RS 2826 - Loan conditions and repayment
A. Upon approval of an application by the Louisiana Department of Health, office of public health, the Louisiana Department of Health may lend amounts on deposit in the Drinking Water Revolving Loan Fund to a public water system to finance all or a portion of the cost of an eligible project. Such loans are subject to the borrower's compliance with the conditions of the loan, as well as any applicable rules or regulations promulgated by the Louisiana Department of Health.
B. Prior to making a loan, the Louisiana Department of Health shall determine that the public water system has the ability to repay the unsubsidized portion of the loan, and may require a dedicated source of repayment and impose additional requirements as the department deems necessary.
C.(1) Each loan, unless prepaid, shall be payable subject to the loan agreement, with principal and interest payments commencing not later than one year after the completion date of the project for which the loan was made, and each loan shall be fully amortized not later than twenty years after the completion date.
(2)(a) An exception is made for loans for a disadvantaged community wherein an extended loan term has been granted in the loan agreement.
(b) In such case, principal and interest payments, as applicable, shall commence not later than one year after the completion date of the project for which the loan was made, and all of the following are true:
(i) The extended loan term terminates not later than the date that is thirty years after the completion date of the project.
(ii) The extended loan term does not exceed the expected design life of the project.
D.(1) Subject to the limitations of the federal act, the interest rate on each loan shall be established by the secretary of the Louisiana Department of Health in consultation with the assistant secretary for the office of public health, Louisiana Department of Health. Criteria to be considered in the development of such interest rate shall include but is not limited to program priorities established within the Intended Use Plan, the tax status of the applicant, the creditworthiness of the applicant, the cost of bonds issued to provide loan funding, and the long-term viability of the Drinking Water Revolving Loan Fund.
(2) The interest rate for a loan may include any additional rate that the Louisiana Department of Health considers reasonable or necessary to provide a reserve for the repayment of the loan. The additional rate may be fixed or variable, may be calculated according to a formula, and may differ from the rate established for any other loans.
E. Each loan shall be evidenced by a bond, note, or other evidence of indebtedness of the borrower, in a form prescribed or approved by the Louisiana Department of Health. Such evidences of indebtedness shall be consistent with the provisions of this Chapter and the federal act, and are not required to be identical for all loans.
F. As a condition to making a loan, the Louisiana Department of Health, office of public health, may impose a reasonable administrative fee, subject to the provisions of Article VII, Section 2.1 of the Constitution of Louisiana, which fee may be paid from the proceeds of the loan or other funds available to the owner of the public water system. The proceeds from such administration fee shall be deposited into a special interest bearing account and shall be specifically reserved for the payment of long-term administrative costs associated with the Drinking Water Revolving Loan Fund Program.
Acts 1997, No. 480, §2, eff. June 30, 1997; Acts 2003, No. 67, §3, eff. May 28, 2003.