1. (a) Instruments needed for closing. The documents which shall be required at the time of closing shall include the following:

   1. (1) evidence that requirements and regulations of all local, state and federal agencies having jurisdiction have been met prior to release of building funds, including but not limited to permits and authorizations;

   2. (2) certified copy of the ordinances or resolutions adopted by the governing body authorizing issuance of debt sold to the board which has received prior approval by the executive administrator and which shall have sections providing:

      1. (A) that an escrow account, if applicable, shall be created which shall be separate from all other funds and that:

         1. (i) the account shall be maintained at an escrow agent bank or maintained with the trust agent;
         2. (ii) funds shall not be released from the escrow account without written approval by the executive administrator;
         3. (iii) the escrow account bank statements or trust account statement will be provided on a monthly basis to the Development Fund Manager's office; and
         4. (iv) the escrow account will be adequately collateralized as determined by the executive administrator sufficient to protect the board's interest;
      2. (B) that a construction fund shall be created which shall be separate from all other funds of the applicant;
      3. (C) that a final accounting be made to the board of the total sources and authorized use of project funds and that any surplus loan funds be used in a manner as approved by the executive administrator;
      4. (D) that an annual audit of the political subdivision, prepared in accordance with generally accepted auditing standards by a certified public accountant or licensed public accountant be provided annually to the executive administrator;
      5. (E) that the political subdivision shall fix and maintain rates and collect charges to provide adequate operation, maintenance and insurance coverage on the project in an amount sufficient to protect the board's interest;
      6. (F) that the political subdivision will implement any water conservation program required by the board until all financial obligations to the state have been discharged;
      7. (G) that the political subdivision shall maintain current, accurate and complete records and accounts necessary to demonstrate compliance with financial assistance related legal and contractual provisions;
      8. (H) that the political subdivision covenants to abide by the board's rules and relevant statutes, including the Texas Water Code, Chapter 15, Subchapter J; and
      9. (I) that the political subdivision, or an obligated person for whom financial or operating data is presented, will undertake, either individually or in combination with other issuers of the political subdivision's obligations or obligated persons, in a written agreement or contract to comply with requirements for continuing disclosure on an ongoing basis substantially in the manner required by Securities and Exchange Commission (SEC) rule 15c2-12 and determined as if the board were a Participating Underwriter within the meaning of such rule, such continuing disclosure undertaking being for the benefit of the board and the beneficial owner of the political subdivision's obligations, if the board sells or otherwise transfers such obligations, and the beneficial owners of the board's bonds if the political subdivision is an obligated person with respect to such bonds under rule 15c2-12;
   3. (3) two copies of the political subdivision's water conservation program, including documentation of local adoption;
   4. (4) unqualified approving opinions of the attorney general of Texas and a certification from the comptroller of public accounts that such debt has been registered in that office;
   5. (5) unqualified approving opinion by a recognized bond attorney acceptable to the executive administrator;
   6. (6) executed escrow agreement entered into by the entity and an escrow agent bank or an executed trust agreement entered into by the entity and the trust agent satisfactory to the executive administrator, in the event that construction funds are escrowed;
   7. (7) evidence that the applicant shall maintain adequate insurance coverage on the project in an amount adequate to protect the board's interest;
   8. (8) assurances that the applicant will comply with any special conditions specified by the board's environmental determination until all financial obligations to the state have been discharged;
   9. (9) other or additional data and information, if deemed necessary by the executive administrator.
2. (b) Certified transcript. At such time as available following the final release of funds the political subdivision shall submit a transcript of proceedings relating to the debt purchased by the board which shall contain those instruments normally furnished a purchaser of debt.
3. (c) Refinancing construction loans. If the project includes the refinancing of a loan, the applicant shall submit all of the items specified in subsection (a) of this section and any records, assurances, or appraisals concerning the construction of the project. Additionally, the project must pass the executive administrator's inspection of the project.
4. (d) Loan closing prior to completion of design. In the event financial assistance is needed by the applicant to complete design of a project without escrow of funds for building under §375.40 of this title (relating to Pre-design Funding Option), the executive administrator will so advise the board. The board at its option may authorize the executive administrator to close the loan for planning and design without requiring the submittals in subsection (a)(1) and (6) of this section. However, the submittals in subsection (a)(1) of this section will be required prior to delivery of funds for building purposes. Applicants wishing to close prior to obtaining required commission permits will be required to present documentation that the required permits are expected to be issued.
5. (e) Loan closing for phased construction. The executive administrator may determine it appropriate to close only a portion of a loan for a phased construction project unless the applicant can demonstrate the need for phased construction and that closing the portion of the loan desired by the applicant is necessary to expedite construction.

6. (f) Closing Requirements. A political subdivision shall be required to comply with the following closing requirements:

   1. (1) all loans shall be closed in book-entry-only form;
   2. (2) the political subdivision shall use a paying agent/registrar that is a Depository Trust Company (DTC) participant;
   3. (3) the political subdivision shall be responsible for paying all DTC closing fees assessed to the political subdivision by the Board's custodian bank directly to the Board's custodian bank;
   4. (4) the political subdivision shall provide evidence to the Board that one fully registered bond has been sent to the DTC or to the political subdivision's paying agent/registrar prior to closing.

Source Note:The provisions of this §375.72 adopted to be effective February 10, 1995, 20 TexReg 492; amended to be effective July 7, 1995, 20 TexReg 4556; amended to be effective February 8, 1996, 21 TexReg 666; amended to be effective December 12, 1996, 21 TexReg 11795; amended to be effective November 5, 1997, 22 TexReg 10744.