1. (a) Unless otherwise indicated herein, proceeds of bonds shall be distributed by the comptroller pursuant to the terms of the financing documents.
2. (b) Upon the closing of each series of bonds, the purchasers thereof shall pay the proceeds thereof in immediately available funds to the comptroller.
3. (c) The executive director shall certify to the comptroller and to the qualified agency requesting such financing that the funds are available and have been deposited with the comptroller for the purpose of financing the related project.
4. (d) The executive director shall certify to the comptroller the specific amounts to be transferred from the project fund to the debt service fund. The executive director shall then instruct the comptroller from time to time to pay the costs of issuance in such amounts as specified by the executive director from the project fund. The qualified agency shall request disbursement of funds for the purpose of paying project costs in accordance with the provisions of the financing documents for a particular issue. The proceeds shall be invested by the comptroller with the concurrence of the authority until such time as the costs of issuance and project costs are paid.
5. (e) The client agency requesting financing from the authority shall make or cause to be made payment of project costs from the project fund in accordance with the contracts therefor and shall provide a written monthly report to the authority of the activity on each project in compliance with the reporting provisions of the financing documents. The authority will not assume any responsibility for the actual acquisition, construction, equipment, repair, or renovation of any project or the operation or maintenance thereof, but the authority may inspect projects at reasonable times upon reasonable notice to the client agency.
6. (f) No payments from the project fund may be made for any purpose other than paying costs of issuance and project costs, depositing amounts to any rebate fund for the benefit of the federal government in compliance with the Code, or deposit to the debt service fund of amounts remaining after payment of project costs.
7. (g) If any proceeds of the bonds remain in the project fund after the completion of a project and depositing amounts to any rebate fund for the benefit of the federal government in compliance with the Code, except the amounts specified by the client agency requesting such financing from the authority to be retained for any amount of any project costs not then due and payable or the liability for payment of which is being contested or disputed by the qualified agency and all labor, services, materials, and supplies used in the project have been fully paid and all costs and expenses incurred in connection therewith have been paid, then the client agency requesting such financing from the authority shall cause such proceeds to be transferred from the project fund to the debt service fund; provided, however, that if the legislature has authorized additional projects of the same nature as the project theretofore financed during such time period, the board may, by formal resolution and if permitted by law, authorize the use of such amounts for such additional projects.
8. (h) If the bonds are intended by the board to bear interest which is not includable in gross income of the recipient pursuant to the Code, the use of proceeds of the bonds shall be restricted in such manner and to such extent, as may be necessary, to obtain and retain such tax exemption, including restrictions so that the bonds will not constitute arbitrage bonds under the Code, §149(d) (concerning advance refundings), unless otherwise prescribed by law. The requirements of this section are subject to and shall be interpreted in accordance with the Code, §148.
9. (i) The plans and specifications will be on file at the client agency and available at all times for inspection by the authority.

Source Note:The provisions of this §221.5 adopted to be effective November 25, 1988, 13 TexReg 5749; amended to be effective December 15, 1998, 23 TexReg 12686.