PART 10. TEXAS WATER DEVELOPMENT BOARD
CHAPTER 363. FINANCIAL ASSISTANCE PROGRAMS
The Texas Water Development Board (Board) proposes this rulemaking to amend §363.1006 regarding Prioritization System, §363.1007 regarding Prioritization Criteria, §363.1206 regarding Pre-design Funding Option, §363.1207 regarding Prioritization System, and §363.1208 regarding Prioritization Criteria.
BACKGROUND AND SUMMARY OF THE FACTUAL BASIS FOR THE PROPOSED RULES
The Board proposes this rulemaking to amend its current rules related to the application and prioritization process for the Board's commitment to provide financial assistance from its State Participation Account and Water Infrastructure Fund. The proposed amendments will clarify the prioritization process and will provide the flexibility needed for the Board to make commitments to financial assistance and to sell bonds to raise funds for those commitments before the end of each fiscal year. The Board funds the State Participation Account and Water Infrastructure Fund through the issuance of Water Financial Assistance Bonds, which are General Obligation Bonds of the State of Texas. Both the State Participation Account and Water Infrastructure Fund programs offer loans at discounts or with deferred interest, so they are non-self supporting programs, meaning that the Board is not able to pay the debt service on its Water Financial Assistance Bonds solely with the repayment of the loans it makes through these programs. Thus, the Texas Legislature appropriates funds to both of these programs as necessary to allow the Board to pay the debt service on its Bonds. The legislative appropriations are effective for each fiscal year starting September 1, so the Board attempts to sell bonds as necessary to fund existing commitments for financial assistance within each fiscal year, commensurate with the amount of Legislative appropriation for debt service for that fiscal year.
The proposed rulemaking also clarifies the Board's rule regarding the eligibility of reservoir projects for the Pre-design Funding Option under the Board's Water Infrastructure Fund.
SECTION BY SECTION DISCUSSION.
Section 363.1006. The proposed amendment of §363.1006(a) changes the application deadlines from January 1 and July 1 to February 1 and August 1 of each year. Applications for financial assistance are prioritized twice each year and are funded based on available funds. Current §363.1006(a) requires that applications for financial assistance from the State Participation Account and Water Infrastructure Fund, respectively, be submitted on January 1 and July 1 of each year for prioritization. However, the Board believes that revising these deadlines will provide better management of the sale of bonds in coordination with the Board's fiscal year. The Board needs to make commitments early enough during each fiscal year so that the Board may sell its bonds within that fiscal year to raise funds for those commitments, utilizing legislative appropriations available during each fiscal year. In addition, the January 1 deadline is difficult for applicants to meet because of holidays. Thus, the proposed rulemaking changes these application deadlines from January 1 and July 1 to February 1 and August 1 of each year, so that the Board can prioritize the applications in March and September, to allow adequate time to make commitments and sell bonds before the end of each fiscal year. In addition, the proposed rulemaking provides that the Executive Administrator may set additional application deadlines, prioritize applications, and present those applications to the Board for a commitment if the Executive Administrator deems it necessary in order to utilize available funds in any fiscal year.
The proposed amendment of §363.1006(a) also allows the Executive Administrator to accept abridged applications for prioritization purposes, as long as those applications contain adequate information to establish that the applicant qualifies for state participation funding, to describe the project comprehensively, and to establish the cost of the project, as well as any other information requested by the Executive Administrator. Section 363.1006(a) currently requires a complete application for prioritization purposes, and many applicants have found this requirement burdensome, especially when the applicant might not be ranked high enough to receive funding, depending on the availability of funds. Therefore, the proposed amendments allow the Executive Administrator to accept abridged applications for prioritization purposes, as long as those applications contain adequate information necessary for prioritization purposes.
The proposed amendment of §363.1006(a) also adds a provision that an applicant must submit a complete application to the board within 30 days after the board meeting at which the project receives priority for funding, or the project may lose its priority ranking and the board may commit to other projects consistent with the prioritization.
The proposed amendment of §363.1006(b) deletes the requirement that the Executive Administrator provide the Board a list of all completed applications, in order to be consistent with the proposed amendment of §363.1006(a) allowing the Executive Administrator to accept abridged applications for prioritization purposes. The amendment also adds language that clarifies that the Executive Administrator is to provide a prioritized list to the Board with applications recommended by the Executive Administrator.
The proposed amendment of §363.1006(c) deletes the requirement that legislatively-mandated projects receive priority for financial assistance and moves this requirement to §363.1007(a). Currently, §363.1006(c) contains the requirement that legislatively-mandated projects receive priority for financial assistance. However, the Executive Administrator should take this requirement into account when preparing the prioritized list under the prioritization criteria in §363.1007. Therefore, the proposed amendment moves this requirement to §363.1007 so that the Executive Administrator will prioritize the Legislatively-mandated projects first in the prioritized list that is presented to the Board under the procedures in §363.1006.
Section 363.1007. The proposed amendment of §363.1007 adds subsection (a) with the requirement that the board will give priority to projects that the Legislature has determined shall receive priority for financial assistance from the State Participation Account. It also renumbers current subsection (a) as (b), and requires that the Executive Administrator will prioritize projects after first prioritizing projects with legislative priority.
Section 363.1206. The proposed amendment of §363.1206(b) clarifies that reservoir projects are eligible for a Board commitment to fund planning, permitting, acquisition and design costs under the Water Infrastructure Fund pre-design funding option. Applicants for reservoir construction funds must complete planning, permitting, acquisition and design before receiving a commitment to fund reservoir building costs. The intent of the rule is to require applicants to obtain two separate commitments from the Board for reservoir pre-design activities versus construction activities, not to preclude the pre-design funding option for reservoirs altogether. Texas Water Code §15.974(a)(3) specifically provides for the funding of planning, design, and permitting costs from the Water Infrastructure Fund, which are considered pre-design activities. The amendment clarifies that, for reservoir projects, the Board intends to make commitments from the Water Infrastructure Fund for the building costs of reservoirs separately from the planning, permitting, acquisition, and design costs. The proposed amendment of §363.1206(b) is also consistent with the Board's proposed deletion of similar language prohibiting pre-design funding for reservoirs in §363.16(b), published in the December 12, 2008, edition of the Texas Register (33 TexReg 10133). That rulemaking will allow for the Board's commitment to fund all phases of a reservoir project under the pre-design funding option from the Board's financial assistance programs other than the Water Infrastructure Fund.
