Rules & Regulations of the State of Tennessee
Title 0400 - Environment and Conservation
Subtitle 0400-45 - Division of Water Resources
Chapter 0400-45-04 - Regulations Governing the Waterworks Construction Loan Act (Transferred from 1200-05-04)
Section 0400-45-04-.04 - ELIGIBLE APPLICANTS

Universal Citation: TN Comp Rules and Regs 0400-45-04-.04

Current through September 24, 2024

(1) Only municipalities as defined in these rules and regulations and the Act shall be eligible to apply for loans to assist in the financing of the cost of construction of new of the improvement or expansion of existing water supply system projects.

(2) No applicant shall be eligible for the award of a loan unless the applicant demonstrates to the satisfaction of the Division of Water Resources that:

(a) The applicant is a municipality as defined in these rules and regulations and the Act.

(b) The applicant has the financial capacity to provide its share of the project costs. To the extent that the costs are to be provided on a pay-as-you-go basis, the full amount indicated from this source shall be represented by cash on hand and/or may be expected to be included in the applicant's annual budget for the years in which payments under the project contract will be due. To the extent that borrowed funds are anticipated, the applicant shall certify, that the additional debt, together with the applicant's existing debt, is within the debt limitation provisions of the general laws of the State.

(c) The applicant has substantially complied or will substantially comply with all applicable laws, rules, regulations and ordinances of the State.

(d) The estimated revenues to be derived from the project under the applicant's proposed schedule of fees and charges will be adequate to provide for proper operation, maintenance, and administration, reasonable expansion of the system and repayment of present and proposed indebtedness, as determined from the detailed engineering report and other available information, and will comply with T.C.A. §§ 68-221-512 and 68-221-513. For this purpose, if the project described in the application is to be an integral part of an existing system, the revenues to be derived from operation of the entire system shall be utilized in determining the adequacy of the applicant's proposed schedule of fees and charges.

(e) The applicant has attempted, without success to obtain the necessary financial assistance from other State, Federal, or private sources at a lesser cost.

(f) The proposed project will be placed under construction within the fiscal year in which the loan is received. The repayment period may be determined by the applicant, but in no case shall the period exceed thirty (30) years. Also, repayment shall begin no later than one month after completion of the project. Each municipality after entering into a loan agreement shall remit to the Tennessee Local Development Authority such amounts and at such times as shown in the amortization schedule established by the Tennessee Local Development Authority and the Department.

(3) Eligible Project Costs - Eligible project costs shall include the actual cost of construction of facilities, and the cost of equipment and appurtenances, for any project for which a loan is made under the Act, and the actual cost of necessary engineering, legal, and fiscal services related to the project for which a loan is made. Eligible costs also include the cost of purchase of acquisition of real property or interest therein. Costs incurred prior to approval of the application will be eligible with the exception of those costs involved in completing the documents for the application.

(4) Limitations on Eligible Costs - Eligible costs are limited to the extent that any one project shall not be awarded a loan which exceeds 25% of the total funds appropriated by the Legislation.

(5) Exclusion from Eligible Costs - Eligible costs do not include recurring annual expenditures for administration, repairs, operation and maintenance of any water supply systems project, and these costs must be excluded from the applicant's share of the total construction costs.

Authority: T.C.A. §§ 68-221-501 et seq. and 4-5-201 et seq.

Disclaimer: These regulations may not be the most recent version. Tennessee may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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