RULES AND REGULATIONS STATE LOAN AND INVESTMENT BOARD

Chapter 16

State Drinking Water Revolving Account

Section 1. Authority.

1. (a) This Chapter is adopted pursuant to W. S. 16-1-303(b).

Section 2. Definitions.

1. (a) “Account” means the State Drinking Water Revolving Loan Account created by W.S. 16-1- 302.
2. (b) “Administrative Account” means the account which may receive up to four percent (4%) of the federal capitalization fund, loan administration and loan application fees which are used to reimburse costs incurred by state agencies in the administration of the program, including but not limited to costs of servicing loans and issuing debt, program start-up costs, financial, management, and legal consulting fees, and costs for support services by state agencies.
3. (c) “Board” means the State Loan and Investment Board to include the Office of State Lands and Investments.
4. (d) “Capacity Development” means that a community water system or nontransient noncom- munity water system can adequately demonstrate that it has technical, managerial and financial capabili- ties to ensure current and future operations of the water system in accordance with all drinking water regulations in effect.
5. (e) “Community Water System” means a public water supply which has at least fifteen (15) service connections used year-round by residents, or that regularly provides water to at least twenty-five
6. (25) residents year-round, including, but not limited to, municipalities and water districts.
7. (f) “DEQ” means the Wyoming Department of Environmental Quality.
8. (g) “Director” means the Director of the Office of State Lands and Investments;
9. (h) “Emergency” means a direct threat to the continued operation of a public water system.
10. (i) “Handbook of Procedures” means the State Drinking Water Revolving Loan Account Hand- book of Procedures.
11. (j) “Intended Use Plan (IUP)” means the annual plan adopted by the State Loan and Invest- ment Board and submitted to the Environmental Protection Agency that describes how the state intends to use the money in the Drinking Water Revolving Loan Account.
12. (k) “Noncommunity Water System” means a public water supply which is not a Community Water System, including but not limited to, public schools, state park recreational areas and state highway public rest areas.
13. (l) “Office (OSLI)” means the Office of State Lands & Investments which provides adminis- trative and operational management of programs of the State Loan and Investment Board.
14. (m) “Operator” means the person who is directly responsible and in charge of the operation of a water treatment plant or water distribution system.
15. (n) “Priority List” means the list of projects expected to receive financial assistance under the Program, ranked in accordance with a priority system developed under Section 1452(b)(2)(A) of the Safe Drinking Water Act.
16. (o) “Program” means the drinking water state revolving fund program pursuant to Section 1452 of the Safe Drinking Water Act (42 U.S.C. § 300j-12).
17. (p) “Publicly Owned Water System” means a water system which is owned, operated, man- aged and maintained by an entity of the state, county, city, township, town, school district, water district, improvement district, joint powers board or any other entity constituting a political subdivision under the laws of this state which provides water for use and consumption of the general public through pipes and other constructed conveyances, and which is not owned, operated, managed or maintained by a private individual, association or corporation.
18. (q) “Safe Drinking Water Act (SDWA)” means the federal Safe Drinking Water Act including the 1996 amendments (Public Law 104-182, 42 U.S.C. § 300f et seq.).
19. (r) “Select Water Committee” means a state legislative committee comprised of five (5) mem- bers from the Wyoming State Senate and five (5) members from the Wyoming House of Representatives (W.S. 21-11-101).
20. (s) “Water Supply System” means a system from the water source to the consumer premises consisting of pipes, structures and facilities through which water is obtained, treated, stored, distributed or otherwise offered to the public for household use or use by humans and which is part of a community water system or a noncommunity water system.
21. (t) “Wyoming Water Development Office (WWDO)” means the office which provides admin- istrative and operational management of the programs administered by the Wyoming Water Development Commission.

Section 3. General Policy.

1. (a) The Board shall extend loans under the provisions of this Chapter, subject to the Select Water Committee’s review and recommendation of projects, in such a manner and to such applicants as shall, in the judgment of the Board, inure to the greatest benefit of the citizens of the state and represent a prudent use of loan funds.

Section 4. Loan Eligibility.

