Current through Register Vol. XLI, No. 50, December 13, 2024
Section 44-2-4 - State Loans4.1. Description of loans.4.1.1. Source of loan funds. -- It is anticipated that the Authority shall obtain the funds with which to make loans from the proceeds of revenue bonds and notes issued from time to time by the Authority pursuant to the Act, although the Authority may use funds from other sources to make such loans.4.1.2. Evidence of and security for loans. -- The loans shall be evidenced by revenue bonds or notes or other debt instruments issued by applicants and purchased by the Authority, at par or at a discount, to reflect the costs of the Authority incurred in issuing its obligations to provide the funds to make the loans and other costs related to financing such water development projects, and shall be secured by a pledge of the fees, charges and all other revenues of the water development projects to be constructed, in whole or in part, with the proceeds of the loans and any other collateral required by the Authority.4.1.3. Amount of loan. -- Each loan shall be in an amount which shall cover all costs of the water development project to be constructed by the applicant for which funds from the aforesaid grant or other sources are not available.4.2. Eligibility for loans. 4.2.1. Governmental agencies eligible for loans. -- All governmental agencies, or any combination thereof, which have the authority under applicable law to undertake a water development project shall be eligible for a loan.4.2.2. Application for loan. -- Any eligible governmental agency which desires to obtain a loan shall make a separate application to the Authority on forms prescribed by the Director of the Authority for each water development project for which a loan is desired.4.2.3. Determination of priority for loan. -- The priority of each water development project for which an application for a loan is received by the Authority shall be fixed in relation to other water development projects for which such applications are received on the date on which the applicant has:(a) Provided documentation satisfactory to the Authority that the water development project is a water facility eligible for a loan under the provisions of the Act;(b) Demonstrated to the satisfaction of the Authority that it has adopted or will adopt all necessary ordinances or resolutions in form and substance satisfactory to the Authority and has taken or will take all proceedings required by law to enable it to enter into a loan agreement and to issue its revenue bonds or notes for purchase by the Authority and that it has obtained or will obtain all other necessary governmental agencies' approvals of user charges for the water development project which will provide annual net revenues to the applicant which exceed, by an amount or percentage specified in the loan agreement, the annual payments required to be made by the applicant to the Authority under the loan agreement.4.3. Loans to be subject to loan agreement between Authority and applicant. Prior to the making of a loan, the Authority shall execute and enter into a loan agreement with the applicant, pursuant to the provisions of Section 4.7 of these rules, which shall include such provisions as may be required by the Authority, including, without limitation, the following:
(a) The cost of such water development project, the amount of the loan, the terms of repayment of the loan and security therefor, which may include, in addition to the pledge of all fees, charges and other revenues from such water development project after a reasonable allowance for operation and maintenance expenses, a deed of trust or other appropriate security instrument creating a lien on such water development project;(b) The specific purposes for which the proceeds of the loan shall be expended, the procedures as to the disbursement of loan proceeds and the duties and obligations imposed upon the applicant in regard to the construction or acquisition of the water development project;(c) The agreement of the applicant to impose, collect and, if required to repay the obligations of such applicant under the loan agreement, increase service charges from persons using said water development project, which service charges shall be pledged for the repayment of the loan together with all interest, fees and charges thereon and all other financial obligations of such applicant under the loan agreement; and(d) The agreement of the applicant to comply with all applicable laws, rules and regulations issued by the Authority or other state, federal and local bodies in regard to the financing, construction, operation, maintenance and use of the water development project.4.4. Repayment of loans; interest on loans; fees and charges.4.4.1. Payment of principal and interest on loan. -- Payment of the principal of the loan shall be made by the applicant on an annual basis as scheduled by the Authority and interest payments on the loan shall be made by the applicant on a semiannual basis as scheduled by the Authority, in accordance with the provisions of the loan agreement.4.4.2. Computation of interest on loans. -- Each loan shall bear interest from the date of the delivery of the bonds or notes of the applicant evidencing the loan to the applicant at a coupon rate or rates per annum which shall be equal to the coupon rate or rates per annum borne by the obligations of the Authority issued to provide the funds to make the loan: Provided, That, pursuant to the provisions of the loan agreement, the Authority may purchase the bonds or notes of the applicant at par or at a discount to reflect the costs of the Authority incurred in issuing its said obligations and other costs relating to the making of the loan.4.4.3. Fees and charges. -- In addition to payment of principal and interest on the loan, each applicant shall agree in the loan agreement to pay fees and charges to the Authority equal to the applicant's share of the administrative expenses of the Authority relating to the loan program referred to in this Section 4, including, without limitation, the fees and expenses of the trustee and paying agents for the bonds to be issued by the Authority to make the loan.4.5. Agreement of Authority to make loans conditioned upon sale of bonds. The obligation of the Authority to make any loan is and shall be conditioned upon receipt by the Authority of the proceeds of bonds issued by the Authority or funds from other sources in such amounts and on such terms and conditions as, in the sole judgment of the Authority, will enable it to make the loans.
4.6. Construction of water development project. Each applicant receiving a loan shall, prior to commencement of construction of the water development project, comply with all applicable provisions of the Act, of the loan agreement and of the resolution or ordinance authorizing the issuance of bonds or notes evidencing the loan, including, without limitation, that the applicant shall obtain all federal, state and local approvals.
4.7. Miscellaneous.4.7.1. Agreement between Authority and applicant. -- The agreement between the Authority and the applicant referred to in Section 4.3 of these rules, shall be consistent with these rules and shall contain such additional provisions which the Authority determines are necessary to the implementation of these rules and ensure the proper carrying forward of the program.