Current through Register Vol. 54, No.43, October 26, 2024
Section 963.17 - Funding limitations(a)Refinancing.(1) As provided in section 10(m) of the act (35 P. S. § 751.10(m)), financial assistance will not be available for refinancing of a project, except that the Water Pollution Control Revolving Fund may be used to the extent authorized by the Water Quality Act of 1987 (33 U.S.C.A. §§ 1251-1387; 1414a) for a project commenced after March 7, 1985.(2) The provision of financial assistance by the Authority will be prohibited under this section when one of the following conditions applies for an applicant's project: (i) Construction is initiated prior to the time that application to the Board for financial assistance is approved, and, except as otherwise provided in subsection (b) or (h), a Letter of No Prejudice has not been issued by the Authority.(ii) The applicant has adequate long-term financing in place prior to initiation of construction, and completion of the project with this financing will result in reasonable user rates, relative to the project users' ability to pay, and the rates paid by users of systems in comparable socio-economic circumstances.(3) For purposes of this section, the term "long-term financing" excludes a credit accommodation-including a loan, line of credit, bond financing or other credit facility-which: (i) Has a final maturity date not exceeding the later of one of the following:(A) Five years from the date the credit accommodation was consummated.(B) Six months following the anticipated completion of construction, as evidenced by a certificate of the consulting engineer to the applicant or other evidence acceptable to the Authority.(ii) Can be prepaid by the applicant on or before a date which is not later than 90 days following the date upon which the financial assistance is provided by the Authority.(b)Letters of No Prejudice.(1) Exceptions to the general prohibition against initiation of construction prior to consideration by the Board may be made when a project is required to proceed before an application for financial assistance can be approved by the Board. In this case, a potential applicant may apply to the Authority for a Letter of No Prejudice, wherein the Authority agrees to consider a future application for financial assistance without limitation or prejudice even if project construction has begun at that time. If the Authority issues a Letter of No Prejudice, project construction can begin without jeopardizing or benefiting a future application.(2) A Letter of No Prejudice may be granted by the Authority if a project is required to be initiated to accomplish one of the following: (i) Comply with a State or Federal regulatory order; for example, a Department Consent Order and Agreement.(ii) Attend to some demonstrable public health or safety emergency.(iii) Make possible an economic development project resulting in retention of existing jobs or the creation of new jobs where the opportunity may be lost because of delay.(3) The Authority will seek independent confirmation from the Department or other appropriate State or Federal agencies that a public health or safety emergency justifying issuance of a Letter of No Prejudice does in fact exist. The Authority will seek similar confirmation from the Department of Commerce regarding the possible loss of an economic development opportunity.(c)Partial funding.(1) The Authority reserves the right to provide funding for only a portion of the total costs of a project or only a portion of the amount requested in a financial assistance application. Partial funding will be considered when the Authority's ability to pay analysis indicates that a project's user fees, relative to ability to pay, would be below those of systems in comparable socio-economic circumstances when the amount of assistance requested in an application is financed at the maximum interest rates defined in section 10(f) of the act. In that case, the amount of assistance provided by the Authority will be reduced below that requested by the applicant until resulting user rates are equivalent to those systems in comparable socio-economic circumstances.(2) The Authority may also provide only partial funding when it determines that action is necessary to protect the Authority's financial integrity.(d)Alternative sources of financing.(1) An applicant shall explore possible sources of financing for the proposed project before applying to the Authority. The Authority will continue to encourage and assist even a successful applicant to seek alternative resources of financing to supplement financing provided by the Authority.(2) The extent to which the Authority will require an applicant to rely on available alternative financing will depend upon the effect this financing has on user rates, relative to a project users' ability to pay and in relation to systems in comparable socio-economic circumstances. This evaluation shall apply to financing secured by an applicant prior to initiation of the application process, as well as financing secured thereafter.(e)Other forms of assistance. As provided in section 10(h) of the act, the Authority may make full use of other forms of assistance to applicants, in addition to providing loans and grants. This alternative assistance can include bond and loan guarantees and the purchase of bond insurance.(f)Total funding limits. Total assistance to a single project will not total more than $11 million or $20 million if a project serves more than one municipality, except that the Board by an affirmative vote of at least nine members may authorize loans in excess of $20 million to comprehensive projects providing or proposing consolidated services to a region encompassing all or parts of four or more municipalities.(g)Limitation. Financial assistance will not be made available that might jeopardize or compromise a source of Authority funds.(h)Limited exception. Failure by an applicant to request a Letter of No Prejudice prior to initiating construction of a project will not render a subsequent application for financial assistance to the Authority ineligible if the following conditions apply:(1) The construction was initiated between the dates of March 1, 1988, and February 25, 1989.(2) The applicant would have otherwise qualified for a Letter of No Prejudice under this chapter.The provisions of this §963.17 adopted February 24, 1989, effective 2/25/1989, 19 Pa.B. 771; amended October 26, 1990, effective 10/27/1990, 20 Pa.B. 5425; amended July 7, 1995, effective 7/8/1995, 25 Pa.B. 2720.The provisions of this §963.17 amended under the Pennsylvania Infrastructure Investment Authority Act (35 P. S. §§ 751.1-751.20).
This section cited in 25 Pa. Code § 963.11 (relating to eligible costs); 25 Pa. Code § 963.13 (relating to advance funding); and 25 Pa. Code § 965.4 (relating to eligible costs).