Direct Loan Program

PURPOSE: This rule sets forth the requirements for implementation of direct loan programs to be financed through the Clean Water State Revolving Fund program contained in 10 CSR 20-4.040 or the State Direct Loan Program. (1) General. The department may make direct loans by purchasing the general obligation bonds, revenue bonds, short-term notes, or other acceptable obligation of any qualified applicant for the planning, design and/or construction of an eligible project. These loans shall not exceed the total eligible project costs as described in 10 CSR 20-4.040(21) less any amounts financed by other means. (2) Clean Water State Revolving Fund (CWSRF) Direct Loans. Funding for these loans is from CWSRF loan repayments, federal capitalization grants, or other funds. The provisions and requirements of the Clean Water State Revolving Fund General Assistance Regulation, 10 CSR 20-4.040, apply to loans awarded under this regulation. (3) State Direct Loan Program. Funding for these loans is from state bond funds and loan repayments. The provisions and requirements of the Clean Water State Revolving Fund General Assistance Regulation, 10 CSR 204.040, apply to loans awarded under this regulation unless specifically provided for herein. The following provisions of 10 CSR 20-4.040 do not apply: (A) 10 CSR 20-4.040(3) except for (3)(A)2.; (B) 10 CSR 20-4.040(7); (C) 10 CSR 20-4.040(9)(A)3.; (D) 10 CSR 20-4.040(9)(B); (E) 10 CSR 20-4.040(11)(B)2.; (F) 10 CSR 20-4.040(14); (G) 10 CSR 20-4.040(17)(I); (H) 10 CSR 20-4.040(17)(J); (I) 10 CSR 20-4.040(17)(N); (J) 10 CSR 20-4.040(18)(B)2.K.(XIII); (K) 10 CSR 20-4.040(28); and (L) 10 CSR 20-4.040(29). (4) Funding Allocation. (A) CWSRF Direct Loans. The department will follow 10 CSR 20-4.040. (B) State Direct Loans. After receiving applications and the department determines that the application is complete and eligible, the department will take the application before the Clean Water Commission for allocation of funding. (5) Interest Rates. The department shall use the target interest rate (TIR) policy as established by the commission under section (4) of (6) Reimbursement Terms. (A) The maximum reimbursement shall be no more than the sum of all eligible costs incurred to date. Each payment request shall include the information listed in the following paragraphs (6)(A)1.–3. and other information deemed necessary by the department to insure proper project management and expenditure of public funds: 1. Completed reimbursement request form; 2. Construction pay estimates signed by the construction contractor, the recipient, and the consulting engineer, if applicable; and 3. Invoices for other eligible services, equipment, and supplies for the project. (B) If the department is satisfied that the payment request accurately reflects the eligible cost incurred to date on the project, the department will request that state payment be issued to the recipient. (7) Trustee or Paying Agent. The department may require the recipient to contract with a trustee or paying agent to provide the services listed in subsections (7)(A)–(D) of this rule, along with other such services as detailed in the participant’s escrow agreement. (A) Maintain separate trust funds and accounts for recipients; (B) Disburse funds to recipients; (C) Collect principal and interest quarterly payments from recipients; and (D) Provide monthly financial reports to recipients. (8) Amortization Schedules. The guidelines contained in the following subsections (8)(A)– (D) are to be used to establish amortization schedules under this rule: (A) For recipients of a state direct loan, the bonds, notes, or other obligations shall be fully amortized for a period not longer than thirty (30) years after initiation of operation. For CWSRF direct loan recipients, the bonds, notes, or other obligations shall be fully amortized for a period not longer than the earlier of: 1. Thirty (30) years after initiation of operation; 2. The economic useful life of the project; or 3. Such other period of time that the department determines is appropriate and in the best interest of the CWSRF program. (B) The principal payment frequency shall be no less than annual and at least semi-annual for interest payments; (C) The amortization schedule may either be straight-line or declining schedules for the term of the obligation. The department may approve an alternative amortization method if deemed appropriate; (D) Repayment of principal shall begin not later than one (1) year after initiation of operation. (9) Loan Fees. The department may charge annual loan fees not to exceed one-half percent (.5%) of the outstanding loan balance for state direct loans. CWSRF direct loan recipients will be charged a fee on the loan in accordance with 10 CSR 20-4.040(5). (10) Additional Administrative Fees Allowed. Additional administrative fees may be assessed by the department at the time the administration fee is calculated in accordance with 10 CSR 20-4.040(6). (11) Variations of Structure Permitted. This rule sets out the general format for the direct loan programs. The commission, EIERA, and the department shall have the authority to make specific refinements, variations, or additional requirements as may be necessary or desirable in connection with the efficient operation of the direct loan program. AUTHORITY: sections 644.026 and 644.122, RSMo 2016.* Original rule filed Sept. 13, 1988, effective Feb. 14, 1989. Amended: Filed April 2, 1990, effective Sept. 28, 1990. Emergency amendment filed July 17, 1990, effective July 30, 1990, expired Nov. 26, 1990. Amended: Filed March 4, 1993, effective Sept. 9, 1993. Amended: Filed April 14, 1994, effective Nov. 30, 1994. Amended: Filed March 1, 1996, effective Nov. 30, 1996. Amended: Filed June 24, 1999, effective March 30, 2000. Amended: Filed June 13, 2018, effective Feb. 28, 2019. *Original authority; 644.026, RSMo 1972, amended 1973, 1987, 1993, 1995, 2000, 2012, 2014 and 644.122, RSMo 1987, amended 1991, 1993, 1998, 2000.