of 1984, NMI Public Law 4-49, as amended and codified in 4 CMC § 10410. History: Adopted 36 Com. Reg. 34698 (Feb. 28, 2014); Proposed 35 Com. Reg. 34329 (Sept. 28, 2013). Commission Comment: The Commission corrected the capitalization of the words “confidentiality agreement” pursuant to 1 CMC § 3806(f). § 25-10-2260 Seal There shall be a seal for the Commonwealth Development Authority which seal shall be kept by the designated Secretary of the Board. History: Adopted 36 Com. Reg. 34698 (Feb. 28, 2014); Proposed 35 Com. Reg. 34329 (Sept. 28, 2013). § 25-10-2265 Adoption and Amendment of By-laws (a) These by-laws shall become effective when adopted by a majority of the members of the Board. (b) These by-laws, except those provisions existing pursuant to law or its amendment therefore, may be amended, altered, changed, added to or repealed by the affirmative vote of the majority of the membership of the Board, after due notice of said proposal in accordance with section 25-10-2225, above. History: Adopted 36 Com. Reg. 34698 (Feb. 28, 2014); Proposed 35 Com. Reg. 34329 (Sept. 28, 2013). Commission Comment: The Commission corrected the capitalization of the word “by-laws” in both subsections pursuant to 1 CMC § 3806(f). The Commission substituted section numbers pursuant to 1 CMC § 3806(d). Because subsection (b) purports to allow the Board to amend the by-laws without publishing a Notice of Proposed Regulation or Notice of Adoption in the Commonwealth Register, the Commission is unable to guarantee that the regulations contained in this part are currently in effect as the by-laws of the Board. © 2022 by The Commonwealth Law Revision Commission (July 28, 2022) Page 66 of 66

Source: CNMI Law Revision Commission

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