(1) General.
    (a) A complete loan application, Form Application DW-1, State Revolving Fund Loan Program for Drinking Water Facilities Loan Application, effective July 17, 2017, hereby adopted and incorporated by reference, shall be submitted to the Department within 120 days after the project is listed on the fundable portion of the priority list. The project sponsor may incorporate into the loan application, by reference, any information previously submitted to the Department. This form is available from the Department’s Drinking Water State Revolving Fund Program, 3900 Commonwealth Blvd., Tallahassee, Florida 32399-3000, or at http://www.flrules.org/Gateway/reference.asp?No=Ref-08322.
    (b) To receive a loan, a project sponsor must submit a complete loan application, provide reasonable assurance that it has the financial capability to complete the project and repay the loan, and enter into a negotiated written agreement. Loan agreements shall be offered to project sponsors for projects listed on the fundable portion of the priority list in the order of receipt of a complete loan application irrespective of priority score, project rank, or qualification for the financially disadvantaged and small-community reserve funds.
    (c) If a project sponsor does not submit a complete loan application within 120 days, or a loan agreement is not executed within 210 days after a project is added to the fundable portion, the project shall be removed from the priority list at the next scheduled public meeting; unless the project sponsor can show good cause prior to that meeting documenting why the application was not submitted or why the agreement was not executed by the appropriate deadline. For the purpose of this paragraph, good cause shall mean unforeseen circumstances outside of the sponsor’s control or a showing that the sponsor is making a diligent effort to complete or execute the loan application or loan agreement.
    (d) Project sponsors shall provide reasonable financial assurance that project activities will be completed, including requirements for service providers and equipment suppliers or manufacturers to provide performance guarantees, insurance covering workers’ compensation, comprehensive general liability, vehicle liability, and property damage to the extent that coverage is available for project activities.
    (e) The Department shall have the primary responsibility for drafting the loan agreement and setting its terms. The loan agreement shall have terms to meet program requirements. Loan agreement covenants may vary for direct and leveraged loans. Projects being funded under (or pursuant to) different sections of the Act or as a result of different sources of pledged revenues may have different loan agreement provisions.
    (2) Pledged Revenues. The loan recipient shall make deposits of pledged revenues to a restricted or assigned debt service account and shall be responsible for the maintenance of that account.
    (a) Pledged revenues for projects sponsored by a local government shall be a minimum of 1.15 times the amount required to make each semiannual loan repayment unless the project sponsor establishes a restricted or assigned reserve account in an amount not less than the equivalent of two semiannual loan repayments. The pledged revenue coverage for the loan from the Department shall not be transferred or derived from coverage required by senior lien debt instruments.
    (b) Pledged revenues for projects sponsored by other than a local governmental agency shall be a minimum of 1.15 times the amount required to make each semiannual loan repayment and shall be secured with collateral having an appraised market value not less than 125% of the total of both the dollar amount owed on the property and the dollar amount of the SRF loan principal. The appraisal report must be less than 12 months old at the time the loan application is received. The loan applicant must own the real property in fee simple without any encumbrances on the title that would prevent sale of the property in case of default on the loan.
    (3) Legal Affirmation. When a loan agreement executed by a project sponsor is submitted to the Department for execution, it shall include an affirmation by the project sponsor’s legal counsel that:
    (a) The loan agreement constitutes a valid and legal obligation of the borrower;
    (b) The loan agreement specifies the revenues pledged to the repayment of the loan; and,
    (c) The pledge is valid and enforceable.
    (4) Security. The Department shall have no lien on or security interest in or claim on any monies or property except as expressly provided in the loan agreement and, for projects sponsored by other than a local government, the security interest agreement.
    (5) Assurance of Compliance. The project sponsor shall provide assurance that:
    (a) Records will be kept using generally accepted accounting practices. The Department, the Auditor General, and their agents shall have access to all records pertaining to the loan.
    (b) Project facilities will be properly operated and maintained and best management practices shall be continued, as appropriate.
    (c) Loan funds will not be used for the purpose of lobbying.
    (6) Disbursements. Disbursements to the project sponsor shall be for allowable invoiced costs, unless the project sponsor qualifies and is approved for advanced payments in accordance with subFlorida Statutes § 216.181(16) Disbursements shall be subject to the following requirements:
    (a) Requests for disbursements for construction, technical services, and for planning and design costs shall be accompanied by itemized summaries of the materials, labor, or services to identify the nature of the work performed. The disbursement package shall also include a statement that the construction or other services for which payment or reimbursement is sought has been satisfactorily performed;
    (b) The materials, labor, and services shall be part of the approved project scope; and,
    (c) The disbursement shall be due under the terms of the loan agreement, and there shall be money available under the loan agreement for payment.
    (7) Repayments. The project sponsor shall begin repaying a loan no later than the date scheduled under the loan agreement. The scheduled date shall be six (6) months after the estimated completion date or, for projects using interim financing to complete the project prior to receiving a SRF loan, six (6) months after the first available interim loan payoff date.
    (8) Loan Repayment Term.
    (a) Loan repayment periods for construction projects sponsored by a local governmental agency shall be limited to twenty (20) years or the useful life of the project, whichever is less. Loan repayment periods may be extended to a maximum of thirty (30) years or the useful life of the project, whichever is less, as allowed under the Act for projects to benefit a small community that is financially disadvantaged.
    (b) Repayment periods for construction loans sponsored by other than a local governmental agency shall be limited to twenty (20) years or the useful life of the project, whichever is less.
    (c) Repayment periods for planning and design loans shall be limited to ten (10) years.
    (9) Annual Certification. No later than three (3) months prior to the first loan repayment and annually thereafter until the final loan repayment is made, the project sponsor’s authorized representative or its chief financial officer shall submit a certification that:
    (a) Pledged revenue collections satisfy the rate coverage requirement;
    (b) The debt service account contains the funds required;
    (c) The restricted or assigned pledged revenue account contains the funds required, if applicable; and,
    (d) For loans awarded after July 17, 2017, the revenue generation system is in conformance with subparagraph 62-552.700(2)(i)3., F.A.C.
    (10) Remedies for Defaults. Remedies for delinquent loan repayment and other events of default shall be limited to those set forth in the loan agreement. Events of default shall include non-compliance with any of the terms of the loan agreement. No delay or omission to exercise any right or power accruing upon an event of default shall impair any such right or power or shall be construed to be a waiver of any such default or acquiescence therein.
Rulemaking Authority 403.8532 FS. Law Implemented Florida Statutes § 403.8532. History—New 4-7-98, Amended 8-10-98, 7-20-99, 7-17-17.