Sec.25-33b-2. Loans to investor-owned and municipally-owned water companies

(a) Standards for eligibility

(1) In order to be eligible for assistance under the drinking water facilities loan program, an applicant must demonstrate that:

(A) Either it is an investor-owned water company which supplies water to at least 25 but less than 10,000 customers or it is a municipally-owned water company; and

(B) It is subject to either the provisions of the Safe Water Act or an applicable order of the Department of Health Services.

(2) The proceeds of each loan are to be applied by the water company to pay the costs of the planning, design, modification or construction of drinking water facilities which are approved by the Commissioner of Health Services as necessary and appropriate to enable the water company to comply with the Safe Water Act or an applicable order of the Department of Health Services. Planning costs shall include, but need not be limited to, fees and expenses of architects, engineers, attorneys, accountants and other professional consultants, and costs of preparing surveys, studies, site plans and plans and specifications for eligible drinking water facilities. A portion of the loan proceeds may be applied by the applicant to the reasonable costs of procuring the loan.

(3) Loans will be made in amounts as determined by the Commissioner.

Each loan will

(A) have a term not in excess of thirty years;

(B) bear interest at a rate of 1% above the interest cost borne by the State with respect to its most recent issue of general obligation bonds;

(C) be repaid in regular periodic installments throughout its term; and

(D) be subject to prepayment without penalty at any time.

(b) Procedures for determining eligibility and awarding loans

(1) Applications shall be made on forms prescribed by the Commissioner, accompanied by a preliminary cost certificate setting forth the estimated costs of the eligible drinking water facilities. Each loan shall be authorized by the authority or, if the authority so determines, by a committee of the authority consisting of the chairman and either one other member of the authority or its executive director. The authority shall charge reasonable application and other fees to be applied to the administrative expenses incurred in carrying out the provisions of Conn. Gen. Stat. § 25-33a, to the extent such expenses are not paid by the authority or from monies appropriated to the Department of Economic Development.

(2) The Commissioner will issue commitments to make loans after determining from each application and performing such other inquiries and investigations as he deems appropriate in the circumstances that the applicant meets the criteria for eligibility set forth in § 25-33b-2 (a) of these regulations. Each commitment will specify the amount of the loan the Commissioner commits to make and the period for which the commitment will be valid, taking into consideration the construction schedule and completion date for the eligible drinking water facilities estimated by the Commissioner of Health Services. Each commitment will also set forth such other terms and conditions as are established by the Commissioner for the loan.

(3) The Commissioner will disburse each loan upon receipt of a final cost certificate from the water company accompanied by an independent public accountant's opinion with respect thereto, together with confirmation by the Commissioner of Health Services that the planning, design, modification, or construction of eligible drinking water facilities has been completed satisfactorily by the water company and that the water company is or will be in compliance with the Safe Water Act or an applicable order of the department of health services. The loan will be evidenced by the promissory note of the water company and the water company will also deliver an opinion of counsel as to matters relating to the loan

(4) All proceeds from the repayment of interest and principal on any loan authorized by Conn. Gen. Stat. § 25-33a-(1), after payment therefrom of any loan correspondent's service fees property chargeable thereto, shall be paid to the state treasurer for deposit in a fund designated "Investor-owned Water Companies' Revolving Fund." Such fund shall be used to make loans authorized by Conn. Gen. Stat. § 25-33a (1).

(5) Loan commitments will terminate on the date specified in the loan commitment. In the event of a termination the amount segregated under the loan commitment for the benefit of a water company will again become available for commitment under the drinking water facilities loan program. The Commissioner may, in his discretion and as necessary to effect the purposes of Conn. Gen. Stat. § 25-33a (1), extend the commitment period to take account of construction delays or any other factors which may warrant an extension in particular cases.

(Effective November 9, 1983)