Section 363.1207. The proposed amendment of §363.1207(a) changes these application deadlines from January 1 and July 1 to February 1 and August 1 of each year. Applications for financial assistance are prioritized twice each year and are funded based on available funds. Current §363.1207(a) requires that applications for financial assistance from the State Participation Account and Water Infrastructure Fund, respectively, be submitted on January 1 and July 1 of each year for prioritization. However, the Board believes that revising these deadlines will provide better management of the sale of bonds in coordination with the Board's fiscal year. The Board needs to make commitments early enough during each fiscal year so that the Board may sell its bonds within that fiscal year to raise funds for those commitments, utilizing legislative appropriations available during each fiscal year. In addition, the January 1 deadline is difficult for applicants to meet because of holidays. Thus, the proposed rulemaking changes these application deadlines from January 1 and July 1 to February 1 and August 1 of each year, so that the Board can prioritize the applications in March and September, to allow adequate time to make commitments and sell bonds before the end of each fiscal year. In addition, the proposed rulemaking provides that the Executive Administrator may set additional application deadlines, prioritize applications, and present those applications to the Board for a commitment if the Executive Administrator deems it necessary in order to utilize available funds in any fiscal year.
The proposed amendment of §363.1207(a) also allows the Executive Administrator to accept abridged applications for prioritization purposes, as long as those applications contain adequate information to establish that the applicant qualifies for state participation funding, to describe the project comprehensively, and to establish the cost of the project, as well as any other information requested by the Executive Administrator. Section 363.1207(a) currently requires a complete application for prioritization purposes, and many applicants have found this requirement burdensome, especially when the applicant might not be ranked high enough to receive funding, depending on the availability of funds. Therefore, the proposed amendments allow the Executive Administrator to accept abridged applications for prioritization purposes, as long as those applications contain adequate information necessary for prioritization purposes.
The proposed amendment of §363.1207(a) also adds a provision that an applicant must submit a complete application to the board within 30 days after the board meeting at which the project receives priority for funding, or the project may lose its priority ranking and the board may commit to other projects consistent with the prioritization.
The proposed amendment of §363.1207(b) deletes the requirement that the Executive Administrator provide the board a list of all completed applications, in order to be consistent with the proposed amendment of §363.1207(a) allowing the Executive Administrator to accept abridged applications for prioritization purposes. The amendment also adds language that clarifies that the Executive Administrator is to provide a prioritized list to the Board with applications recommended by the Executive Administrator.
The proposed amendment of §363.1207(c) deletes the requirement that Legislatively-mandated projects receive priority for financial assistance and move the requirement to §363.1208(a). Currently, §363.1207(c) contains the requirement that legislatively-mandated projects receive priority for financial assistance. However, the Executive Administrator should take this requirement into account when preparing the prioritized list under the prioritization criteria in §363.1208. Therefore, the proposed amendment moves this requirement to §363.1208(a) so that the Executive Administrator will prioritize the Legislatively-mandated projects first in the prioritized list that is presented to the Board under the procedures in §363.1006.
Section 363.1208. The proposed amendment of §363.1208(a) adds the requirement that the board will give priority to projects that the Legislature has determined shall receive priority for financial assistance from the Water Infrastructure Fund.
The proposed amendment of §363.1208(c) adds the provision that the median annual household income may also be calculated using data from a survey approved by the Executive Administrator of a statistically acceptable sampling of customers in the service area completed within the last 12 months. Currently, §363.1208(c) requires the use of U.S. Bureau of the Census data. The amendment is necessary because certain areas of the State might not be able to determine the median annual household income from available U.S. Bureau of the Census data.
FISCAL NOTE: COSTS TO STATE AND LOCAL GOVERNMENTS
Melanie Callahan, Chief Financial Officer, has determined that there will be no fiscal implications for state or local governments as a result of the proposed rulemaking.
PUBLIC BENEFITS AND COSTS
Ms. Callahan also has determined that for each year of the first five years the proposed rulemaking is in effect, the public will benefit from the rulemaking because it will clarify and enhance the efficiency of the Board's operations and will impose no new requirements on the public or persons required to comply with the rules.
LOCAL EMPLOYMENT IMPACT STATEMENT
The Board has determined that a local employment impact statement is not required because the proposed rules do not adversely affect a local economy in a material way for the first five years that the proposed rules are in effect because it will impose no new requirements on local economies.
The Board has determined that there will be no adverse economic effect on small businesses or micro-businesses as a result of enforcing this rulemaking. The Board has also determined that there is no anticipated economic cost to persons who are required to comply with the rulemaking as proposed. Therefore, no regulatory flexibility analysis is necessary.
REGULATORY IMPACT ANALYSIS
The Board has determined that the proposed rulemaking is not subject to Government Code §2001.0225 because it is not a major environmental rule under that section.
TAKINGS IMPACT ASSESSMENT
The Board has determined that the promulgation and enforcement of these proposed rule amendments will constitute neither a statutory nor a constitutional taking of private real property. The proposed rule amendments do not adversely affect a landowner's rights in private real property, in whole or in part, temporarily or permanently, because these proposed rule amendments do not burden nor restrict or limit the owner's right to property. Therefore, the proposed amendments do not constitute a taking under Texas Government Code, Chapter 2007.
SUBMITTAL OF COMMENTS
Comments on the proposed rulemaking will be accepted for 30 days following publication and may be submitted to Legal Services, Texas Water Development Board, P.O. Box 13231, Austin, Texas78711-3231, rulescomments@twdb.state.tx.us, or by fax at (512) 463-5580.
SUBCHAPTER J. STATE PARTICIPATION PROGRAM
STATUTORY AUTHORITY
This rulemaking is proposed under the authority of Texas Water Code §6.101, which authorizes the board to adopt rules necessary to carry out the powers and duties of the board; §15.977, which authorizes the board to adopt rules necessary to administer Texas Water Code, Chapter 15, Subchapter Q; and §15.995, which authorizes the board to adopt rules necessary to administer Texas Water Code, Chapter 15, Subchapter R.
Cross reference to statute: Texas Water Code, Chapters 15 and 17.
§363.1006.Prioritization System.
(a) The executive administrator will prioritize all
applications not previously considered by the board twice annually [on February 1 and August 1 of each year
]. An application must be submitted by February [January
] 1 to be prioritized in March [on February 1
]. An application must be submitted by August [July
] 1 to be prioritized in September [on August 1
]. The executive administrator
will provide the prioritization to the board for approval in
March and September [February and August
] of each year
or as soon thereafter as practicable. The executive administrator
may set additional application deadlines, prioritize applications,
and present the prioritization and those applications to the board
for a commitment if the executive administrator deems it necessary
in order to utilize available funds in any fiscal year. To be considered
for prioritization, an applicant must provide adequate information
to establish that the applicant qualifies for state participation
funding, to describe the project comprehensively, and to establish
the cost of the project, as well as any other information requested
by the executive administrator. The executive administrator will develop
and provide to applicants detailed information on the abridged application
necessary for prioritization. If an applicant submits an abridged
application for prioritization purposes, the applicant must submit
a complete application to the board within 30 days after the board
meeting at which the applicant's project received priority for funding,
or the project may lose its priority ranking and the board may commit
to other projects consistent with the prioritization.
