1. (a) Commission analysis. The commission will consider all relevant information, including the sufficiency of the information, the probable reliability of the projections, and the anticipated financial condition of the applicant and the project.

2. (b) Applications for limited financial assistance.

   1. (1) Applications for financial assistance in the amount of $250,000 or less may be approved by the commission without going through both the preliminary and final approval processes prescribed in subsections (c) and (e) of this section. These applications may be approved by the commission using one final approval process.
   2. (2) Applications under this subsection must meet all the requirements and are subject to all the conditions applicable either to preliminary or final approval of financial assistance, except that the negotiation process under subsection (c)(3) of this section may be completed after final approval.
   3. (3) The commission may require applications under this subsection to receive preliminary and final approval separately. In making this determination, the commission will consider the complexity and size of the project, the type of infrastructure or asset involved, and the complexity of the project's and the applicant's financial status.

3. (c) Preliminary approval.

   1. (1) Considerations. Prior to granting preliminary approval of an eligible project, the commission may consider:

      1. (A) whether the project is on the state highway system;
      2. (B) the transportation need for and anticipated public benefit of the project;
      3. (C) the present and projected financial condition of the bank;
      4. (D) potential social, economic, and environmental impacts;
      5. (E) conformity with the purposes of the bank;
      6. (F) evidence of local public support; and
      7. (G) any other relevant consideration.

   2. (2) Project requirements. The commission may grant preliminary approval to a project for bank financing if it finds that:

      1. (A) the project is consistent with the Statewide Transportation Plan and, if appropriate, with the metropolitan transportation plan (MTP) developed by an MPO;
      2. (B) if the project is in a Clean Air Act non-attainment area, the project will be consistent with the Statewide Transportation Improvement Program (STIP), with the conforming plan and Transportation Improvement Program (TIP) for the MPO in which the project is located (if necessary), and with the State Implementation Plan (SIP);
      3. (C) the project will improve the efficiency of the state's transportation systems;
      4. (D) the project will expand the availability of funding for transportation projects or reduce direct state costs; and
      5. (E) the application shows that the project and the applicant are likely to have sufficient revenues to assure repayment of the financial assistance.

   3. (3) Authorized actions. By granting preliminary approval, the commission authorizes the executive director to negotiate:

      1. (A) the project's limits, scope, definition, design, and any other factors that may effect the financing of the project;
      2. (B) the amount, type, and timing of disbursements of financial assistance;
      3. (C) the interest rates, including subsidies;
      4. (D) the fees;
      5. (E) the charges;
      6. (F) the repayment schedules;
      7. (G) the term to maturity of any financial assistance;
      8. (H) the collateral securing the financial assistance;
      9. (I) the appropriate covenants applicable to the financial assistance;
      10. (J) the default provisions; and
      11. (K) all other provisions necessary to complete an agreement under Subchapter E of this chapter.

4. (d) Social, economic, and environmental impact.

   1. (1) Before final approval is granted under subsection (e) of this section, the department or the applicant must complete a study of the social, economic, and environmental impact of the project. The study must meet all requirements for a federal or state project as if the project had been undertaken directly by the department.
   2. (2) For a project not on the state highway system, the applicant shall be responsible for completing required studies of social, economic, and environmental impacts, unless the applicant and the department agree otherwise. If the department agrees to be responsible for these studies, then any costs will be charged according to the department's local participation agreement.
   3. (3) For a project on the state highway system, the department will be responsible for completing required studies of social, economic, and environmental impacts with any costs to be charged to the project.

5. (e) Final approval. After preliminary approval under subsection (c) of this section, the completion of negotiations under subsection (c)(3) of this section, and the approval of the social, economic, and environmental study required by subsection (d) of this section, the commission may grant final approval if it determines that:

   1. (1) providing financial assistance will protect the public's safety and prudently provide for the protection of public funds, while furthering the purposes of this chapter; and
   2. (2) the project will provide for all reasonable and feasible measures to avoid, minimize, or mitigate for adverse environmental impacts.
6. (f) Postponement. The commission may postpone final approval if it finds that the current or projected financial condition of the bank warrants this action.
7. (g) Contingencies. The commission may make its preliminary or final approval contingent on further actions by the applicant, including making changes in the application, levying taxes, and maintaining specified conditions necessary to assure repayment.
8. (h) Order of approval or disapproval. Approval or disapproval of financial assistance, whether preliminary or final, will be by written order of the commission and will include the rationale, findings, and conclusions on which approval or disapproval is based. Approval or disapproval will be in the sole discretion of the commission, and nothing in this subchapter is intended to require approval of any financial assistance.

Source Note:The provisions of this §6.32 adopted to be effective January 8, 1998, 23 TexReg 151; amended to be effective October 18, 1998, 23 TexReg 10501; amended to be effective September 19, 2002, 27 TexReg 8775.