Current through Register Vol. 49, No. 2, February
2024
Subtitle I.
Introductory provisions
Section 1501.1
Authority and
scope.
These rules and regulations have been promulgated and adopted by
the Arkansas Natural Resources Commission (the "Commission") pursuant to and as
authorized by Act 772 of 1997, (the "Act"), and as otherwise authorized under
the general laws of the State of Arkansas (the "State"). These rules and
regulations have been enacted for the purpose of implementing and administering
the powers, duties and responsibilities of the Commission as provided by the
Act, which provide generally for Commission approved loans with respect to
certain water systems.
Section
1501.2
Policy statement, interpretation, and application of
rules and regulations.
It is the duty and policy of the Commission to fully and
expeditiously implement and administer the objectives, purposes and intent of
the Safe Drinking Water Fund (the "Fund") authorized under the provisions of
the Act. The instant rules and regulations are accordingly adopted to assist in
the effectuation and implementation of this duty and policy.
Due to the very specialized nature and complexity of
administration of the fund, the rules, regulations, modes of procedure,
Commission policies and guidelines herein provided shall, in all instances, be
subject to and given a liberal, reasonable, fair and impartial construction,
interpretation and application to the end that the intent and purposes hereof
may be obtained in compliance with the laws of the State and the public
purposes sought to be served thereby.
Section 1501.3
Definitions.
Unless the context otherwise requires, the use of certain
capitalized words and terms herein which are not otherwise defined shall refer
to the meanings of such words and terms as provided in the
Act.
Subtitle II.
Procedure
Section
1502.1
General procedure.
The general procedure to be followed in the loan application,
review and consideration process shall be as follows:
A. All proposed Water System Projects
(hereinafter "Projects" or singular "Project") must be considered in order,
from the Comprehensive Project Priority List (the "CPPL") which is developed
and administered by the Arkansas Department of Health's Engineering Division.
The Executive Director may invite the governing body of each applicant to
submit a letter of intent accompanied by a Resolution, authorizing the same, as
a prerequisite for further consideration by the Commission.
B.
Pre-Application.
While not specifically required, all potential applicants are encouraged to
initially contact the Commission for purposes of making arrangements for
participating in a pre-application conference between Commission staff,
applicant (or representative), applicant's legal, financial and engineering
advisors and such other persons whose attendance and participation may be
deemed appropriate and beneficial. At the pre-application conference,
preliminary matters respecting the applicant, the proposed Project and the
application for loan may be generally discussed in an effort to familiarize all
concerned parties with the applicable Program and specific application
requirements and procedures.
C.
Water/Wastewater Advisory Committee. Prior to
submission of a formal application for a project, the applicant must comply
with the procedures established by the Water/Wastewater Advisory
Committee.
D.
Application. Applicant shall initiate application
review and consideration by submission to the Commission of an application. In
all instances, applications must be written in the form and must include
substantive content meeting the requirements of Subtitle III. If the applicant
is requesting Commission funds from other than the Fund, separate applications
must be made with respect to the other programs. However, every application for
funds under the Fund may be considered by the Commission at its discretion as a
request for loan under any other available programs.
E.
Preliminary
Review. Upon receipt of the application by the Commission, the
application shall be given preliminary review by Commission staff for an
initial determination of Project eligibility under the Fund requirements,
applicant eligibility and for completeness and accuracy of all required and
necessary information.
F.
Final Review. Subsequent to preliminary review and
based upon the determination of eligibility and adequacy of information
submitted, the application shall thereafter be reviewed by Commission staff for
recommendation to the Commission. In this endeavor, Commission staff shall
review and investigate the application for the purpose of determining Project
compliance with the approval criteria set forth in Subtitle IV of this title
and compliance with such other considerations and factors deemed relevant and
necessary for staff recommendation purposes. In addition, the history of the
applicant with respect to the achievement of objectives in previous Commission
grants, loans and leases may be examined. Where applicable, Commission staff
may contact State and federal government entities who have responsibilities
associated with the Project.
G.