(b) Prior to each board meeting at which applications may be considered, the executive administrator shall:
(1) for each application that the executive administrator
has determined has adequate information for prioritization purposes
[is complete
], prioritize the applications using the criteria
identified in §363.1007 of this title (relating to Prioritization
Criteria).
(2) provide to the board a prioritized list of all [
completed] applications as recommended by
the executive administrator, the amount of funds requested and
the priority of each application received; and
(3) identify to the board, the total amount of funds available in the State Participation Account for new applications.
(c) When making commitments for financial assistance
from the State Participation Account, [If there are funds
in the State Participation Account to fund all or part of any of the
projects for which the executive administrator has received completed
applications during the preceding six months,] the board will
[first] consider [any] projects [
that the
legislature has determined shall receive priority for financial assistance
from the State Participation Account. If, after considering projects
with legislative priority, there are funds available for other eligible
projects in the State Participation Account, then the board will consider
such other applications received by the executive administrator during
the preceding six month period] in descending numerical order
based on the priority assigned to the application according to §363.1007
of this title. The board will consider the next application on the
list only if there are funds available in the account to fund all
or, if acceptable to the applicant, a part of the application.
(d) (No change.)
§363.1007.Prioritization Criteria.
(a) The board will give priority to projects that the legislature has determined shall receive priority for financial assistance from the State Participation Account.
(b) After first prioritizing projects
that the legislature has determined shall receive priority, the [
The] factors to be used by the executive administrator to prioritize
the remaining projects seeking financial assistance from the
State Participation Account shall be as follows:
(1) water development projects will receive priority over wastewater projects;
(2) priority will be given to projects which result in the development of a new, usable supply of water;
(3) priority will be given to projects which have received previous board funding for facility planning, design, or permitting for the project;
(4) priority will be given to entities that:
(A) have already demonstrated significant water conservation savings; or
(B) will achieve significant water conservation savings by implementing the proposed project for which the financial assistance is sought.
(5) priority will be given to projects which have the earliest identifiable need, as outlined in the water plan.
This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of the Secretary of State on January 16, 2009.
TRD-200900212
Kenneth L. Petersen
General Counsel
Texas Water Development Board
Earliest possible date of adoption: March 1, 2009
For further information, please call: (512) 463-8061
STATUTORY AUTHORITY
This rulemaking is proposed under the authority of Texas Water Code §6.101, which authorizes the board to adopt rules necessary to carry out the powers and duties of the board; §15.977, which authorizes the board to adopt rules necessary to administer Texas Water Code, Chapter 15, Subchapter Q; and §15.995, which authorizes the board to adopt rules necessary to administer Texas Water Code, Chapter 15, Subchapter R.
Cross reference to statute: Texas Water Code, Chapters 15 and 17.
§363.1206.Pre-design Funding Option.
(a) (No change.)
(b) Reservoir projects are eligible for a board
commitment to fund planning, permitting, acquisition, and design costs [are not eligible for funding] under this option.
Applicants
for reservoir construction funds must complete planning, permitting,
acquisition, and design before receiving a commitment to fund reservoir
building costs.
(c) - (g) (No change.)
§363.1207.Prioritization System.
(a) The executive administrator will prioritize all
applications not previously considered by the board
twice annually [on February 1 and August 1 of each year
]. An application must be submitted by February [
January] 1 to be prioritized in March [on February 1
]. An application must be submitted by August [
July] 1 to be prioritized in September [
on August 1]. The executive administrator
will provide the prioritization to the board for approval in
March and October [February and August] of each year
or as soon thereafter as practicable. The executive administrator
may set additional application deadlines, prioritize applications,
and present the prioritization and those applications to the board
for a commitment if the executive administrator deems it necessary
in order to utilize available funds in any fiscal year. To be considered
for prioritization, an applicant must provide adequate information
to establish that the applicant qualifies for Water Infrastructure
Fund funding, to describe the project comprehensively, and to establish
the cost of the project, as well as any other information requested
by the executive administrator. The executive administrator will develop
and provide to applicants detailed information on the abridged application
necessary for prioritization. If an applicant submits an abridged
application for prioritization purposes, the applicant must submit
a complete application to the board within 30 days after the board
meeting at which the applicant's project received priority for funding,
or the project may lose its priority ranking and the board may commit
to other projects consistent with the prioritization.
(b) Prior to each board meeting at which applications may be considered for prioritization, the executive administrator shall:
(1) for each application that the executive administrator
has determined has adequate information for prioritization purposes
[is complete
], prioritize the applications by the criteria identified
in §363.1208 of this title (relating to Prioritization Criteria).
(2) provide to the board a prioritized list of all [
completed] applications as recommended by
the executive administrator, the amount of funds requested and
the priority of each application received and
(3) identify [to the board,] the total amount
of funds available in the Water Infrastructure Fund for new applications.
(c) If there are funds in the Water Infrastructure
Fund available for all or part of any of the prioritized projects,
[to fund all or part of any of the projects for which the executive
administrator has received completed applications during the preceding
six months,] the board will first consider any projects that
the legislature has determined shall receive priority for financial
assistance from the Water Infrastructure Fund. If, after considering
projects with legislative priority, there are funds available for
other eligible projects in the Water Infrastructure Fund, then the
board will consider applications to make a commitment for financial
assistance [such other applications received by the executive
administrator during the preceding six month period] in descending
order of priority according to §363.1208 of this title. The board
will consider the next application on the list only if there are funds
available in the account to fund all or, if acceptable to the applicant,
a part of the application.
§363.1208.Prioritization Criteria.
(a) The board will give priority to projects that
the legislature has determined shall receive priority for financial
assistance from the Water Infrastructure Fund. Applicants who
have applied and were eligible for Economically Distressed Areas Program
funding under §363.512 of this title (relating to Projects Related
to Implementation of the Water Plan), and where sufficient funds are
not available in the program to fund the project, will be given
priority [first
] consideration for funding under this subchapter
after projects with legislative priority.
(b) After prioritizing projects under subsection
(a) of this section, the executive administrator will prioritize
[Notwithstanding subsection (a) of this section,
] applications [shall be prioritized
] based on the number of factors met
by the project seeking financial assistance. The following factors
shall be considered by the executive administrator [
Executive Administrator] when ranking the applications:
(1) projects which result in the development of a new, usable supply of water;
(2) projects which have the earliest identified need, as identified in the water plan; and
(3) entities that:
(A) have already demonstrated significant water conservation savings; or
(B) will achieve significant water conservation savings by implementing the proposed project for which the financial assistance is sought.
