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 375.92 - Financial Assistance Secured by Promissory Notes and Deeds of Trust

Current through Reg. 49, No. 28; July 12, 2024
(a) Applicability. This section contains
				  closing requirements for a water supply corporation or an eligible private
				  Applicant or other Applicant that is not authorized to issue bonds or other
				  securities. This section applies to financial assistance for either pre-design
				  or construction funding.
(b) Use of
				  consultants. The executive administrator may recommend, but not require, that
				  the entity engage the services of a financial advisor or other consultant to
				  ensure the appropriateness of the proposed debt and to provide advice to the
				  entity.
(c) Documents required for
				  closing. The following documents and conditions are required for closing
				  financial assistance secured by promissory notes and deeds of trust:
(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) an executed
				  promissory note and loan agreement in a form approved by the executive
				  administrator;
(3) a Deed of Trust
				  and Security Agreement that must contain a first mortgage lien evidenced by a
				  deed of trust on all the real and personal property of the water system
				  provided; however, this is not needed if the financial assistance consists of
				  100 percent principal forgiveness;
(4) an owner's title insurance policy for the
				  benefit of the Board covering all the real property identified in the deed of
				  trust provided; however, this is not needed if the financial assistance
				  consists of 100 percent principal forgiveness;
(5) evidence that the rates on which the
				  Applicant intends to rely for repayment of the financial assistance have
				  received final and binding approval from the Utility Commission and, for
				  Applicants required to utilize a surcharge account, evidence that the approval
				  of the Utility Commission was conditioned on the creation of a surcharge
				  account;
(6) a certified copy of
				  the resolution adopted by the governing body authorizing the indebtedness and a
				  certificate from the secretary of the governing body attesting to adoption of
				  the resolution in accordance with the by-laws or rules of the governing body
				  and in compliance with the Open Meetings Act, if applicable;
(7) a legal opinion from Applicant's counsel
				  that provides:
(A) that the entity has the
				  legal authority to enter into the loan agreement and to execute a promissory
				  note;
(B) that the entity is not in
				  breach or default of any state or federal order, judgment, decree, or other
				  instrument which would have a material effect on the loan
				  transaction;
(C) that there is no
				  pending suit, action, proceeding, or investigation by a public entity that
				  would materially adversely affect the enforceability or validity of the
				  required financial assistance documents;
(D) evidence that the entity is in good
				  standing with the Texas Office of the Secretary of State; and
(E) a statement addressing any other issues
				  deemed relevant by the executive administrator.
(8) evidence that an approved water
				  conservation plan has been adopted and will be implemented through the life of
				  the project;
(9) evidence of the
				  Applicant's agreement to comply with special environmental conditions contained
				  in the Board's environmental finding;
(10) evidence that the Applicant has
				  established a dedicated source of revenue for repayment of the financial
				  assistance;
(11) evidence that the
				  Applicant has adopted final water rates and charges that are not subject to
				  appeal to the Utility Commission;
(12) copies of executed service and revenue
				  contracts;
(13) when any portion of
				  the financial assistance is to be held in an escrow account, the Applicant
				  shall execute an escrow agreement, approved as to form and substance by the
				  executive administrator; and
(14)
				  any other documents relevant to the particular transaction.