Public Hearing. If the Executive Director determines
that a public hearing would be beneficial in considering an application, he may
schedule and conduct a hearing in the locality to be served by the Project
proposed in the application. The purpose of the public hearing is to obtain
written and/or oral statements expressing public views concerning the
applicant's request for a loan. Verbatim transcripts of such hearings will not
be made. Persons wishing to make extensive comments should provide a written
copy thereof to the Commission. The date, time and place of the public hearing
will be furnished to all concerned parties and will also be published in a
newspaper of statewide circulation for a reasonable amount of time. It is the
policy of the Commission that a "reasonable amount of time" shall normally mean
that the publication of the notice of public hearing shall be for two
consecutive weeks by two insertions seven days apart before the date of the
hearing.
H.
Commission
Review and Consideration. Upon completion of staff review, the
submitted application with staff recommendations, if any, shall be placed upon
the Commission's meeting agenda as promptly as practicable, and shall be
thereby submitted to the Commission for Commission review, consideration and
action.
Section 1502.2
Commission action.A. After
reviewing and considering the submitted application, the Commission may proceed
to take one of the following alternative forms of Commission action on the
application:
1. The Commission may approve the
loan application as submitted, in whole or in part, and thereby authorize such
further action as may be necessary to effectuate Project closing and/or the
disbursement of funds.
2. The
Commission may retain the application under advisement for further
consideration or continue the hearing on the same for later ruling and
disposition; and, the Commission may withhold ruling on the application pending
a further hearing and/or submission to the Commission of such further or
additional information as the Commission may require for application
consideration purposes.
3. The
Commission may reject and deny the application, in whole or in part.
4. The Commission may approve the loan
application, in whole or in part, contingent upon:
(a) the applicant taking certain
actions;
(b) the existence of
adequate and available money in the Fund; or
(c) the receipt and approval by Commission
staff of any outstanding and necessary material, information, documents,
verifications or other authorization.
5. The Commission may place an application on
a waiting list pending the availability of money in the Fund. Applications on
the waiting list will be given further consideration regarding approval or
denial when adequate funds become available.
6. The Commission will act on an application
based on the information contained therein, testimony given at the public
hearing, and the staff's recommendations.
7. Action will normally be taken by the
Commission within one calendar year of the time application for a loan is made.
Action may be delayed on certain applications for Projects dependent on other
financing sources.
8. The Executive
Director shall, within ten days, notify the applicant of the final action of
the Commission in accepting, modifying, or rejecting the application.
B. Upon approval and grant of an
application for a loan, the Commission may authorize Project loan closing and
the execution of all necessary closing documents and instruments by the
Chairman of the Commission or other designated Commission representative(s),
and may accordingly authorize and provide for disbursements and may authorize
such further or additional action as may be necessary to complete and implement
the approved transaction, including the imposition and collection of such fees
and charges as may be fixed by the Commission to be paid by an applicant with
respect to the Commission's assistance for a specific Project.
C. The Executive Director of the Commission
shall have the discretionary authority to extend the time granted by the
Commission to an applicant to comply with specific terms and conditions when,
in the Executive Director's judgment, substantial compliance has been achieved
by the applicant. Any such extension granted pursuant to this provision shall
not exceed ninety (90) days and shall be granted only after consultation with
the Commission chairman. Any extensions granted pursuant to this section shall
be reported to the Commission as a whole at its next regularly scheduled
meeting.
Subtitle
III.
Applications for loan
Section 1503.1
Application
content.
The Commission provides application forms for Safe Drinking Water
Fund Loans. All applications must be written and consistent with the
requirements stated under this Subtitle. Four copies of the application must be
submitted to the Commission.
Section
1503.2
Required information.
The following general information, where deemed by the Commission
to be applicable to the applicant and the Project under consideration will be
provided by managerial, technical and financial capability.
A.
Managerial
Capability.
1. Applicant's full,
true and correct legal name, office address, mailing address if different from
office address, telephone number and telecopy number, if available.
2. Authority of law under which applicant was
created and established and the independent legal authority, including
supporting documentary evidence as requested by the Commission, under which
application is made. Applicant must identify and describe the nature of its
legal identification as an Eligible Entity. (See Section
1507.1
).
3. Certified copy of the
ordinance, resolution or other specific authorizing instrument or action
reflecting applicant's authority for making application to the
Commission.
4. Name, address,
telephone number and telecopy number, if available, of Project
engineer.