(c) If two or more projects receive the same priority ranking, priority will be given to the project having the service area with the lowest median annual household income, weighted by population of each of the areas served, based upon the most current data available from the U.S. Bureau of the Census for all the areas to be served by the project. The median annual household income may also be calculated using data from a survey approved by the executive administrator of a statistically acceptable sampling of customers in the service area completed within the last 12 months.
This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of the Secretary of State on January 16, 2009.
TRD-200900213
Kenneth L. Petersen
General Counsel
Texas Water Development Board
Earliest possible date of adoption: March 1, 2009
For further information, please call: (512) 463-8061
SUBCHAPTER I. PROVISIONS RELATING TO APPLICATIONS FOR FINANCIAL ASSISTANCE UNDER SPECIAL CAPITALIZATION GRANTS; EXPEDITED REVIEW, PROCESSING AND LOAN CLOSING REQUIREMENTS
The Texas Water Development Board (board) proposes to add a new Subchapter I, §§371.200 - 371.208, to Chapter 371, relating to the Drinking Water State Revolving Fund, in order to provide for an expedited financial application review, processing and closing process for applications which have been filed in response to special federal capitalization grants for emergency events, economic recovery efforts and similar special initiatives. The purpose of these proposed rules is to provide the board with appropriate flexibility in complying with terms and conditions required for special funding in order to ensure that the funding is fully utilized to the benefit of the state's political subdivisions.
The board proposes new §371.200 (relating to Purpose) in order to make clear that the provisions of the Subchapter I are to be interpreted and applied in a manner that fully supports whatever flexibility is necessary and appropriate to implement the terms and conditions of any special capitalization grant.
The board proposes new §371.201 (relating to Definitions) to define the terms "capitalization grant", "emergency event" and "ready to proceed". The term "capitalization grant" means a capitalization grant funded by a special appropriation from the United States Congress for any special purpose, including, but not limited to, responding to emergency events and supporting economic recovery efforts. The term "emergency event" shall be broadly defined to include natural disasters such as hurricanes, tornadoes, flooding events, earthquakes, prolonged drought conditions and other natural disasters as well as man-made disasters, acts of terrorism or enemy attacks that result in damage to or the impairment of a public water supply system. The term "ready to proceed" means that a project has all of the approvals required in this chapter needed in order to commence construction.
The board proposes new §371.202 (relating to Eligibility Requirements) to define those projects and activities that are eligible for this expedited application review, processing and closing process. All projects must be listed on an intended use plan for the Drinking Water State Revolving Fund program and must further be related to or arising from an emergency event(s) or an economic recovery initiative or other special purpose being implemented by the EPA or other federal agency through a capitalization grant agreement executed by and between the board and the EPA.
The board proposes new §371.203 (relating to Intended Use Plan) to provide procedures to develop an IUP as necessary to implement any special capitalization grant. The intended use plan will identify those projects anticipated to receive assistance from funds available under the capitalization grant. The list of projects in the IUP, which shall be presented by priority ranking, may also serve as a project priority list if required by the capitalization grant.
The board proposes new §371.204 (relating to Applicable Rules) to provide that the rules governing applications for funding from the state's Drinking Water State Revolving Fund will be generally applicable to an application for expedited review, processing and closing under this subchapter, except as provided otherwise in this subchapter.
The board proposes new §371.205 (relating to Review of Applications by Executive Administrator) to explain the manner in which the staff intends to review and process the incoming applications seeking expedited review. The executive administrator shall review the application to determine whether it is administratively complete and shall request any additional information needed in order to process the application as soon as practicable. Such information shall be provided within the timeframe specified by the executive administrator. Once administratively and technically complete, the application will be scheduled for board consideration.
The board proposes new §371.206 (relating to Formal Action by the Board) to specify the manner in which applications undergoing expedited review and processing under this subchapter will be considered by the Board. The executive administrator shall present the application to the Board as soon as practicable after the application has been deemed administratively complete, the project has been deemed eligible for funding and the project has been deemed to be technically feasible. The applicant and other interested parties known to the board will be notified of the time and place of the board meeting prior to the meeting and arguments both for and against the issuance of the loan commitment may be made at that time.
At the conclusion of the meeting, the board will have the authority to approve, disapprove, amend or continue consideration of the application. The board may only approve the application if it finds that the revenue and/or taxes pledged by the applicant will be sufficient to meet all obligations assumed by the applicant. The commitment will specify the applicable commitment period, after which time the commitment expires.
The board proposes new §371.207 (relating to Lending Rates) to define pertinent terms and to establish procedures that will be used to set lending rates for projects arising from emergency events, economic recovery efforts, or other special purposes consistent with the terms of the capitalization grant. In establishing the procedure to be used to set rates for applications processed under this subchapter, the executive administrator shall set interest rates for loans under this subchapter based upon costs of funds to the board, risk factors associated with managing the board's loan portfolio, market rate scales, and other factors consistent with the capitalization grant. In terms of timing, the executive administrator will set rates for loans on a date that is five (5) business days prior to the adoption of the political subdivision's bond ordinance or resolution or the execution of a loan agreement; and not more than 45 days before the anticipated closing of the loan from the board. After 45 days from the assignment of the interest rate on the loan, the rates may only be extended with the executive administrator's approval.
The board proposes a new §371.208 (relating to Waiver of Rules) to allow the provisions of this subchapter to be waived or modified by the executive administrator as necessary and appropriate to implement the terms of the capitalization grant or to comply with the conditions of the capitalization grant agreement. The board must find that all waivers or modifications of this subchapter are necessary and appropriate to implement the terms of the capitalization grant or to comply with the conditions of the capitalization grant agreement prior to approving an application for financial assistance using this expedited review, processing and closing process.
Mr. Gregory Kuchy, P.E., Deputy Executive Administrator, has determined that for the first five years the sections are in effect, there will be no significant fiscal implications for state or local governments as a result of implementing the amendment to this section.
Mr. Kuchy has determined that for the first five years the sections are in effect there are not expected to be any reductions in the cost to the state or to local governments as the result of administering the rule.
Mr. Kuchy has determined that during the first five years the sections are in effect that there is not expected to be any increase in or loss of revenue to the state or local governments as the result of administering the rule.
Mr. Kuchy has also determined that for each year of the first five years the sections are in effect, the public benefit will be better assurance that any special appropriation made available to the state will be fully utilized to the benefit of the state and its political subdivisions. Further, Mr. Kuchy has determined that there is no economic cost to the board or any effect on small business or micro-business. There is no anticipated economic cost to persons who are required to comply with the proposed section.
