§ 40:2826 — Loan conditions and repayment

§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.

Legislative History

Acts 1997, No. 480, §2, eff. June 30, 1997; Acts 2003, No. 67, §3, eff. May 28, 2003.