A. Financial assistance shall be provided only to local authorities that:

(1)     meet the requirements for financial capability set by the authority to assure sufficient revenues to operate and maintain the drinking water facility for its useful life and to repay the financial assistance;

(2)     appear on the priority list for the fund, developed and maintained by the department, regardless of rank on such list;

(3)     are considered by the authority and the department ready to proceed with the project;

(4)     demonstrate adequate technical and managerial capability to operate the drinking water facility for its useful life; and

(5)     meet other requirements established by the authority and state laws, including, but not limited to, procurement, recordkeeping and accounting.

B. Loans from the fund shall be made by the authority only to local authorities that establish one or more dedicated sources of revenue to repay the money received from the fund and to provide for operation, maintenance and equipment replacement expenses of the drinking water facility proposed for funding.

C. The authority, with assistance from the department, shall establish procedures addressing methods to provide financial assistance to local authorities in accordance with the criteria set forth in the Safe Drinking Water Act, Section 1452(a)(3).

D. Each loan made by the authority shall provide that repayment of the loan shall begin not later than one year after completion of construction of the drinking water facility for which the loan was made and shall be repaid in full no later than twenty years after completion of the construction, except in the case of a disadvantaged community in which case the authority may extend the term of the loan, as long as the extended term:

(1)     terminates not later than the date that is thirty years after the date of project completion; and

(2)     does not exceed the expected design life of the project.

E. Financial assistance may be made with an annual interest rate which is less than a market rate as determined by procedures established by the authority and reported annually in the intended use plan prepared by the department, with the assistance of the authority.

F. Financial assistance pursuant to the Drinking Water State Revolving Loan Fund Act shall not be given to a local authority, if the authority determines that the financial assistance is for a drinking water facility to be constructed in fulfillment or partial fulfillment of requirements made of a subdivider under the provisions of the Land Subdivision Act N.M. Stat. Ann. § 47-5-1 to 47-5-8 or the New Mexico Subdivision Act [N.M. Stat. Ann. Chapter 47, Article 6].

G. Financial assistance may be made to local authorities that employ or contract with a registered professional engineer to provide and be responsible for engineering services on the drinking water facility. Such services, if the authority determines such services are needed, may include, but are not limited to, an engineering report, facility plans, environmental evaluations, construction contract documents, supervision of construction and start-up services.

H. Financial assistance shall be made only for eligible items as described by authority procedures and as identified pursuant to the Safe Drinking Water Act.