Kan. Admin. Regs. § 110-3-10

Current through Register Vol. 43, No. 49, December 5, 2024

Section 110-3-10 - Termination procedures

(a) Any Kansas partnership fund loan agreement may be terminated by the secretary in whole or in part at any time if a loan recipient or pending loan recipient fails in a material way to comply with the terms and conditions of a loan or to take adequate corrective actions while under a suspension.

(1) Written notice of the proposed termination shall be provided by the secretary which shall include:

(A) Notification that the loan will be terminat-ed;

(B) an explanation of the reason or reasons for termination proceedings;

(C) the date by which the loan recipient or pending loan recipient must respond to the notification; and

(D) an explanation of the appeal procedure.

(2) The loan recipient or pending loan recipient shall have 30 calendar days from the date of the notice of proposed termination to respond in writing to the secretary before a loan is actually terminated. The response shall set forth the proposed actions to be taken by the loan recipient or pending loan recipient to prevent the proposed termination action.

(3) Within 21 calendar days following receipt of a written response or the expiration of the 30-day response time, whichever occurs first, the recipient or prospective recipient shall be notified, in writing, as to whether the secretary will proceed with termination and of the basis for this decision.

(4) Within 30 calendar days of the date of the decision, the loan recipient or pending loan recipient may file an appeal, which shall be in the form of a written resolution to the secretary of commerce adopted by the appropriate governing body.

(5) Upon the expiration of the 30-day period provided in paragraph (4):

(A) the loan may be terminated by the secretary if no additional appeal has been made; or

(B) the appeal may be reviewed and a final decision may be issued by the secretary on termina-tion.

(b) A loan may be terminated for convenience when the secretary of commerce and the loan recipient or pending loan recipient mutually agree, in writing, that any further expenditure of loan funds is not warranted or will not be beneficial for the designated project. In such cases, the loan may be terminated in whole or in part, and the following conditions shall apply.

(1) The loan recipient or pending loan recipient shall not incur any new obligations for the loan funds after the effective date of termination and shall cancel as many outstanding obligations as possible.

(2) Full credit shall be allowed for any non-cancellable obligations properly incurred prior to termination.

(3) An agreement between the secretary of commerce and the loan recipient or pending loan recipient shall be reached regarding:

(A) the effective date of termination;

(B) in the event of partial termination, the portion to be terminated; and

(C) all other termination conditions.

(c) Upon formal termination of any loan, an encumbrance cancellation shall be issued by the secretary in the amount of any unused loan funds.

(d) The loan recipient or pending loan recipient shall be responsible for all necessary and appropriate actions to allow the secretary of commerce to properly document formal loan termination.

(e) Upon termination, the loan may be foreclosed and any loan principal and accrued interest may be declared to be payable on demand.

Kan. Admin. Regs. § 110-3-10

Authorized by and implementing L. 1988, Ch. 394, Sec. 2; effective Feb. 27, 1989.