5. Name, address,
telephone number and telecopy number, if available, of Project legal counsel
and, if applicable, name, address, telephone number and telecopy number, if
available, of financial consultant or assessor.
6. Anticipated Project timetable, including
anticipated dates for completion of plans and specifications, Arkansas Water
Plan compliance review, if required, Department of Health, Department of
Pollution Control and Ecology or other necessary approvals, expected award of
bids and Project construction commencement and completion dates.
7. Description of the nature and division of
all applicants' equitable interests in the Project if more than one Eligible
Entity will participate in the Project.
8. A statement reflecting the relevant
history or current status of applicant's efforts toward obtaining all necessary
and incidental rights and privileges needed for Project commencement,
completion and operation. This requirement includes, but is not limited to, all
necessary legal rights, including water rights, licenses, easements or permits,
whether existing under federal, state or local law or regulation, the relative
status of secured or outstanding contracting arrangements, and the status of
any incidental legal or governmental proceedings, including, but not limited
to, the need for environmental impact studies, if not already prepared, and any
future authorizations or approvals required by electors, residents, members
and/or the governing body of the applicant.
B.
Technical
Capability.1. A brief but
adequate description of the proposed Project for which application is made,
including but not limited to the following:
a.
Project location.
b. Nature of
Project.
2. Preliminary
Project plans and specifications as may be necessary to reflect general
engineering feasibility of the Project. A finding of financial, technical and
managerial capacity to accomplish the Project.
3. Anticipated total Project cost.
C.
Financial
Capability.
1. Total amount of
funds requested for Project loan from the Commission, including a statement of
the specific uses and purposes for which such funds are intended to be
applied.
2. Comprehensive statement
clearly demonstrating Project need and the degree and extent of local support
for the Project. Such statement must be in sufficient detail to support and
justify the Project and should describe all aspects of present local support
and approval for the Project. Applicant may include letters or statements of
support from any interested persons or agencies.
3. Listing of all financing institutions,
lenders or other funding sources, if any, participating in financing the
Project or other projects related to the Project, including, where applicable,
the following information:
(a) Statement by
each such participating entity reflecting the relative interest, support and
commitment of the participating lender or other funding source in and to the
Project.
(b) Statement reflecting
total Project cost allocation between lenders or other funding
sources.
(c) Statement and
description of all Project security or Project revenues already pledged or to
be pledged to other participating lenders or fund sources.
(d) Statement and description of other
projects, if any, related to the Project, and information satisfying the
requirements of Subsections above with respect to each such other related
project, if any.
4.
Nature and amount of security to be pledged to secure the applicant's repayment
obligations to the Commission for the loan requested. If real or personal
property, or any interest therein, other than or in addition to the project
itself is to be pledged by applicant to secure the applicant's repayment
obligations, applicant must submit a current statement of the nature and extent
of all outstanding liabilities or indebtedness against such property, if any.
If applicant is not the owner of such real or personal property to be pledged,
applicant must state and describe the nature and extent of applicant's legal or
equitable interest in such property and provide a statement setting forth who
or what entity owns such property including details of all outstanding
liabilities or indebtedness against such property.
5. A firm estimate of annual (or other
interval) revenues to be derived from the Project or other sources of revenue
available to be paid to the Commission for Project cost repayment, with
supporting detail and assumptions expressed, and such additional financial
information as may be necessary to evaluate general economic feasibility of the
Project, including the ability of the Project to generate sufficient revenues
to repay the Commission the cost of providing loan for the Project, together
with such fees and charges as may be imposed by the Commission.
6. A statement of the specific manner and
means and Project projected timetable within which applicant proposes to
finance the Project, considering all sources of financing, and the timetable to
commence making repayments to the Commission.
7. Information reflecting the availability to
applicant of reserve or contingency funds which could and, if necessary, would
be used to meet actual Project costs which exceed applicant's original total
estimated cost of the Project. Such information should include the nature,
source, amount and liquidity of such reserve or contingency fund and
applicant's commitment and ability to utilize such funds when and if necessary
for such purposes.
8. Certified
copy of applicant's previous three years annual audited financial statements,
if available, and a statement of applicant's financial condition, including a
current statement of all outstanding indebtedness of applicant or related
entities, including but not limited to all outstanding general obligation or
revenue debt which might affect applicant's overall financial condition. In
connection with such statement of indebtedness, applicant must list the
security given for all such indebtedness.