Comments on the proposal will be accepted for 30 days following publication and may be submitted to Michelle A. McFaddin, Staff Attorney, Legal Services, Texas Water Development Board, P.O. Box 13231, Austin, Texas 78711-3231, by e-mail to rulescomments@twdb.state.tx.us or by fax at (512) 463-5580.
Statutory authority: Water Code, §6.101 and §15.605.
Statute affected: Water Code, Chapter 15, Subchapter J.
Cross reference to statute: Water Code, Chapter 15, Subchapter J.
§371.200.Purpose.
It is the purpose of this subchapter to specify flexibility in providing financial assistance made available under a special capitalization grant as necessary and appropriate to the terms of that capitalization grant or the requirements of any capitalization grant agreement to the greatest extent necessary. The provisions of this subchapter should be interpreted and applied in order to fully utilize the funds made available for the benefit of the state and its political subdivisions.
§371.201.Definitions.
In addition to the definitions at §371.2 of this title (relating to Definition of Terms), the following terms, when used in this subchapter, shall have the following meanings:
(1) Capitalization grant--a capitalization grant funded by special appropriation by the United States Congress for any special purpose, including but not limited to responding to emergency events and supporting economic recovery.
(2) Emergency event--a natural disaster such as a hurricane, tornado, significant flooding event, prolonged drought or other natural disaster or a man-made disaster, an act of terrorism or an enemy attack that results in damage to or impairment of a public water supply system.
(3) Ready to proceed--a project has all of the approvals required in this chapter needed in order to commence construction.
§371.202.Eligibility Requirements.
(a) This subchapter shall apply to all applications for financial assistance filed by political subdivisions for projects that are listed in a Drinking Water State Revolving Fund intended use plan (IUP). The expedited process established in this subchapter is intended to streamline the processing of financial assistance applications filed for financing opportunities available under special capitalization grant(s) made available by the Environmental Protection Agency or other federal agencies to the board for purposes including, but not limited to, responding to emergency events or implementing federal economic recovery projects.
(b) In addition to other eligible projects, eligible projects may include the rehabilitation and/or replacement of or upgrades to water collection, distribution and treatment facilities, units and any appurtenant equipment.
(c) Specific eligibility requirements may be specified by the executive administrator consistent with the terms of the capitalization grant.
§371.203.Intended Use Plan.
(a) The board shall prepare an intended use plan (IUP) in cooperation with Texas Commission on Environmental Quality (TCEQ) to meet the requirements of the capitalization grant. The IUP will identify those projects anticipated to receive assistance from funds available under the capitalization grant. The list of projects in the IUP, which shall be presented by priority ranking, may also serve as a project priority list if required by the capitalization grant.
(b) The process for listing projects in the IUP shall be as follows.
(1) As necessary, the executive administrator will provide written notice and solicit project information from entities desiring to receive funding commitments. The notice shall include the form(s) to be used to submit information needed to rate the project and the deadline by which such rating information must be submitted in order for project to be rated and included in the IUP. The required project information shall include, at a minimum, the following:
(A) the information needed to rate the project;
(B) a description of the proposed facilities;
(C) a description of any required permits, licenses, registrations and other legal authorizations;
(D) the estimated total project cost;
(E) an estimated schedule for construction of the proposed project;
(F) whether the applicant is under enforcement by the TCEQ or the EPA;
(G) for those potential applicants with existing populations of 25,000 or fewer, information regarding whether the community is eligible to receive funding as a disadvantaged community as defined in §371.24 of this title (relating to Disadvantaged Community Program through Loan Subsidies);
(H) a statement that the project is ready to proceed to construction with sufficient detail to support and justify the expedited review process; and
(I) such other information as may be requested by the executive administrator.
(2) The required information must be submitted not later than the deadline specified in the most recent written notice.
(c) Subsequent to adoption of an IUP, the nature of a proposed project included in the IUP may change with written approval of the executive administrator consistent with the terms of the capitalization grant:
(d) If any changes are proposed to the project which would result in a change to the rating score, the project must be re-ranked in the IUP. In this case, the availability of funds will be determined based on the revised rating score.
(e) The IUP will be presented for adoption to the board at a scheduled meeting at which time the board will receive public comment before adopting the plan.
(f) The executive director may revise the rating process established in §371.19 of this title (relating to Rating Process) for those applicants seeking an expedited review under this subchapter provided that this revised process is consistent with the capitalization grant and is approved by the board.
§371.204.Applicable Rules.
(a) An application shall comply with the requirements of this Chapter 371, Subchapters A - H, except as otherwise provided in Subchapter I or specified by the executive administrator.
(b) In addition to requirements for applications incorporated under subsection (a) of this section, an application under this subchapter shall include a brief description of the project including, but not limited to, the following:
(1) the need for the project;
(2) that the project is consistent with the purposes of the capitalization grant, as defined by terms of the capitalization grant agreement and as determined by the board;
(3) that the project is ready to proceed to construction with sufficient detail to support and justify the expedited review process;
(4) that the applicant will comply with Disadvantaged Business Enterprise "fair share" goals in procuring the project contractors and subcontractors unless expressly waived by the terms of the capitalization grant;
(5) that applications have been filed and/or granted for all applicable local, state and federal permitting, licensing and registration permits, licenses, registrations and other legal authorizations required for the construction and operation of the project; and
(6) that provides the status of any environmental review activities performed in accordance with or in response to the environmental review requirements set forth in §371.35 of this title (relating to Required Environmental Review and Determinations).
§371.205.Expedited Review of Applications by the Executive Administrator.
The executive administrator will commence a review for administrative completeness as soon as practicable upon receipt of the application and may request any modifications or additional information to ensure consistency with the requirements of this subchapter and the terms of the capitalization grant. The applicant shall respond to any request for modification or for additional information within the timeframe specified in the executive administrator's request. Once the application has been deemed to be administratively complete, the executive administrator will commence an technical review of the project to ensure that it is eligible for processing under this subchapter and that the project is feasible. When this technical review is complete, the application shall be scheduled for board consideration.
§371.206.Formal Action by the Board.
(a) Presentation to board. The executive administrator shall present the application to the board after completing a review of the application. The applicant and other interested parties known to the board shall be notified of the time and place of such meeting. Evidence and arguments both for and against the granting of the application may be heard at such meeting.
(b) Action by board. At the conclusion of the meeting to consider the project, the board may resolve to approve, disapprove, amend, or continue consideration of the application. The board shall approve an application only if the board finds that in its opinion the revenue or taxes or both revenue and taxes pledged by the applicant will be sufficient to meet all obligations assumed by the applicant and the assistance requested meets the requirements of the federal act and state law.
(c) Commitment period. Loan approval action will specify the commitment period consistent with the terms of the capitalization grant, after which time the commitment shall expire.