1. (a) Applicants. Publicly Owned Water Systems of municipalities, counties, joint powers boards, state agencies, and other entities constituting political subdivisions under the laws of the state shall be eligible for loans under this Chapter. If the applicant is a joint powers board, it must be legally formed and approved prior to loan application.
2. (b) Purposes. Loans may be extended to eligible Publicly Owned Water Systems as authorized in W. S. 16-1-305. Eligible projects may be comprised of improvements to all components of a Water Supply System as appropriate and permitted by the Safe Drinking Water Act. The Board may authorize loans or other forms of financial assistance including refinancing of existing debt, purchasing loan insur- ance and guaranteeing debt obligations from the Account for purposes authorized by these rules, without review and recommendations from the Select Water Committee, if the Board determines that an emer- gency exists and if there is not sufficient time to obtain review and recommendations from the Select Water Committee to effectively address the emergency situation.
3. (c) Project Eligibility. Only projects on the Priority List that are incorporated into the Intended Use Plan are eligible for loans under this Chapter.

Section 5. Application Procedure.

1. (a) Applications. Applicants shall submit separate applications for each project. Applicants shall submit a completed application on a form provided by the Office or as outlined in the Handbook of Procedures, application section.
2. (b) Timing of Board Consideration. The Board may consider applications for loans under this Chapter at any official meeting of the Board.
3. (c) Preliminary Review. Within forty-five (45) days of receipt of any application, the Director shall notify the applicant, in writing, if the application lacks any of the information required.
4. (d) Incomplete Applications. Incomplete applications shall not be presented to the Board for consideration.

Section 6. Evaluation.

1. (a) Criteria. The Board shall evaluate applications utilizing the following criteria:

   1. (i) Whether the applicant has an appropriate project Priority List ranking as required in Section 1452(b)(3) of the Safe Drinking Water Act and is listed on the fundable portion of the Intended Use Plan;
   2. (ii) Whether the applicant can demonstrate Capacity Development capabilities in com- pliance with Section 1420(b)(3) of the Safe Drinking Water Act and the applicable requirements of DEQ;
   3. (iii) Whether the applicant can obtain or ensure the certification of the Operators of the Publicly Owned Water System in accordance with DEQ rules and regulations prior to obtaining financial assistance approval;
   4. (iv) Whether the applicant is current on all its repayment obligations to the Board;
   5. (v) Whether the applicant’s dedicated source of revenue will be sufficient to provide security to repay the loan; and
   6. (vi) Whether the applicant is ready to proceed with construction or implementation of the project.
2. (b) Interagency Consultation. DEQ and WWDO will review all applications for loans and will provide comments to the Director for Board consideration. DEQ and WWDO will also provide the ser- vices required under W. S. 16-1-301 through W. S. 16-1-308.

Section 7. Board Consideration.

1. (a) The Board shall consider each complete application, allow for comments from the appli- cant, the Director, DEQ and WWDO and approve or disapprove applications. On all approved loans, the Board shall establish the amount of the loan and the term of the loan. The term shall not exceed twenty (20) years or the design life of the project, whichever is shorter.

Section 8. Interest Rates.

1. (a) The interest rate for all loans shall be pursuant to Chapter 14 of the rules as established by the Board. The Board shall review interest rates at least annually.

Section 9. Repayment.

1. (a) Annual repayments of principal and semi-annual payments of interest, as outlined in the loan promissory note and amortization schedule, provided by the Board for all loans shall begin not later than one (1) year after substantial project completion as determined by representatives of OSLI, DEQ or

   WWDO or for projects already completed at time of loan closing, i.e. refinancing of existing debt for completed projects, purchasing loan insurance & guaranteeing debt repayment, annual repayment shall begin not later than one (1) year after loan approval.

Section 10. Disbursement of Loan Proceeds.

1. (a) The loan proceeds shall be disbursed in accordance with a schedule that has been agreed upon and stipulated in the loan agreement. Requests for disbursements shall be submitted on a form provided by the Director. Requests for disbursements shall only be for eligible project costs which have been incurred and shall be subject to review by the DEQ and WWDO.

Section 11. Audits and Inspections.

1. (a) The Board shall require records of loan recipients be audited annually by an independent accountant which may be part of the annual financial audit. The Board shall ensure compliance with the provisions of the federal Single Audit Act, 1996 Amendments and Office of Management and Budget (OMB) Circular A-133. The Board or its designee shall be allowed access by loan recipient to inspect the construction and operation of the project. Loan recipients shall maintain project accounts in accordance with generally accepted government accounting standards.

Section 12. Fees

1. (a) A loan origination fee of one-half of one percent (0.5%) of the amount of the loan will be collected at loan closing. The fees will be deposited to the Administrative Account as authorized by W. S.

   16-1-303(d).