Texas Administrative Code
Title 31 - NATURAL RESOURCES AND CONSERVATION
Part 10 - TEXAS WATER DEVELOPMENT BOARD
Chapter 363 - FINANCIAL ASSISTANCE PROGRAMS
Subchapter I - PILOT PROGRAM FOR WATER AND WASTEWATER LOANS TO RURAL COMMUNITIES
Division 3 - CLOSING AND RELEASE OF FUNDS
Section 363.931 - Requirements for Loan Closing
Universal Citation: 31 TX Admin Code ยง 363.931
Current through Reg. 49, No. 38; September 20, 2024
(a) Instruments needed for closing. The documents which shall be required at the time of closing shall include the following:
(1) if
not closing under the pre-design funding option, evidence that requirements and
regulations of all identified local, state and federal agencies having
jurisdiction have been met, including but not limited to permits and
authorizations;
(2) a certified
copy of the bond ordinance, order or resolution adopted by the governing body
authorizing the issuance of debt to be sold to the board, or an executed
promissory note and loan agreement, that is acceptable to the executive
administrator and which shall have sections providing as follows:
(A) if loan proceeds are to be deposited into
an escrow account at the closing on all or a portion of the loan, then an
escrow account shall be created that shall be separate from all other accounts
and funds, as follows:
(i) the account shall
be maintained by an escrow agent as defined in §
363.2 of
this title (relating to Definitions of Terms);
(ii) funds shall not be released from the
escrow account without written approval by the executive
administrator;
(iii) upon request
of the executive administrator, the escrow account statements shall be provided
to the executive administrator;
(iv) the investment of any loan or grant
proceeds deposited into an approved escrow account shall be handled in a manner
that complies with the Public Funds Investment Act, Texas Government Code,
Chapter 2256; and
(v) the escrow
account shall be adequately collateralized in a manner sufficient to protect
the board's interest in the project and that complies with the Public Funds
Collateral Act, Texas Government Code, Chapter 2257;
(B) that a construction account shall be
created which shall be separate from all other accounts and funds of the
applicant;
(C) that a final
accounting be made to the board of the total sources and authorized use of
project funds within 60 days of the completion of the project and that any
surplus loan funds be used in a manner as approved by the executive
administrator;
(D) that an annual
audit of the rural community, prepared in accordance with generally accepted
auditing standards by a certified public accountant or licensed public
accountant be provided annually to the executive administrator;
(E) that the rural community shall fix and
maintain rates and collect charges to provide adequate operation, maintenance
and insurance coverage on the project in an amount sufficient to protect the
board's interest;
(F) that the
rural community shall maintain current, accurate and complete records and
accounts in accordance with generally accepted accounting principles necessary
to demonstrate compliance with financial assistance related legal and
contractual provisions;
(G) that
the rural community covenants to abide by the board's rules and relevant
statutes, including the Texas Water Code, Chapters 15, 16, and 17;
(H) that the rural community, or an obligated
person for whom financial or operating data is presented, will undertake,
either individually or in combination with other issuers of the rural
community's obligations or obligated persons, in a written agreement or
contract to comply with requirements for continuing disclosure on an ongoing
basis substantially in the manner required by Securities and Exchange
Commission (SEC) rule 15c2-12 and determined as if the board were a
Participating Underwriter within the meaning of such rule, such continuing
disclosure undertaking being for the benefit of the board and the beneficial
owner of the rural community's obligations, if the board sells or otherwise
transfers such obligations, and the beneficial owners of the board's bonds if
the rural community is an obligated person with respect to such bonds under
rule 15c2-12;
(I) that all payments
shall be made to the board via wire transfer at no cost to the board;
(J) that the partial redemption of bonds or
other authorized securities be made in inverse order of maturity;
(K) that insurance coverage be obtained and
maintained in an amount sufficient to protect the board's interest in the
project;
(L) that the rural
community shall establish a dedicated source of revenue for repayment;
and
(M) any other recitals mandated
by the executive administrator;
(3) unqualified approving opinions of the
attorney general of Texas and if bonds are issued, a certification from the
comptroller of public accounts that such debt has been registered in that
office;
(4) if bonds are issued, an
unqualified approving opinion by a recognized bond attorney acceptable to the
executive administrator, or if a promissory note and loan agreement is used, an
opinion from the rural community's attorney which is acceptable to the
executive administrator;
(5)
executed escrow agreement entered into by the entity and an escrow agent
satisfactory to the executive administrator, in the event that funds are
escrowed, or a certificate of trust as defined in §
363.2 of
this title, if applicable;
(6)
other or additional data and information, if deemed necessary by the executive
administrator.
(b) Loan agreement and promissory note. The loan agreement and promissory note shall be executed at the time of closing. The loan agreement shall provide for the following:
(1) the term of the loan and a
schedule for repayment of principal and interest;
(2) that an annual audit of the rural
community, prepared in accordance with generally accepted auditing standards by
a certified public accountant or licensed public accountant, be provided
annually to the executive administrator for the term of the loan;
(3) that a final accounting be made to the
executive administrator of the total sources and authorized use of project
funds within 60 days of the completion of the project and that any surplus loan
funds be used in a manner as approved by the executive administrator;
(4) that the rural community shall fix and
maintain rates and collect taxes and/or charges to provide:
(A) adequate operation, maintenance and
insurance coverage on the project in an amount sufficient to protect the
board's interest; and
(B) adequate
revenue to pay principal and interest on the loan as it comes due;
(5) that the rural community
covenants to abide by the board's rules and relevant statutes, including the
Texas Water Code, Chapter 15;
(6)
that the rural community covenants to comply with all applicable state and
federal environmental requirements prior to the initiation of construction and
any mitigation which might be required after construction;
(7) that the rural community will apply any
unused funds to the repayment of loan principal; in inverse order of maturity
or in a manner as approved by the executive administrator;
(8) that the rural community shall maintain
current, accurate and complete records and accounts in accordance with
generally accepted accounting principles necessary to demonstrate compliance
with financial assistance related legal and contractual provisions;
and
(9) any additional conditions
that may be imposed by the board or requested by the executive
administrator.
(c) Bonds. If bonds are issued, the documents which shall be submitted by the time of closing shall comply with the requirements of § 363.42 of this title (relating to Loan Closing).
Disclaimer: These regulations may not be the most recent version. Texas 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.
This site is protected by reCAPTCHA and the Google
Privacy Policy and
Terms of Service apply.