§371.207.Lending Rates.
(a) Procedure for setting interest rates.
(1) The executive administrator shall establish a procedure to set a lending rate for projects that is consistent with the terms of the capitalization grant, to be considered by the board in approving the application.
(2) In establishing the procedure for setting interest rates, the executive administrator may consider factors that include, but are not necessarily limited to:
(A) the market rate for the borrower;
(B) the amount of adjustment from the market interest rate appropriate for the borrower;
(C) the identified interest rate adjustment to the market rate for the borrower needed to determine the loan interest rate, and;
(D) may apply the loan interest rate to the proposed principal schedule.
(3) The executive administrator will set rates for loans on a date that is:
(A) five business days prior to the adoption of the political subdivision's bond ordinance or resolution or the execution of a loan agreement; and
(B) not more than 45 days before the anticipated closing of the loan from the board.
(4) After 45 days from the assignment of the interest rate on the loan, rates may be extended only with the executive administrator's approval.
(b) The board, based on the procedure established by the executive administrator under subsection (a) of this section, will set interest rates for loans under this subchapter based upon costs of funds to the board, risk factors associated with managing the board's loan portfolio, market rate scales, and other factors consistent with the capitalization grant.
§371.208.Waiver of Rules.
(a) Any of the provisions of this subchapter may be waived or modified by the executive administrator as necessary and appropriate to implement the terms of the capitalization grant or to comply with the requirements of the capitalization grant agreement.
(b) The board must find that all waivers or modifications of this subchapter are necessary and appropriate to implement the terms of the capitalization grant or to comply with the requirements of the capitalization grant agreement prior to approving an application for financial assistance.
This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of the Secretary of State on January 15, 2009.
TRD-200900202
Kenneth L. Petersen
General Counsel
Texas Water Development Board
Earliest possible date of adoption: March 1, 2009
For further information, please call: (512) 463-8061
The Texas Water Development Board (board) proposes an amendment to §375.2 and new §§375.400 - 375.408. The board proposes to add a new Subchapter D, §§375.400 - 375.408, to 31 Texas Administrative Code (TAC) Chapter 375, relating to Clean Water State Revolving Fund, in order to provide for an expedited financial application review, processing and closing process for applications which have been filed in response to special federal capitalization grants for emergency events, economic recovery efforts and similar special initiatives. The purpose of these proposed rules is to provide the board with appropriate flexibility in complying with terms and conditions required for special funding in order to ensure that the funding is fully utilized to the benefit of the state's political subdivisions.
Specifically, the board proposes to amend 31 TAC §375.2(17) relating to the term "construction" to more closely track the definition of "construction" found in §212(1) of the Federal Water Pollution Control Act, as amended. In addition to benefitting the administration of the traditional Clean Water State Revolving Fund by expanding the scope of eligible projects, the amended definitions will expand the scope of projects eligible for special capitalization grant funding.
The board proposes to amend 31 TAC §375.2(67) relating to the term "treatment works" to more closely track the definition of "treatment works" found in §212(2)(A) and (B) of the Federal Water Pollution Control Act, as amended, as incorporated by §15.602, Water Code. The proposed revisions to the board's definition of "treatment works" will explicitly allow funding for the preventing, abating, reducing, storing, treating, separating, or disposing of storm water runoff and waste combined in storm water and sanitary sewer systems, the type of projects that often arise in response to emergency events.
The board also proposes to add a new Subchapter D, §§375.400 - §375.408, in order to provide an expedited financial application review, processing and closing process for those applications for financial assistance that have been filed in response to emergency events, economic recovery efforts and similar special initiatives for which the board has received a capitalization grant.
The board proposes new §375.400 (relating to Purpose) in order to make clear that the provisions of subchapter D are to be interpreted and applied in a manner that fully supports whatever flexibility is necessary and appropriate to implement the terms and conditions of any special capitalization grant.
The board proposes new §375.401 (relating to Definitions) to define the terms "capitalization grant", "emergency event" and "ready to proceed". The term "capitalization grant" means a capitalization grant funded by special appropriation by the United States Congress for any special purpose, including, but not limited to, responding to emergency events and supporting economic recovery initiatives. The term "emergency event" shall be broadly defined to include natural disasters such as hurricanes, tornadoes, flooding events, prolonged drought conditions, earthquakes and other natural disasters as well as man-made disasters, acts of terrorism or enemy attacks that result in damage to or the impairment of publicly-owned wastewater collection, distribution and treatment works. The term "ready to proceed" means that a project has all of the approvals required in this chapter needed in order to commence construction.
The board proposes new §375.402 (relating to Eligibility Requirements) to define those projects and activities that are eligible for this expedited application review, processing and closing process. All projects must be listed on an intended use plan for the Clean Water State Revolving Fund program and must further be related to or arising from an emergency event(s) or an economic recovery initiative or other special purpose being implemented by the EPA or other federal agency through a capitalization grant agreement executed by and between the board and the federal agency. Activities which are eligible for funding are broadly defined as any activities, including but not necessarily limited to, collection and distribution system upgrades, equipment upgrades and replacements, treatment system rehabilitation and improvements and other related activities that will address damage to or impairment of wastewater collection, distribution and treatment facilities.
The board proposes new §375.403 (relating to Intended Use Plan) to provide procedures to develop an IUP as necessary to implement any special capitalization grant. The intended use plan will identify those projects anticipated to receive assistance from funds available under the capitalization grant. The list of projects in the IUP, which shall be presented by priority ranking, may also serve as a project priority list if required by the capitalization grant.
The board proposes new §375.404 (relating to Applicable Rules) to provide that the rules governing applications for funding from the state's Drinking Water State Revolving Fund will be generally applicable to an application for expedited review, processing and closing under this subchapter, except as provided otherwise in this subchapter.
The board proposes new §375.405 (relating to Review of Applications by Executive Administrator) to explain the manner in which the staff intends to review and process the incoming applications seeking expedited review. The executive administrator shall review the application to determine whether it is administratively complete and shall request any additional information needed in order to process the application as soon as practicable. Such information shall be provided within the timeframe specified by the executive administrator. Once administratively and technically complete, the application will be scheduled for Board consideration.
The board proposes new §375.406 (relating to Formal Action by the Board) to specify the manner in which applications undergoing expedited review and processing under this subchapter will be considered by the Board. The executive administrator shall present the application to the Board as soon as practicable after the application has been deemed administratively complete, the project has been deemed eligible for funding and the project has been deemed to be technically feasible. The applicant and other interested parties known to the board will be notified of the time and place of the board meeting prior to the meeting and arguments both for and against the issuance of the loan commitment may be made at that time.