9. All applicants should submit future
capital improvement plans as they may relate to the proposed Project or the
applicant generally.
Section 1503.3
Additional information
for reservoir projects.
Where loan is sought in connection with an existing reservoir,
the following additional information must be submitted with the
application:
A. The application should
contain a description of all estimated firm annual yields and reservoir storage
capacities.
B. A statement
containing the purposes for which water will be stored or used and places of
use or potential use for such water.
C. A statement of the relative allocation of
reservoir costs to each reservoir purpose if for more than one
purpose.
D. A brief description of
existing or proposed improvements in the reservoir or reservoir area and a
description of all such improvements which may require relocation.
Section 1503.4
Supplemental
information.
The Commission reserves the right to require the applicant to
submit such further or additional Project information as may be deemed
necessary for Project review under the particular facts and circumstances of
any specific Project proposal.
Section
1503.5
Application verification and approval as to
legality.
All applications for loans shall contain the following statement
signed by the chief executive officer of the applicant: "To the best of my
knowledge, all statements of fact contained herein are true and correct as of
the date hereof." Additionally, each application shall, at the time of
submission, be approved as to legality by applicant's legal counsel. Such
opinion shall normally reflect the valid formation and existence of the
applicant, the due authority of the person(s) signing the application and the
legality of the means proposed to finance the Project. In addition, the
application shall be subject to approval by the Commission's legal counsel, if
deemed advisable.
Subtitle
IV.
Approval standards and
criteria
Section 1504.1
General approval standards and criteria.
In the review and consideration of applications for a loan, the
Commission shall give consideration to the following general and non-exclusive
criteria for application approval:
A.
Compliance With Laws. The applicant and proposed
Project must be found to be in compliance with all applicable and relevant
federal (See Appendix A), state and local laws and regulations (including the
Arkansas Water Plan, where applicable), and applicant must possess all
necessary and incidental legal rights and privileges necessary to Project
commencement and operation. The appropriate state agencies must have had
adequate opportunity to review and comment on the proposed Project.
B.
Eligibility. The
applicant and proposed Project must be determined to be eligible for a loan
from the Fund as follows:
1. Projects
generally considered eligible include but are not limited to the following:
a. needed for compliance and public health
(except monitoring, operation and maintenance expenditures).
b. to replace aging infrastructure if needed
to maintain compliance or further public health protection goals.
c. to consolidate water supplies.
d. for land if integral to the project and
needed to meet or maintain compliance and further public health
protection.
e. planning and design
of a project.
f. restructuring
systems that are in noncompliance or that lack the technical, managerial and
financial capacity to maintain the system. (Only if the loan will ensure
compliance or if the owner or operator agrees to undertake appropriate changes
in operations).
2. Loans
cannot be made for:
a. Dams, or rehabilitation
of dams.
b. Water rights, except if
the water rights are owned by a system that is being purchased through
consolidation as part of a capacity development strategy.
c. Reservoirs, except for finished water
reservoirs and those reservoirs that are part of the treatment process and are
located on the property where the treatment facility is located;
d. Laboratory fees for monitoring.
e. Operation and maintenance
expenses.
f. Projects needed mainly
for fire protection.
g. Projects
for systems that lack adequate technical, managerial and financial capability,
unless assistance will ensure compliance.
h. Projects for systems in significant
noncompliance, unless funding will ensure compliance.
i. Projects primarily intended to serve
future growth.
C.
Availability of or Combination
with Other Assistance. The Commission shall consider the
feasibility and availability of alternative or additional sources of revenue
which could be obtained and utilized by applicant for Project financing either
apart from or in conjunction with Commission loan.
D.
Priority and availability of
funds. The Commission must give maximum priority to those projects
needed for Safe Drinking Water Act (SDWA) compliance, that provide the greatest
protection to public health, and those which assist systems most in need on a
per household basis. Projects will be considered in the order established by
the Arkansas Department of Health in the CPPL. If a project is determined to be
eligible, it will then be prioritized for funding. The Commission may bypass a
project under any of the following conditions:
1. The applicant lacks fiscal
capacity.
2. It is not ready to
proceed.
