94- 376 C.M.R. ch. 595, § B

Current through 2024-51, December 18, 2024

Section 376-595-B - Program Requirements

1.Obligation Period. Funds allotted to the State must be available for obligation for a period of one year after the close of the federal fiscal year for which the funds are authorized.

2.Reserves for Planning and Program Administration. The Act, under section 604(b) ( 33 U.S.C.§ 1384 ) requires states to reserve the greater of one percent of its allotment or $100,000 each year to carry out planning under sections 205(j) and 303(e). Section 603(d)(7) of the Act ( 33 U.S.C.§ 1383(d)(7) ) also allows states to use up to four percent of all grant awards to the fund under this title, $400,000 per year, or 1/5^th percent per year of the current valuation of the fund, whichever amount is greatest, plus the amount of any fees collected by the State for administration of the fund and conducting activities under this title.

3.Types of Financial Assistance. The SRF has been established to assist and encourage Eligible Applicants to design and construct eligible Treatment Works and Non-Point Source projects required to improve or protect water quality and public health with Financial Assistance.

(a) Purpose of the SRF. The SRF may be used for one or more of the following purposes:

(i) To make loans to Eligible Applicants pursuant to 30-A M.R.S.§5953-A and § 6006-A;

(ii) To make loans to refund bonds or notes of Eligible Applicants issued after March 7, 1985, for the purpose of financing the construction of any capital improvement described in § 5953- A(l), and certified under § 5953- A(3);

(iii) To guarantee or insure, directly or indirectly, the payment of notes or bonds issued or to be issued by Eligible Applicants for the purpose of financing the construction of any capital improvement described in section 5953- A(l), and certified under section 5953- A(3);

(iv) To guarantee or insure, directly or indirectly, funds established by Eligible Applicants for the purpose of financing construction of any capital improvement described in section 5953-A(l);

(v) To invest available fund balances and to credit the net interest income on those balances to the SRF;

(vi) To invest as a source of revenue or security for the payment of principal and interest on general or special obligations of the Bank if the proceeds of the sale of the obligations have been deposited in the SRF or if such proceeds are to be used in conjunction with monies from the SRF for eligible Project purposes, or as a source of revenue to subsidize loan payment obligations of Eligible Applicants; and

(vii) To pay the costs permitted pursuant to the Federal Water Pollution Control Act, Title VI.

(b) Requirements of Eligible Applicants. All Eligible Applicants requesting assistance shall meet the following requirements:

(i) The Project must be listed on the Intended Use Plan or the State Project Priority List;

(ii) The Project has complied with requirements of Subsection B(5) of this Chapter (relating to Capitalization Grant Requirements) and has been approved by the Department;

(iii) The Project must have Plans and Specifications approved by the Department, if applicable;

(iv) The Project must comply with all applicable statutes and rules;

(v) The Eligible Applicant shall complete an application for financing with the Bank;

(vi) The Eligible Applicant shall establish a dedicated source of funds for repayment of the loan, if applicable;

(vii) The Eligible Applicant shall establish a system of user fees with respect to the Project, if applicable; and

(viii) The Eligible Applicant shall enter into legal and binding commitments with the Bank to complete the financing and repay the loan.

(c) Payments. Payments from the Bank may be made as planning, design and construction is progressing. Funds may not be disbursed from the Bank without prior Department approval, which approval may not be unreasonably withheld.

(d) Sources of Financial Assistance. The Bank may provide Financial Assistance utilizing any amounts in the SRF and available therefor. Such amounts may include the proceeds of Federal Capitalization Grants, state matching funds, loan repayments or debt issued by the Bank, at the discretion of the Bank.

(e) Municipal Bond. Each loan shall be evidenced by a loan agreement, a municipal bond or both in form and substance satisfactory to the Bank.

