Texas Administrative Code
Title 31 - NATURAL RESOURCES AND CONSERVATION
Part 10 - TEXAS WATER DEVELOPMENT BOARD
Chapter 365 - RURAL WATER ASSISTANCE FUND
Subchapter C - CLOSING AND RELEASE OF FUNDS
Section 365.41 - Loan Closing

(A) if loan proceeds are to be deposited into an escrow account, at the closing on all or a portion of the loan or grant, then an escrow account must be created that must be separate from all other accounts and funds, as follows:

(B) that a construction account must be created, which must 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 political subdivision, prepared in accordance with generally accepted auditing standards by a certified public accountant or licensed public accountant be provided annually to the executive administrator, or if a promissory note and loan agreement is used and the rural political subdivision is a Water Supply Corporation or Sewer Service Corporation, then in lieu of an annual audit a filed Internal Revenue Service Form 990 may be provided annually so long as the balance of all outstanding loans from the board to the Water Supply Corporation or Sewer Service Corporation does not exceed $1,000,000;

(E) that the rural political subdivision must 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 political subdivision must document the adoption and implementation of an approved water conservation program for the duration of the loan, in accordance with § 363.15 of this title;

(G) that the rural political subdivision must 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;

(H) that the rural political subdivision covenants to abide by the board's rules and relevant statutes, including the Texas Water Code, Chapters 15 and 17;

(I) if the rural political subdivision is issuing bonds or other authorized securities, that the rural political subdivision 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 political subdivision'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 political subdivision's obligations, if the board sells or otherwise transfers such obligations, and the beneficial owners of the board's obligations if the rural political subdivision is an obligated person with respect to such obligations under rule 15c2-12;

(J) that all payments must be made to the board via wire transfer or in a manner acceptable to the Executive Administrator at no cost to the board;

(K) that the partial redemption of bonds or other authorized securities be made in inverse order of maturity;

(L) that insurance coverage be obtained and maintained in an amount sufficient to protect the board's interest in the project;

(M) that the rural political subdivision must establish a dedicated source of revenue for repayment; and

(N) any other recitals mandated by the executive administrator;