3. It is not an Eligible
Entity.
4. The applicant has not
submitted a Letter of Intent with a supporting Resolution.
5. The applicant has not entered into a
Memorandum of Agreement with the Commission.
6. The applicant has requested that it be
withdrawn from further consideration for funding.
7. Other conditions established by the
Executive Director in the annual Intended Use Plan ("IUP").
The Commission may waive any of the above conditions except the
first on a case-by-case basis. However, each of these waivers may become a
special condition of a resulting loan.
Section 1504.2
Length of loans.
A. For applicants with median household
incomes (as determined by the U.S. Census Bureau) greater than the State
average median household income, the maximum length of loan will be twenty (20)
years or the life of the Project, whichever is less.
B. For applicants with median household
incomes less than or equal to the State median household income, the maximum
length of loan will be thirty (30) years or the life of the Project, whichever
is less.
Section 1504.3
Criteria applicable to establishment of other terms and conditions for
loans.
In establishing the debt service reserve fund, depreciation
reserve fund or other terms and conditions, the Commission may consider the
following:
A. Health, Safety,
Environmental and other special needs;
B. Overall financial burden on
applicant;
C. Type of system and
system's operation and maintenance costs;
D. Applicant's legal, organizational,
management and financial history;
E. Type of dedicated revenue(s) to be used
for repayment;
F. Debt service
coverage from dedicated revenues;
G. History of revenue collections and past
due accounts; and
H. Other
criteria, as applicable.
Section
1504.4
Criteria applicability.
The general criteria set forth in this subtitle are intended to
constitute and shall constitute general guidelines and standards for
application review and consideration by the Commission. Such criteria shall not
be deemed appropriate for strict application or interpretation, nor shall such
criteria be deemed exclusive. In all instances, each individual application and
Project must be reviewed and considered on its own individual merits. The
criteria and standards set forth above shall accordingly be interpreted and
applied so as to allow sufficient flexibility in the ultimate exercise of the
Commission's judgment and discretion.
Subtitle V.
Disbursement of
funds
Section 1505.1
Conditions for disbursements.A.
After an application for a loan has been approved by the Commission, the
following conditions and requirements shall be met prior to the release and
disbursement of any assistance funds:
1.
Unless otherwise provided and approved by the Executive Director, applicant
must submit to the Commission all plans, specifications and engineering reports
for the Project, all of which shall be complete and in sufficient detail as
would be required for submission of the Project to a contractor for bidding or
contracting the Project.
2.
Applicant, Commission and all other necessary parties, shall have executed all
instruments and documents, in form and content acceptable to the Commission,
necessary for closing including, but not limited to a Memorandum of Agreement
("MOA"), loan documents, ordinances or resolutions, construction contracts,
closing certificates, legal opinions, corresponding pledges of Project security
and revenues where appropriate and all other relevant documents (herein
collectively referred to as "Project Documents"). Closing procedures and
schedule shall conform to the requirements of the Commission, including without
limitation, execution and delivery of the specific Project Documents, with such
insertions, corrections, modifications or amendments as may be approved by the
Commission in a specific instance.
3. If not previously provided, applicant
shall provide the Commission with written and verified statements setting
forth:
(a) Information reflecting the
reasonable availability of and/or a commitment from all other revenue or
funding sources needed to finance and complete the Project; and
(b) A timetable for transfer of funds from
Commission to Applicant.
4. Applicant shall have complied with all
other applicable requirements of Title .
B. At the time of and upon compliance with
the above requirements, the Commission may release, advance and disburse loan
funds to the applicant for the approved Project.
Section 1505.2
Increases in
loan.
With respect to approved applications from the Fund, the
Executive Director shall have the discretionary authority to increase the
amount of the loan to the applicant by the greater of ten percent (10%) of the
approved obligation amount or $25,000 without returning to the Commission for
approval. Such increase in the loan shall be granted only after consultation
with the Commission chairman. Any loan increases pursuant to this section shall
be reported to the Commission as a whole at the next regularly scheduled
Commission meeting.
Section
1505.3
Debobligation.
A. The Executive Director shall have the
discretionary authority to deobligate funds approved by the Commission for the
loan to an applicant without returning to the Commission for its approval in
the following cases:
1. The Loan was approved
by the Commission in an amount in excess of that needed for completion of a
Project.
