Texas Administrative Code › Title 31 - NATURAL RESOURCES AND CONSERVATION › Part 10 - TEXAS WATER DEVELOPMENT BOARD › Chapter 375 - CLEAN WATER STATE REVOLVING FUND › Subchapter G - LOAN CLOSINGS AND AVAILABILITY OF FUNDS › Section 375.91 - Financial Assistance Secured by Bonds or Other Authorized Securities

Current through Reg. 49, No. 28; July 12, 2024
(a) Applicability and required documents.
				  This section applies to closings for financial assistance with entities issuing
				  bonds or other authorized securities. The following documents and conditions
				  are required for closing financial assistance secured by bonds or other
				  authorized securities:
(1) evidence that
				  applicable requirements and regulations of all identified local, state, and
				  federal agencies having jurisdiction have been met, including but not limited
				  to permits and authorizations;
(2)
				  a certified copy of the ordinance or resolution adopted by the governing body
				  authorizing the issuance of debt to be sold to the Board that is acceptable to
				  the executive administrator. The ordinance or resolution must have sections
				  provided as follows:
(A) if financial
				  assistance proceeds are to be deposited into an escrow account at the time of
				  closing, then an escrow account separate from all other accounts and funds must
				  be created as follows:
(i) the account must
				  be maintained by an escrow agent as defined in §
													375.1 of
				  this title (relating to Definitions);
(ii) funds cannot be released from the escrow
				  without prior written approval from the executive administrator, who shall
				  issue written authorization for release of the funds;
(iii) escrow account statements must be
				  provided to the executive administrator upon request;
(iv) the investment of any financial
				  assistance proceeds deposited into an approved escrow account must be handled
				  in a manner that complies with the Public Funds Investment Act, Texas
				  Government Code Chapter 2256; and
(v) the escrow account must be adequately
				  collateralized in a manner sufficient to protect the Board's interest in the
				  project and in compliance with the Public Funds Collateral Act, Texas
				  Government Code Chapter 2257;
(B) the Applicant shall fix and maintain
				  rates in accordance with state law, and collect charges to provide adequate
				  operation and maintenance of the project;
(C) a construction account must be created
				  and must be kept separate from all other accounts and funds of the
				  Applicant;
(D) bonds must be closed
				  in book-entry-only form;
(E) the
				  use of a paying agent/registrar that is a Depository Trust Company (DTC)
				  participant is required;
(F) the
				  payment of all DTC closing fees assessed by the Board's custodian bank must be
				  directed to the Board's custodian bank by the Applicant;
(G) the Applicant must provide evidence that
				  one fully registered bond has been sent to the DTC or to the Applicant's paying
				  agent/registrar prior to closing;
(H) all payments, including the origination
				  fee, must be made to the Board via wire transfer at no cost to the
				  Board;
(I) insurance coverage must
				  be obtained and maintained in an amount sufficient to protect the Board's
				  interest in the project;
(J) the
				  Applicant, or an obligated person for whom financial or operating data is
				  presented, either individually or in combination with other issuers of the
				  Applicant's obligations or obligated persons, must undertake in a written
				  agreement or contract to comply with requirements for continuing disclosure on
				  an ongoing basis as 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 is 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. The ordinance
				  or resolution required in subsection (a)(2) of this section must also contain
				  any other requirements of the SEC or the IRS relating to arbitrage, private
				  activity bonds, or other relevant requirements regarding the securities held by
				  the Board;
(K) current, accurate,
				  and complete records and accounts must be maintained in accordance with
				  generally accepted accounting principles to demonstrate compliance with
				  requirements in the financial assistance documents;
(L) the Applicant must annually submit an
				  audit prepared by a certified public accountant in accordance with generally
				  accepted auditing standards;
(M)
				  the Applicant must submit a final accounting within 60 days of project
				  completion.
(N) the Applicant must
				  document the adoption and implementation of an approved water conservation plan
				  for the duration of the financial assistance;
(O) the Applicant must comply with special
				  environmental conditions specified in the Board's environmental finding as well
				  as with any applicable Board laws or rules relating to use of the financial
				  assistance;
(P) the Applicant must
				  establish a dedicated source of revenue for repayment of the financial
				  assistance;
(Q) interest payments
				  must commence no later than one year after the date of closing;
(R) annual principal payments must commence
				  no later than one year after completion of project construction; and
(S) any other recitals mandated by the
				  executive administrator;
(3) unqualified approving opinions of the
				  attorney general of Texas and, if bonds or other authorized securities are
				  issued, a certification from the comptroller of public accounts that such debt
				  has been registered in that office;
(4) an unqualified approving opinion by a
				  recognized bond attorney;
(5)
				  assurances that the Applicant will comply with any special conditions specified
				  by the Board's environmental finding;
(6) a Private Placement Memorandum containing
				  a detailed description of the issuance of debt to be sold to the Board. The
				  Applicant must submit a draft Private Placement Memorandum at least 30 days
				  before closing of the financial assistance; a final electronic version of the
				  Memorandum must be submitted no later than seven days before closing;
(7) when any portion of the financial
				  assistance is to be held in an escrow account, the Applicant must execute an
				  escrow agreement approved as to form and substance by the executive
				  administrator;
(8) if applicable, a
				  home rule municipality pursuant to Texas Local Government Code Chapter 104 must
				  execute a Certification of Trust as defined in §
											375.1 of
				  this title; and
(9) any additional
				  information specified in writing by the executive administrator.