1. (a) The capital improvements plan CWSRF loan processing option will provide applicants an alternative to secure loan proceeds for eligible projects that meet the criteria of §375.13 of this title (relating to Activities Funded) under the applicant's capital improvements plan. This option is a two-step loan processing method. First, an applicant will provide applicable information to the board for preliminary eligibility determination under subsection (b) of this section. Second, an applicant will submit a financial application in order to apply for financing under subsection (d) of this section. Under the capital improvements plan option, a loan may be closed: after bids are approved and prior to construction commencing as specified in §375.71 of this title (relating to Loan Closing) and §375.72 of this title (relating to Release of Funds); or utilizing the pre-design funding option as specified in §375.39 of this title (relating to Pre-Design Funding Option). This capital improvements plan option may be used for the purpose of reimbursement of system revenues and/or refinancing of interim financing, including commercial paper expended for approved project(s). General procedures and requirements for processing a loan application under the capital improvements plan option are described in subsections (b), (c) and (d) of this section.

2. (b) An applicant will request a preliminary eligibility determination from the board on the project(s) described in the applicant's capital improvements plan or similar document addressing capital improvement planning.

   1. (1) The board's action of preliminary eligibility determination will:

      1. (A) authorize board staff to expend agency resources to review and approve project documents as described in subsection (c) of this section for the proposed capital improvements plan;
      2. (B) establish that those portions of project(s) and costs approved in the preliminary eligibility determination are eligible for CWSRF financing provided that the requirements in subsection (c) of this section are met; and
      3. (C) acknowledge the applicant's intention to construct the project(s) in the capital improvements plan and to seek financial assistance to finance, including refinancing all or part of, those project(s).
   2. (2) The board's action of preliminary eligibility determination will provide no financial commitment by the board to the project(s) in the capital improvements plan.

   3. (3) Requests for preliminary eligibility determination must include:

      1. (A) a capital improvements plan or similar information which includes a description and purpose of the project(s), area maps or drawings which adequately locate the project area(s), a proposed project schedule, estimated project costs and sources of funds;
      2. (B) a forecast of system cash flow, timing and approximate amount of financial assistance to be requested from the CWSRF, and a description of any intention to use the CWSRF loan proceeds to refinance existing interim debt obligations, including a description of the debt obligations, interfund transfers or internal methods of finance;
      3. (C) a discussion of known permitting, social or environmental issues which may affect the alternatives considered and the implementation of the proposed project and any environmental information which may already be prepared pertaining to the proposed project(s) included in the capital improvement plan or documentation of environmental review of the proposed project(s) which may have been required by another state or federal agency;
      4. (D) a resolution of the applicant's governing body requesting CWSRF preliminary eligibility determination from the board and stating that the applicant will comply with all board rules and requirements; and
      5. (E) any additional information the executive administrator may request to complete eligibility evaluation of the capital improvements plan.

3. (c) Procedures between board preliminary eligibility determination and before financial commitment are as follows:

   1. (1) Prior to the initiation of construction of each project included in the capital improvements plan which will be funded by the board, the applicant will obtain from the executive administrator approval of the engineering feasibility data as addressed in §375.36 of this title (relating to Engineering Feasibility Data), a favorable environmental determination as addressed in §375.35 of this title (relating to Required Environmental Review and Determination) or §375.214 of this title (relating to Required Environmental Review and Determination), whichever is applicable; approval of design plans and specifications as addressed in §375.62 of this title (relating to Approval of Contract Documents). Prior to the initiation of construction, applicant will additionally submit to the executive administrator bidding documents, including executed contracts for the project.
   2. (2) The executive administrator will make periodic inspections of projects under §375.82 of this title (relating to Inspection During Construction).
   3. (3) The executive administrator will advise the board concerning projects that involve major economic or administrative impacts to the applicant resulting from environmentally-related special mitigative or precautionary measures from an environmental assessment under §375.35 of this title or as conditions in the environmental determination required by §375.214 of this title as applicable.

4. (d) After the board's preliminary eligibility determination under subsection (b) of this section and after all requirements under subsection (c) of this section have been met, any of the project(s) included in the applicant's capital improvements plan may be considered for a commitment for financial assistance. An applicant must submit an application which includes the following:

   1. (1) all applicable information required in §375.32 of this title (relating to Required General Information), §375.33 of this title (relating to Required Legal Information), and §375.34 of this title (relating to Required Fiscal Information);
   2. (2) a water conservation plan required by §375.37 of this title (relating to Required Water Conservation Plan); and
   3. (3) any additional information the executive administrator may request to complete evaluation of the financial application.
5. (e) After board commitment and after completion of all closing and release prerequisites specified in §375.39, §375.71, or §375.72 of this title, funds will be released.
6. (f) The executive administrator may recommend to the board the use of this section if, based on available information submitted under subsection (b), (c) or (d) of this section, there appear to be no significant permitting, social, environmental, engineering, or financial issues associated with the project. Any request for preliminary eligibility determination or financing under this option may be considered by the board despite a negative recommendation from the executive administrator.
7. (g) An applicant with outstanding commitments for financial assistance for projects previously approved by the board or with funds available from closed loans may utilize identified funds from the outstanding commitments or closed loans for costs approved in the preliminary eligibility determination when the requirements in subsection (c) of this section have been met. If the applicant uses this subsection, the board cannot guarantee that additional funds for projects or work previously approved by the board will be available. The applicant must submit a new request for additional financial assistance in the event funds from outstanding commitments or closed loans are utilized for projects in the preliminary eligibility determination and additional funding is required to complete the projects. The provisions of this subsection may not be used if the previously committed or closed loans are backed by project-specific revenues as opposed to system revenues or tax pledges of the applicant.

Source Note:The provisions of this §375.42 adopted to be effective February 11, 1999, 24 TexReg 769.