2. An applicant requests
that funds be deobligated.
3. In
the judgment of the Executive Director an applicant has failed to comply with
the requirements of these rules and regulations.
B. Deobligation, except if made under
Subsection 1. above, shall be made only after consultation with and concurrence
of the Commission chairman. Any deobligations pursuant to this section shall be
reported to the Commission as a whole at the next regularly scheduled
Commission meeting.
Subtitle VI.
Miscellaneous
provisions
Section 1506.1
Inspection of works, technical, and financial records.
By making application to the Commission, the applicant will be
deemed to consent and agree to the following:
A.
Facility
Inspection. From time of application throughout construction and
at all times while any assistance from the Commission to the applicant is
outstanding, the Commission shall have the right to inspect any and all of the
Project(s) and all incidental works, areas, facilities and premises otherwise
pertaining thereto.
B.
Record Inspection. From time of application throughout
construction and at all times while any loan from the Commission to the
applicant is outstanding, the Commission shall at all reasonable times have the
right to inspect, review, or copy all contracts, documents, records or other
information related to the application, the Project(s) and the operation of the
applicant's system, including financial records possessed by the applicant or
its contractors, agents, employees or representatives.
C.
Audits. From time
of application throughout construction and at all times while any loan from the
Commission to the applicant is outstanding, the applicant shall, unless
otherwise agreed to by the Executive Director, provide the following:
1. Construction Audit. Upon completion of the
Project, the applicant shall provide an audit by an independent certified
public accountant of the expenditure of construction funds, including all funds
provided by the Commission.
2.
Annual Audit. The applicant shall furnish to the Commission annually, within
ninety (90) days after close of applicant's fiscal year, audited financial
statements prepared by an independent certified public accountant, accompanied
by such accountant's report thereon, reflecting the financial condition of
applicant at the end of such fiscal year, the results of operations and changes
in fund balances with respect to applicant, applicant's compliance with the
terms and conditions of the loan documents and this Title of the Commission's
Rules, and other management or financial criteria established by the Executive
Director.
D.
Compliance with Federal/State Requirements. As long as
the applicant has an outstanding from the Fund, the applicant will comply with
all State and federal requirements applicable to the Fund.
Section 1506.2
Project
modifications.A. After an application
for a loan has been approved by the Commission and after the Executive Director
has reviewed and approved an applicant's plans and specifications for the
Project, no change, modification, amendments, or departure otherwise to or from
the approved plans and specifications which would materially or significantly
affect total Project cost, estimated revenues, or design shall be made, allowed
or authorized without the prior written approval thereof by the Executive
Director.
B. During the period of
construction, all material changes of any nature, delays in construction, and
changes in contract times must be reported to the Commission.
Section 1506.3
Records
public.
All records of the Commission relating to the Funds contemplated
within these rules and regulations shall be public records available for public
inspection by any interested person at reasonable times and in a reasonable
manner.
Section 1506.4
Administrative fees, loan rates, and terms for Safe Drinking Water Fund
loans.A. Applicants receiving a loan
from the Fund shall pay to the Commission an administrative fee of three
percent (3%) of the amount of the loan received.
B. A loan servicing fee rate will be charged
to the borrowers loan repayments. The servicing fee rate is part of the
borrowers combined loan rate. The servicing fee rate and the combined loan rate
will be set upon the Project's obligation by the Commission.
C. Loans from the Fund shall be repaid in
full at an interest rate up to the maximum allowed under Article 19, Section
13 of the Constitution of the State of Arkansas,
as amended by Amendment 60.
Section
1506.5
Sanctions.
The Commission may, upon written recommendation of the Executive
Director, penalize applicants who voluntarily withdraw its application from the
Fund subsequent to Commission review and approval of an application, or
otherwise fail to demonstrate good faith in dealing with the Commission and its
staff. Sanctions may include a prohibition from participation in any Commission
Loan Programs for a period of up to two years.
Section 1506.6
Project completion,
inspection, and audit.
Upon completion of any Project for which a loan has been
provided, the applicant or its engineer shall furnish to the Commission written
notification of completion. Upon receipt of such notification, or upon Project
completion should notification not be furnished as required herein, the
Commission may conduct a final on-site inspection of the Project and an audit
of any and all loan funds furnished to the applicant may be required as
contained in Section
1506.1
above.