(f) Fees. In order to maintain minimum administrative functions required by the program, and to ensure the self-sustaining nature of the funds created under the SRF, the Bank and the Department may jointly establish loan servicing fees that shall be shared in accordance with a Memorandum of Understanding that may not exceed five percent (5%) of aggregate annual regularly scheduled debt service payments on the loans. The Bank will deduct these fees from payments received prior to depositing such payments in the SRF. For the same purposes, the Department and the Bank may establish a project management fee which shall not exceed three percent (3%) of the original principal amount on the loan (including interim loans and Bank leveraged bond funds, if blended with the SRF). At the request of the Department, the Bank will deduct this fee from payments received prior to depositing such payments in the SRF or Bank Funds. These fees shall not be part of any loans and must be held outside the SRF or Bank funds. If interest is being charged on any loans made from funds in the SRF on which fees are being assessed, the interest rate may be adjusted downward to accommodate the fees so there will be no increase in cost to the borrowers. On all loans made from funds in the SRF where the interest rate is at or below the minimum interest rate as established by the Bank and the Department, the requirement to further adjust the interest rate down to accommodate the fees shall not apply, except to the extent that the sum of all fees causes the cost of the loan to exceed market rates. In all cases, the total cost of a loan to a borrower (including all fees and interest) must remain at or below market rates. The interest rate for loans made with Bank funds not deposited into the SRF may, at the discretion of the Bank, be adjusted downward to accommodate any fees charged.

4.Capitalization Grant Application .The Department shall submit the Intended Use Plan and Project Priority List with an application approved by the Bank and the Department for the Capitalization Grant for that fiscal year to EPA.

5.Capitalization Grant Requirements .All Projects that receive assistance from the SRF with funds directly made available by Capitalization Grants must meet the requirements listed below. These requirements are referred to as "equivalency requirements". Projects selected by the Department to comply with the federal requirement do not actually need to receive federal capitalization grant funds.

(a) MBE/WBE. Federal requirements for the participation of minority and women owned businesses (MBE/WBE);

(b) Signage. Federal requirements for signage;

(c) FFATA. Reported in accordance with theFederal Funding Accountability and Transparency Act of 2010;

(d) Federal Cross-Cutters. The SRF must comply with the cross-cutting federal authority requirements of other federal laws and Executive Orders.See 40 C.F.R.§ 35.3145;

(e) Architectural/Engineering (A/E) Services Selection. A/E contracts must be negotiated in accordance with 40 U.S.C. §§ 1101et seq;

(f) Single Audit. 2 C.F.R. 200 Subpart F requires a "Single Audit" to be conducted for any assistance recipient expending the current federal minimum in federal financial assistance in a fiscal year; and

(g) Federal Requirements. Any other applicable federal requirements.

6.Project Priority List

(a) Project Priority List. The Project Priority List is a listing of Projects eligible to receive Financial Assistance from the SRF. Loan assistance may be provided regardless of the rank on the State Project Priority List.

(b) Preparation and Submission. The Department will prepare and revise the Project Priority List in accordance with Subsection B(7) of this rule (relating to Intended Use Plan) as necessary to efficiently manage the SRF. The Department shall submit the final Project Priority List to EPA.

(c) Effective Period. The Project Priority List shall become effective and supersede all previous lists upon submittal to and acceptance by EPA and shall remain effective until changed by the Department.

7.Intended Use Plan

(a) Intended Use Plan. Each fiscal year, concurrent with preparation of the Project Priority List, the Department prepares an Intended Use Plan that is subjected to a public comment period and approved by EPA. The Intended Use Plan identifies Projects that are eligible to receive Financial Assistance from appropriations in that fiscal year and may include contingency Projects from the Project Priority List to substitute for Projects which are delayed. The Intended Use Plan must comply with 40C.F.R.§ 35.3150.

(b) Added Projects. The Department may move Projects from the Project Priority List to the Intended Use Plan as necessary to utilize available funds.

94- 376 C.M.R. ch. 595, § B