Current through Register Vol. 54, No. 44, November 2, 2024
(a)
Refinancing.
(1) As provided
in section 10(m) of the act (35 P. S. §
751.10(m)), financial
assistance will not be available for refinancing of a project, except that the
Water Pollution Control Revolving Fund may be used to the extent authorized by
the Water Quality Act of 1987 (33 U.S.C.A. §§
1251-1387;
1414a) for a project commenced
after March 7, 1985.
(2) The
provision of financial assistance by the Authority will be prohibited under
this section when one of the following conditions applies for an applicant's
project:
(i) Construction is initiated prior
to the time that application to the Board for financial assistance is approved,
and, except as otherwise provided in subsection (b) or (h), a Letter of No
Prejudice has not been issued by the Authority.
(ii) The applicant has adequate long-term
financing in place prior to initiation of construction, and completion of the
project with this financing will result in reasonable user rates, relative to
the project users' ability to pay, and the rates paid by users of systems in
comparable socio-economic circumstances.
(3) For purposes of this section, the term
"long-term financing" excludes a credit accommodation-including a loan, line of
credit, bond financing or other credit facility-which:
(i) Has a final maturity date not exceeding
the later of one of the following:
(A) Five
years from the date the credit accommodation was consummated.
(B) Six months following the anticipated
completion of construction, as evidenced by a certificate of the consulting
engineer to the applicant or other evidence acceptable to the
Authority.
(ii) Can be
prepaid by the applicant on or before a date which is not later than 90 days
following the date upon which the financial assistance is provided by the
Authority.
(b)
Letters of No Prejudice.
(1)
Exceptions to the general prohibition against initiation of construction prior
to consideration by the Board may be made when a project is required to proceed
before an application for financial assistance can be approved by the Board. In
this case, a potential applicant may apply to the Authority for a Letter of No
Prejudice, wherein the Authority agrees to consider a future application for
financial assistance without limitation or prejudice even if project
construction has begun at that time. If the Authority issues a Letter of No
Prejudice, project construction can begin without jeopardizing or benefiting a
future application.
(2) A Letter of
No Prejudice may be granted by the Authority if a project is required to be
initiated to accomplish one of the following:
(i) Comply with a State or Federal regulatory
order; for example, a Department Consent Order and Agreement.
(ii) Attend to some demonstrable public
health or safety emergency.
(iii)
Make possible an economic development project resulting in retention of
existing jobs or the creation of new jobs where the opportunity may be lost
because of delay.
(3) The
Authority will seek independent confirmation from the Department or other
appropriate State or Federal agencies that a public health or safety emergency
justifying issuance of a Letter of No Prejudice does in fact exist. The
Authority will seek similar confirmation from the Department of Commerce
regarding the possible loss of an economic development
opportunity.
(c)
Partial funding.
(1) The
Authority reserves the right to provide funding for only a portion of the total
costs of a project or only a portion of the amount requested in a financial
assistance application. Partial funding will be considered when the Authority's
ability to pay analysis indicates that a project's user fees, relative to
ability to pay, would be below those of systems in comparable socio-economic
circumstances when the amount of assistance requested in an application is
financed at the maximum interest rates defined in section 10(f) of the act. In
that case, the amount of assistance provided by the Authority will be reduced
below that requested by the applicant until resulting user rates are equivalent
to those systems in comparable socio-economic circumstances.
(2) The Authority may also provide only
partial funding when it determines that action is necessary to protect the
Authority's financial integrity.
(d)
Alternative sources of
financing.
(1) An applicant shall
explore possible sources of financing for the proposed project before applying
to the Authority. The Authority will continue to encourage and assist even a
successful applicant to seek alternative resources of financing to supplement
financing provided by the Authority.
(2) The extent to which the Authority will
require an applicant to rely on available alternative financing will depend
upon the effect this financing has on user rates, relative to a project users'
ability to pay and in relation to systems in comparable socio-economic
circumstances. This evaluation shall apply to financing secured by an applicant
prior to initiation of the application process, as well as financing secured
thereafter.
(e)
Other forms of assistance. As provided in section 10(h) of the
act, the Authority may make full use of other forms of assistance to
applicants, in addition to providing loans and grants. This alternative
assistance can include bond and loan guarantees and the purchase of bond
insurance.
(f)
Total
funding limits. Total assistance to a single project will not total
more than $11 million or $20 million if a project serves more than one
municipality, except that the Board by an affirmative vote of at least nine
members may authorize loans in excess of $20 million to comprehensive projects
providing or proposing consolidated services to a region encompassing all or
parts of four or more municipalities.
(g)
Limitation. Financial
assistance will not be made available that might jeopardize or compromise a
source of Authority funds.
(h)
Limited exception. Failure by an applicant to request a Letter
of No Prejudice prior to initiating construction of a project will not render a
subsequent application for financial assistance to the Authority ineligible if
the following conditions apply:
(1) The
construction was initiated between the dates of March 1, 1988, and February 25,
1989.
(2) The applicant would have
otherwise qualified for a Letter of No Prejudice under this chapter.
The provisions of this §963.17 amended under the
Pennsylvania Infrastructure Investment Authority Act (35 P. S.
§§ 751.1-751.20).
This section cited in 25 Pa. Code §
963.11 (relating to eligible
costs); 25 Pa. Code §
963.13 (relating to advance
funding); and 25 Pa. Code §
965.4 (relating to eligible
costs).