Section 1506.7
Return of funds to Commission.
A. Loan funds made available to an applicant
by the Commission shall be utilized and expended by the applicant solely and
exclusively for the payment of authorized and allowable costs and expenses of
the Project for which assistance was approved. Any remaining funds shall be
promptly returned to the Commission upon request.
B. In the event funds furnished to an
applicant by the Commission are not utilized and expended by the applicant for
the specific Project for which such funds were furnished within a reasonable
period of time after disbursement to the applicant, or in the event the
Commission determines, at any time, that funds furnished were utilized and
expended for any unauthorized or unallowable purpose, the applicant shall upon
demand return or otherwise pay or reimburse to the Commission any and all such
unused funds or any amounts of funds used and expended for unauthorized or
unallowable purposes.
Section
1506.8
Late payments.
As provided in all loan agreements entered into with respect to a
loan from the Fund, there is a seven day grace period for lease or loan
payments due. After the expiration of the grace period, interest at the rate
stated in the Project documents will be charged on the amount due from the due
date until the date payment is received.
Section 1506.9
Conveyance of ownership/
release of secured interest to eligible entity when project cost repaid.
Upon repayment to the Commission of all Project costs and/or such
other payments, fees and charges as may be required to be paid to the
Commission pursuant to the Project agreements in full satisfaction of the
applicant's obligations, the Commission will convey/release any
ownership/secured interest it has in the Project or cause such interest/release
to be conveyed to the proper applicant, or if applicable, to a group of
applicants as their interests may appear, and the Commission shall return
control over the operation and maintenance of the Project to the applicant or
applicants, as the case may be.
Section
1506.10
Debt service fund, when required.
A. A Debt Service Reserve Fund, when required
to be funded by the Commission, will be a restricted account, established and
maintained by a third party trustee or the applicant, as approved by the
Executive Director. This reserve fund is solely for the benefit and protection
of the Commission and shall not be used or pledged for any other purpose
without prior written approval of the Executive Director.
B. Debt Service Reserve Fund will be funded
in whole at closing of the financing of the Project, unless otherwise approved
by the Commission.
C. Debt Service
Reserve Fund may be funded from the amounts financed by the Commission as part
of the overall Project cost.
Section
1506.11
Depreciation reserve fund.
The Depreciation Reserve Fund will be a restricted account,
established and maintained by a third party trustee or the applicant, as
approved by the Executive Director. This reserve fund is for the replacement of
the financed Project and shall not be used for any other purpose without the
written approval of the Executive Director. It will be accumulated at a rate
and amount established by the Executive Director.
Subtitle VII.
Eligible
entities
All of the entities set out below are collectively referred to in
these rules and regulations as "Eligible Entities."
Section 1507.1
Entities eligible for
assistance under the Safe Drinking Water Program.
The loans made available under the Fund may be obtained for an
eligible Project by any duly constituted and existing political subdivision of
the State, including but not limited to counties, cities, towns and
municipalities, and by any duly constituted special purpose improvement
district, rural development authority, rural waterworks facilities boards,
public facilities board, regional water distribution district, and by any duly
qualified and existing public trust or authority, individually or as agent,
representative or instrumentality of any political subdivision, or other
Eligible Entity described above.
Section
1507.2
Combination of eligible entities.
For purposes of qualifying for and obtaining the loan
contemplated herein, any group of Eligible Entities may combine and join in
making application for Project loan, provided each separate entity within the
group is an Eligible Entity with respect to the Fund.
Section 1507.3
Nature of project
ownership.
The Commission shall obtain a secured interest in all projects
developed pursuant to the Fund. Accordingly, and as more specifically provided
in Section
1505.1,
as a condition of obtaining a loan in connection with any Project, the
applicant will be required to convey to the Commission a secured interest in
land, buildings, improvements, equipment and other facilities which are
financially assisted by the Fund, and which will comprise a Project, and the
Commission must retain such secured interest until all Project costs and other
fees and charges as may be imposed by the Commission have been paid or
reimbursed to the Commission.
Section
1507.4
Project costs for which assistance funds may be
expended.
