| (a) Board Participation. Unless otherwise directed
by legislation, the board will only use the SWIFT or SWIRFT to provide
financial assistance for all or a part of the cost to construct the
excess capacity of a water plan project where:
(1) at least 20 percent of the total facility capacity
of the proposed project will serve existing need; or
(2) the applicant will finance at least 20 percent
of the total project cost from sources other than Board Participation
from the SWIFT and SWIRFT.
(b) Application for Assistance. In addition to the
information required in §363.12 of this chapter (relating to
General, Legal, and Fiscal Information) and §363.1307 of this
subchapter (relating to Pre-design Funding Option) and any other information
that may be required by the executive administrator or the board,
the applicant shall provide:
(1) a proposed schedule for purchase of the board's
interest in the project;
(2) information to demonstrate the findings required
in §363.1309 of this subchapter (relating to Findings Required);
(3) if payment under the master agreement is based
either wholly or in part from revenues of contracts with others, a
copy of any actual or proposed contracts under which applicant's gross
income is expected to accrue. Prior to release of funds, an applicant
shall submit executed copies of such contracts to the executive administrator;
and
(4) if an election is required by law to authorize
participation in the project, the executive administrator may require
applicant to provide the election date and election results as to
each proposition necessary for the participation of the applicant
as part of the application.
(c) Determination. The board may provide funding for
board participation from SWIFT and SWIRFT when the information available
to the board is sufficient for the board to determine that:
(1) it is reasonable to expect that the state will
recover its investment in the facility based upon a determination
that the revenue to be generated by the projected number of customers
served by the facility will be sufficient to purchase the excess capacity
owned by the state;
(2) the estimated cost of the facility as set forth
in the application exceeds the current financing capabilities of the
area to be served by the facility based on a review of the existing
rates of the applicant available for payment of the facility collected
from the number of connections at the end of construction and other
revenues available for payment of the facility;
(3) the optimum regional development cannot be reasonably
financed by local interests based on an assessment of the estimated
cost to construct the alternate facility and the revenue to be generated
by the projected number of customers of the facility;
(4) the public interest will be served by acquisition
of the facility based on a determination that the cost of the facility
to the public is reduced by the board's participation in the facility;
and
(5) the facility to be constructed or reconstructed
contemplates the optimum regional development which is reasonably
required under all existing circumstances of the site based on a determination
that design capacity of the components of the facility are sufficient
to meet the foreseeable needs of the area over the useful life of
the facility.
(d) Master Agreement. The board and the political subdivision
shall enter into and execute a master agreement the text of which
shall include, but not be limited to, the responsibilities, duties,
and liabilities of each party, including the responsibility of a designated
political subdivision to assure that proper procedures are observed
in advertising for bids and selecting a bidder to construct the project;
the board's cost of acquisition; procedures for disbursement of board
funds for the project; recognition of a political subdivision's right
of first refusal prior to any sale of the board's interest in the
project; a non-competitive clause; a schedule for purchase of the
board's interest in the project by the political subdivision; and
any other provisions deemed appropriate and necessary by the board.
(e) Construction. On projects to be constructed or
enlarged by a political subdivision or subdivisions, one political
subdivision may be designated under an agreement with the board to
act as manager for the project and perform the functions customarily
performed by a manager-owner.
(f) Disbursement of State Funds. State funds expended
for the acquisition and/or development of facilities in a project
shall be disbursed in accordance with the provisions of the master
agreement and any other contracts by the board pursuant thereto.
(g) Acquisition of Board's Ownership Interest.
(1) A prospective political subdivision purchaser of
the board's ownership interest in a facility or of the use of such
board interest other than under terms specified in the master agreement
shall submit an application in the form and number prescribed by the
executive administrator. The executive administrator may request any
additional information needed to evaluate the application, and may
return any incomplete application.
(2) Upon receipt of an application by a prospective
purchaser of the board's ownership interest in a facility or use of
the facility, the board will send notice of its receipt by regular
United States mail to all co-owners of the facility, and any users
of the facility or water from the facility.
(3) The application shall be scheduled on the board's
agenda, and representatives of the prospective purchaser and other
interested parties shall be notified of the time of the meeting. At
the conclusion of the meeting to consider the project, the board may
resolve to approve, disapprove, approve with conditions, or continue
consideration of the application. A commitment will include a date
after which the financial assistance will no longer be available.
That date shall be the end of that month which is twelve months from
the month of board commitment.
(4) If the board approves the application, a transfer
resolution will be adopted which shall prescribe the terms and conditions
necessary for the sale, transfer, or lease, if such terms have not
been specified in the master agreement between the board and political
subdivision.
(5) Before the board's adoption of the transfer resolution,
the executive administrator shall negotiate a transfer agreement with
the prospective purchaser regarding the sale, transfer, or lease of
board-owned interests. The transfer agreement shall include the interest
transferred, the character of the interest transferred, the formula
used to compute the price to be paid for the facilities to be acquired,
provisions governing lease or rental of facilities, a hold harmless
clause, recognition of the right of first refusal of any of the participating
political subdivisions, a clause stating the conditions under which
the contract may be terminated, and other provisions appropriate to
the subject of the transfer agreement including provisions setting
standards for operation and maintenance of the project. The attorney
general of Texas shall approve as to legality any contract authorized
under this subchapter.
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