At the conclusion of the meeting, the board will have the authority to approve, disapprove, amend or continue consideration of the application. The board may only approve the application if it finds that the revenue and/or taxes pledged by the applicant will be sufficient to meet all obligations assumed by the applicant. The commitment will specify the applicable commitment period, after which time the commitment expires.
The board proposes new §375.407 (relating to Lending Rates) to define pertinent terms and to establish the procedures that will be used to set lending rates for projects arising from emergency events, economic recovery efforts, or other special purpose consistent with the terms of the capitalization grant. In establishing the procedure to be used to set rates for applications processed under this subchapter, the executive administrator shall consider factors that include, but are not necessarily limited to, the appropriate market rate for the borrower, the amount of adjustment from the market interest rate that may be appropriate for the borrower, any interest rate adjustment to the market rate for the borrower that may be required in order to determine the loan interest rate, and the manner in which that loan interest rate should be applied to the proposed principal schedule. In terms of timing, the executive administrator will set rates for loans on a date that is five (5) business days prior to the adoption of the political subdivision's bond ordinance or resolution or the execution of a loan agreement; and not more than 45 days before the anticipated closing of the loan from the board. After 45 days from the assignment of the interest rate on the loan, the rates may only be extended with the executive administrator's approval.
Finally, the board proposes a new §375.408 (relating to Waiver of Rules) to allow the provisions of this chapter to be waived or modified by the executive administrator as necessary and appropriate to implement the terms of the capitalization grant or to comply with the conditions of the capitalization grant agreement. The board must find that all waivers or modifications of this subchapter are necessary and appropriate to implement the terms of the capitalization grant or to comply with the conditions of the capitalization grant agreement prior to approving an application for financial assistance using this expedited review, processing and closing process.
Mr. Gregory Kuchy, P.E., Deputy Executive Administrator, has determined that for the first five-year period the amendments are in effect, there will be no fiscal implications on state and local government as a result of the implementation of the amended sections.
Mr. Kuchy has also determined that for each year of the first five years the section is in effect, the public benefit will be better assurance that any special appropriation made available to the state will be fully utilized to the benefit of the state and its political subdivisions. Further, Mr. Kuchy has determined that there is no economic cost to the board or any effect on small business. There is no anticipated economic cost to persons who are required to comply with the proposed section.
Comments on the proposal will be accepted for 30 days following publication and may be submitted to Michelle A. McFaddin, Staff Attorney, Legal Services, Texas Water Development Board, P.O. Box 13231, Austin, Texas 78711-3231, by e-mail to rulescomments@twdb.state.tx.us or by fax at (512) 463-5580.
SUBCHAPTER A. GENERAL PROVISIONS
Statutory authority: Water Code, §6.101 and §15.605.
Statute affected: Water Code, Chapter 15, Subchapter J.
Cross reference to statute: Water Code, Chapter 15, Subchapter J.
§375.2.Definitions of Terms.
The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise. Words defined in the Texas Water Code, Chapter 15 and not defined here shall have the meanings provided by the chapter or subchapter as appropriate.
(1) - (16) (No change.)
(17) Construction--Any one or more of the following:
(A) preliminary planning to determine the feasibility
of treatment works [a project];
(B) engineering, architectural, environmental, legal, title, fiscal, or economic investigations or studies;
[(C) the expense of any condemnation
or other legal proceeding;]
(C) [(D)] surveys, designs, plans,
working drawings, specifications, procedures, field testing of
innovative or alternative waste water treatment processes and techniques
pursuant to section 1314(d)(3) of the Act; and
(D) other necessary actions, erection, building, acquisition, alternation, remodeling, improvement, or extension of treatment works, or the inspection or supervision of any of the foregoing items.
[(E) the building of a project or the
inspection or supervision of any of the foregoing items.]
(18) - (66) (No change.)
(67) Treatment works--Any devices and systems which are used in the storage, treatment, recycling, and reclamation of waste or which are necessary to recycle or reuse water at the most economical cost over the estimated life of the works, including intercepting sewers, outfall sewers, sewage collection systems, pumping, power, and other equipment and their appurtenances; extensions, improvements, remodeling, additions, and alterations thereof; elements essential to provide a reliable recycled supply such as standby treatment units and clear well facilities; and any works, including site acquisition of the land that will be an integral part of, or used in connection with, the treatment process (including land used for the storage of treated water in land treatment systems prior to land application) or is used for ultimate disposal of residues resulting from such treatment; or facilities to provide for the collection, control, and disposal of waste. The term also means any other method or system for preventing, abating, reducing, storing, treating, separating, or disposing of municipal waste, including storm water runoff; and waste combined in storm water and sanitary sewer systems, the type of projects that often arise in response to emergency events.
(68) - (72) (No change.)
This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of the Secretary of State on January 15, 2009.
TRD-200900204
Kenneth L. Petersen
General Counsel
Texas Water Development Board
Earliest possible date of adoption: March 1, 2009
For further information, please call: (512) 463-8061
Statutory authority: Water Code, §6.101 and §15.605.
Statute affected: Water Code, Chapter 15, Subchapter J.
Cross reference to statute: Water Code, Chapter 15, Subchapter J.
§375.400.Purpose.
It is the purpose of this subchapter to specify flexibility in providing financial assistance made available under a special capitalization grant as necessary and appropriate to the terms of that capitalization grant or the requirements of any capitalization grant agreement to the greatest extent necessary. The provisions of this subchapter should be interpreted and applied in order to fully utilize the funds made available for the benefit of the state and its political subdivisions.
§375.401.Definitions.
In addition to the definitions at §375.2 of this chapter (relating to Definitions of Terms), the following terms, when used in this subchapter, shall have the following meanings:
(1) Capitalization grant--A capitalization grant funded by special appropriation enacted by the United States Congress for any special purpose, including, but not limited to, to respond to emergency events or to implement an economic recovery program.
(2) Emergency event--A natural disaster such as a hurricane, tornado, significant flooding event, prolonged drought, earthquake or other natural disaster or man-made disaster such as an act of terrorism or an enemy attack that results in damage to or impairment of a publicly-owned wastewater collection, distribution and treatment system.
(3) Ready to proceed--A project that has all of the approvals required in this chapter needed in order to commence construction.
§375.402.Eligibility Requirements.
(a) This subchapter shall apply to all applications for financial assistance filed by political subdivisions for projects that are listed in a Clean Water State Revolving Fund intended use plan (IUP). The expedited process established in this subchapter is intended to streamline the processing of financial assistance applications filed for financing opportunities available under special capitalization grant(s) made available by the EPA or other federal agencies to the board for purposes including, but not limited to, responding to emergency events or implementing federal economic recovery projects.