Funds made available by the Commission to an applicant for an
approved Project shall be utilized and expended only toward payment and
financing of Project costs, as approved by the Commission. For purposes of
these regulations, Project costs include the following items:
A. Costs of acquiring the facilities
comprising the Project.
B. Costs of
acquiring and constructing other items included in the facilities, including
obligations incurred for labor and materials by contractors, builders and
material suppliers.
C. Costs of
restoration or relocation of property damaged or destroyed in connection with
any construction.
D. Contractors'
performance, payment and completion bond premiums.
E. Title insurance premiums.
F. Costs of machinery, equipment and related
facilities acquired or purchased for inclusion in the facilities and the cost
of shipping, transportation and installation thereof.
G. Taxes or other municipal or governmental
charges levied or lawfully assessed against the facilities acquired during the
period of acquisition.
H. Insurance
premiums in connection with acquisition of the facilities.
I. Architectural and engineering fees for
services related to the Project prior to and during the period of
acquisition.
J. Payment or
reimbursement to the applicant for interim financing and advances and all costs
thereof.
K. Abstract and title
opinion costs.
L. Reasonable
Project legal fees and expenses of counsel for the applicant.
M. Costs of fees of other consultants of the
applicant.
N. Recording
fees.
O. Costs of publishing and
printing proceedings incident to the Project and any local hearings or
approvals required in connection therewith.
P. Such other reasonable and necessary
expenses as may be required to complete the Project, and as may be approved by
the Executive Director.
Section
1507.5
Granting of secured interest or ownership.
For an approved application and Project, the Commission is
authorized to advance funds in the form of progress payments for the Project.
Payment requests must be accompanied by appropriate documentation from Project
applicants satisfying the conditions for disbursements set forth in Subtitle V
of these rules and regulations.
Section
1507.6
Assets to be conveyed.
A secured interest in all assets constituting part of a Project
financed with funds must be assigned to the Commission at the time of
disbursement of such funds. A secured interest may be assigned to the
Commission in whole or in part from time to time as portions of the Project are
completed and become the subject of requests for disbursement of
funds.
Section 1507.7
Maximum participation.
The Commission may make a loan to an Eligible Entity in an amount
equal to the total Project cost.
Appendix
List of federal law and authorities
Environmental:
* Archeological and Historic Preservation Act; PL 86-523 as
amended
* Clean Air Act; PL 84-159 as amended
* Coastal Barrier Resources Act; 16 U.S.C. 3501 et seq.
* Coastal Zone Management Act; PL 92-583, as amended
* Endangered Species Act; PL 93-205 as amended
* Farmland Protection Policy Act; PL 97-98
* Fish and Wildlife Coordination Act, PL 85-624 as amended
* Floodplain Management, Executive Order 11988 as amended by
Executive Order 12148
* National Historic Preservation Act; PL 89-665 as amended
* Protection and Enhancement of the Cultural Environment;
Executive Order 11593
* Protection of Wetlands, Executive Order 11990
* Safe Drinking Water Act; Section 1424(e), PL 95-523 as
amended
* Wild and Scenic Rivers Act; PL 90-542 as amended
Economic:
* Administration of the Clear Air Act and the Federal Water
Pollution Control Act with respect to Federal Contracts, Grants or Loans,
Section
306 of the Clean air Act and Section
508 of the Clean Water Act, including
Executive Order 11738
* Brooks - Murkowski Amendment; Section 109, PL 100-202
* Demonstration Cities and Metropolitan Development Act; PL
89-754, as amended
Social Legislation:
* Age Discrimination Act, PL 94-135
* Civil Rights Act of 1964, title VI, PL 88-352
*
Drug-Free Workplace Act, PL 100-690
* Equal Employment Opportunity; Executive Order 11246 as
amended
* Prohibition against sex discrimination under the Federal Water
Pollution Control Act; Section 13 of PL 92-500
* Rehabilitation Act; PL 93-112 (including Section
504 and Executive Orders 11914 and
11250)
* Women and Minority Business Enterprise; Executive Orders 11625,
12138 and 12432
Miscellaneous
Authority:
* Debarment and Suspension; Executive Order 12549
* Uniform Relocation and Real Property Acquisition Policies Act;
PL 91-646
