Texas Administrative Code › Title 31 - NATURAL RESOURCES AND CONSERVATION › Part 10 - TEXAS WATER DEVELOPMENT BOARD › Chapter 363 - FINANCIAL ASSISTANCE PROGRAMS › Subchapter I - PILOT PROGRAM FOR WATER AND WASTEWATER LOANS TO RURAL COMMUNITIES › Division 3 - CLOSING AND RELEASE OF FUNDS › Section 363.931 - Requirements for Loan Closing

Current through Reg. 49, No. 28; July 12, 2024
(a)
					 Instruments needed for closing. The documents which shall be required at the
					 time of closing shall include the following:
(1) if not closing under the pre-design
					 funding option, evidence that 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 bond ordinance,
					 order or resolution adopted by the governing body authorizing the issuance of
					 debt to be sold to the board, or an executed promissory note and loan
					 agreement, that is acceptable to the executive administrator and which shall
					 have sections providing as follows:
(A) if
					 loan proceeds are to be deposited into an escrow account at the closing on all
					 or a portion of the loan, then an escrow account shall be created that shall be
					 separate from all other accounts and funds, as follows:
(i) the account shall be maintained by an
					 escrow agent as defined in §
														363.2 of
					 this title (relating to Definitions of Terms);
(ii) funds shall not be released from the
					 escrow account without written approval by the executive
					 administrator;
(iii) upon request
					 of the executive administrator, the escrow account statements shall be provided
					 to the executive administrator;
(iv) the investment of any loan or grant
					 proceeds deposited into an approved escrow account shall be handled in a manner
					 that complies with the Public Funds Investment Act, Texas Government Code,
					 Chapter 2256; and
(v) the escrow
					 account shall be adequately collateralized in a manner sufficient to protect
					 the board's interest in the project and that complies with the Public Funds
					 Collateral Act, Texas Government Code, Chapter 2257;
(B) that a construction account shall be
					 created which shall be separate from all other accounts and funds of the
					 applicant;
(C) that a final
					 accounting be made to the board of the total sources and authorized use of
					 project funds within 60 days of the completion of the project and that any
					 surplus loan funds be used in a manner as approved by the executive
					 administrator;
(D) that an annual
					 audit of the rural community, prepared in accordance with generally accepted
					 auditing standards by a certified public accountant or licensed public
					 accountant be provided annually to the executive administrator;
(E) that the rural community 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;
(F) that the
					 rural community shall maintain current, accurate and complete records and
					 accounts in accordance with generally accepted accounting principles necessary
					 to demonstrate compliance with financial assistance related legal and
					 contractual provisions;
(G) that
					 the rural community covenants to abide by the board's rules and relevant
					 statutes, including the Texas Water Code, Chapters 15, 16, and 17;
(H) that the rural community, or an obligated
					 person for whom financial or operating data is presented, will undertake,
					 either individually or in combination with other issuers of the rural
					 community'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 rural community's obligations, if the board sells or otherwise
					 transfers such obligations, and the beneficial owners of the board's bonds if
					 the rural community is an obligated person with respect to such bonds under
					 rule 15c2-12;
(I) that all payments
					 shall be made to the board via wire transfer at no cost to the board;
(J) that the partial redemption of bonds or
					 other authorized securities be made in inverse order of maturity;
(K) that insurance coverage be obtained and
					 maintained in an amount sufficient to protect the board's interest in the
					 project;
(L) that the rural
					 community shall establish a dedicated source of revenue for repayment;
					 and
(M) any other recitals mandated
					 by the executive administrator;
(3) unqualified approving opinions of the
					 attorney general of Texas and if bonds are issued, a certification from the
					 comptroller of public accounts that such debt has been registered in that
					 office;
(4) if bonds are issued, an
					 unqualified approving opinion by a recognized bond attorney acceptable to the
					 executive administrator, or if a promissory note and loan agreement is used, an
					 opinion from the rural community's attorney which is acceptable to the
					 executive administrator;
(5)
					 executed escrow agreement entered into by the entity and an escrow agent
					 satisfactory to the executive administrator, in the event that funds are
					 escrowed, or a certificate of trust as defined in §
												363.2 of
					 this title, if applicable;
(6)
					 other or additional data and information, if deemed necessary by the executive
					 administrator.