(b) In addition to other eligible projects, eligible projects may include the rehabilitation and/or replacement of or upgrades to wastewater collection, distribution and treatment facilities, units and any appurtenant equipment.
(c) Specific eligibility requirements may be specified by the executive administrator consistent with the terms of the capitalization grant.
§375.403.Intended Use Plan.
(a) The board shall prepare an intended use plan to meet the requirements of the capitalization grant. The intended use plan (IUP) will identify those projects anticipated to receive assistance from funds available under the capitalization grant. The list of projects in the IUP, which shall be presented by priority ranking, may also serve as a project priority list if required by the capitalization grant.
(b) The process for listing projects in the intended use plan shall be as follows.
(1) As necessary, the executive administrator will provide written notice and solicit project information from entities desiring to receive funding commitments. The notice shall include the form(s) to be used to submit information needed to rate the project and the deadline by which such rating information must be submitted in order for project to be rated and included in the intended use plan. The required project information shall include, at a minimum, the following:
(A) the information needed to rate the project;
(B) a description of the proposed facilities;
(C) a description of any required permits, licenses, registrations and other legal authorizations, including any projected effluent limitations that may be required in any permit or registration issued by the Texas Commission on Environmental Quality (TCEQ) or the EPA;
(D) the estimated total project cost;
(E) an estimated schedule for construction of the proposed project;
(F) whether the applicant is under enforcement by the TCEQ or the EPA;
(G) for those potential applicants with existing populations of 25,000 or fewer, information regarding whether the community is eligible to receive funding as a disadvantaged community as defined in §375.19 of this chapter (relating to Financial assistance for projects benefiting disadvantaged communities); and
(H) such other information as may be requested by the executive administrator.
(2) The required information must be submitted not later than the deadline specified in the written notice.
(c) Subsequent to adoption of an intended use plan, the nature of a proposed project included in the intended use plan may change with written approval of the executive administrator consistent with the terms of the capitalization grant.
(d) If any changes are proposed to the project which would result in a change to the rating score, the project must be re-ranked in the intended use plan. In this case, the availability of funds will be determined based on the revised rating score.
(e) The intended use plan will be presented for adoption to the board at a scheduled meeting at which time the board will receive public comment before adopting the plan. Notice of this meeting shall be afforded to the public, the applicant and other known, interested parties prior to the Board meeting at which the intended use plan will be considered for adoption.
(f) The executive director may revise the rating process established in §375.16 of this chapter (relating to Rating Process) for those applicants seeking an expedited review under this subchapter provided that this revised process is consistent with the capitalization grant and is approved by the board.
§375.404.Applicable Rules.
(a) An application shall comply with the requirements of Chapter 375, Subchapters A, B and C, except as otherwise provided in this subchapter or specified by the executive administrator.
(b) In addition to requirements for applications incorporated under subsection (a) of this section, an application under this subchapter shall include a brief description of the project including, but not limited to, the following:
(1) the need for the project;
(2) that the project is consistent with the purposes of the capitalization grant, as defined by terms of the capitalization grant agreement and as determined by the board;
(3) that the project is ready to proceed to construction with sufficient detail to support and justify the expedited review process;
(4) that the applicant will comply with Disadvantaged Business Enterprise "fair share" goals in procuring the project contractors and subcontractors unless expressly waived by the terms of the capitalization grant;
(5) that applications have been filed and/or granted for all applicable local, state and federal permitting, licensing and registration permits, licenses, registrations and other legal authorizations required for the construction and operation of the project; and
(6) that provides the status of any environmental review activities performed in accordance with or in response to the environmental review requirements set forth in §375.35 of this chapter (relating to Required Environmental Review and Determination).
§375.405.Review of Applications by the Executive Administrator.
The executive administrator will commence review for administrative completeness as soon as practicable upon receipt of the application and may request any modifications or additional information to ensure consistency with the following: Subchapters A, B and C of this chapter as well as §375.404 of this subchapter (relating to Applicable Rules). The applicant shall respond to any request for modification or for additional information within the timeframe specified in the executive administrator's request. Once the application has been deemed to be administratively complete, the executive administrator will commence a technical review of the project to ensure that it is eligible for processing under this subchapter and that the project is feasible. When this technical review is complete, the application shall be scheduled for board consideration.
§375.406.Formal Action by the Board.
(a) Presentation to board. The executive administrator shall present the application to the board after completing a review of the application. The applicant and other interested parties known to the board shall be notified of the time and place of such meeting. Evidence and arguments both for and against the granting of the application may be heard at such meeting.
(b) Action by board. At the conclusion of the meeting to consider the project, the board may resolve to approve, disapprove, amend, or continue consideration of the application. The board shall approve an application only if the board finds that in its opinion the revenue or taxes or both revenue and taxes pledged by the applicant will be sufficient to meet all obligations assumed by the applicant.
(c) Commitment period. Loan approval action will specify the commitment period consistent with the terms of the capitalization grant, after which time the commitment shall expire.
§375.407.Lending Rates.
(a) Procedure for setting interest rates.
(1) The executive administrator shall establish a procedure to set a lending rate for projects that is consistent with the terms of the capitalization grant, to be considered by the board in approving the application.
(2) In establishing the procedure for setting interest rates, the executive administrator may consider factors that include, but are not necessarily limited to, the market rate for the borrower, the amount of adjustment from the market interest rate appropriate for the borrower, the identified interest rate adjustment to the market rate for the borrower needed to determine the loan interest rate, and may apply the loan interest rate to the proposed principal schedule.
(3) The executive administrator will set rates for loans on a date that is:
(A) five business days prior to the adoption of the political subdivision's bond ordinance or resolution or the execution of a loan agreement; and
(B) not more than 45 days before the anticipated closing of the loan from the board.
(4) After 45 days from the assignment of the interest rate on the loan, rates may be extended only with the executive administrator's approval.
(b) The board, based on the procedure established by the executive administrator under subsection (a) of this section, will set interest rates for loans under this subchapter based upon costs of funds to the board, risk factors associated with managing the board's loan portfolio, market rate scales, and other factors consistent with the capitalization grant.
§375.408.Waiver of rules.
(a) Any of the provisions of this subchapter may be waived or modified by the executive administrator as necessary and appropriate to implement the terms of the capitalization grant or to comply with the requirements of the capitalization grant agreement.
(b) The board must find that all waivers or modifications of this subchapter are necessary and appropriate to implement the terms of the capitalization grant or to comply with the requirements of the capitalization grant agreement prior to approving an application for financial assistance.
This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of the Secretary of State on January 15, 2009.
TRD-200900203
Kenneth L. Petersen
General Counsel
Texas Water Development Board
Earliest possible date of adoption: March 1, 2009
For further information, please call: (512) 463-8061