The following persons or entities are ineligible to receive financial assistance under the Rural Economic Development Finance Program:
  (1) A principal, executive officer, director, shareholder, member, or partner of a recipient, or any subsidiary, parent, affiliate or related entity or person of a recipient;
  (2) A member of the immediate family of a principal, executive officer, director, shareholder, member, or partner of a recipient;
  (3) A related interest of a principal, executive officer, director, shareholder, member, or partner of recipient;
  (4) A person if the investment would result in violation of Chapter 176 of the Texas Local Government Code;
  (5) A person (or any principal executive officer, director, shareholder, or member) who has been convicted of a felony;
  (6) A person (or any principal, executive officer, director, shareholder, or member) that has demonstrated a pattern or practice of defalcation of accounts or funds;
  (7) A person (or any principal executive officer, director, shareholder, or member) who has mis-certified its status as a minority and/or woman owned business enterprise;
  (8) A person (or any principal executive officer, director, shareholder, or member) who has been debarred from participating in other federal or state programs;
  (9) A person (or any principal executive officer, director, shareholder, or member) that has been convicted of, or subjected to a civil judgment for fraud;
  (10) A person (or any principal executive officer, director, shareholder, or member) who has been convicted of, or subjected to a civil judgment for, federal or state antitrust law violations;
  (11) A person (or any principal executive officer, director, shareholder, or member) who has been convicted of a criminal offense relating to embezzlement, theft, forgery, bribery, falsification, or destruction of records, making false statements, receiving stolen property, making false claims, obstruction of justice, or conspiracy to do the same;
  (12) A person (or any principal executive officer, director, shareholder, or member) who has been convicted of a criminal offense indicating a breach of trust, dishonesty or lack of integrity, or conspiracy to do the same;
  (13) A business engaged in speculative activities that develop profits from fluctuations in price rather than through normal course of trade, such as stock investments, commodities futures, and currency trading;
  (14) A business that earns more than half of its annual net revenue from lending activities unless the business is a Community Development Financial Institution;
  (15) A business engaged in pyramid sales, where a participant's primary incentive is based on the sales made by an ever-increasing number of participants, or a multi-level marketing organization or business;
  (16) A business engaged in activities that are prohibited by federal or Texas law; and
  (17) A business engaged in gambling enterprises, with the sole exception of a retail grocery or convenience store business that earns less than 33% of its annual net revenue from lottery sales.

Source Note: The provisions of this §28.87 adopted to be effective May 18, 2022, 47 TexReg 2856