Kan. Admin. Regs. § 110-3-5

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

Section 110-3-5 - Terms of the program

Except as otherwise provided in a loan agreement, the Kansas partnership fund revolving loan fund program shall make loans available under the following terms.

(a) Program loans shall not exceed the total cost of the project.

(b) Except when waived by the secretary, a local unit of government shall not have more than $2,000,000 in total program loans outstanding at any one time.

(c) The term of program loans shall not exceed the expected life of the financed public improvement or improvements as determined by a certified professional engineer, or 15 years, whichever is less. An extended loan term beyond 15 years may be authorized by the secretary in unusual cases where a special need is demonstrated. However, any loans funded in whole or in part with bond proceeds shall be subject to the terms and conditions provided for in the bond indentures.

(d) The interest rate for new loans shall be reviewed and established annually by the secretary of commerce on January 1 of each year. The interest rate for new loans may be changed by the secretary whenever bonds are issued by the Kansas development finance authority for the purposes of the Kansas partnership fund.

(e) All loan proceeds shall be made available to the borrower incrementally on a receipts-only basis. Whenever a loan is approved, an encumbrance shall be issued for the full amount of the loan. This amount shall be set aside and then may be drawn down as eligible project cost receipts are submitted and approved. Interest shall only be due on loan amounts actually received. Any interest earnings on encumbered funds which have been set aside shall be credited to the partnership fund or designated for repayment of bonds issued for this program as needed.

(f) Any costs incurred for improvements beyond the necessary scope of a single purpose project, or associated with activities in addition to the single purpose project, shall not be considered allowable expenses under this program. In multi-purpose projects, only costs that are documented by a certified professional engineer as necessary and appropriate for an eligible single purpose project shall be considered allowable expenses under this program.

(g) The first payment of loan principal and interest shall become due at a time coordinated with the loan recipient's budget cycle, but not later than 18 months after receipt of the first loan disbursement.

(h) Payments shall be due thereafter on at least a semi-annual basis, and the payments may be adjusted so that the total of principal and interest shall be in approximately equal amounts throughout the life of the loan.

(i) A delinquency charge of 1.5% per month shall be applied to any payments more than 30 days overdue.

(j) Each borrower shall have the right to prepay loan obligations in accordance with the terms of the loan contract.

Kan. Admin. Regs. § 110-3-5

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