[§340E-37]  Drinking water fund;conditions.  (a)  No loan or other financial assistance shall be made fromthe drinking water fund for any project unless:

(1)  The project conforms with the state intended useplan to provide safe drinking water which meets section 1452 of the FederalAct;

(2)  The project is certified by the director as beingentitled to priority over other eligible projects on the basis of financial aswell as drinking water quality needs; and

(3)  In the case of water treatment works, theapplicant for the loan or other financial assistance commits to maintain thewater treatment works efficiently and properly after its construction.

(b)  Except for subsidies to disadvantagedcommunities made consistently with section 1452(d) of the Federal Act, allloans from the drinking water fund shall:

(1)  Be made at or below market interest rates,including interest free loans;

(2)  Require payments of principal and interest withrepayment commencing not later than one year after completion of the projectfor which the loan is made, and be fully amortized not later than twenty yearsafter project completion, except that for disadvantaged communities an extendedrepayment term may be provided as allowed by the Federal Act;

(3)  Require the recipient of the loan to establish adedicated source of revenue (or in the case of a privately owned system,demonstrate that there is adequate security) for the repayment of the loans. For a county, the dedicated source may be a pledge of the county’s full faithand credit (a general obligation payable from its general fund), of specialassessments, of revenues from an undertaking, system or improvements, includinguser charges, or of any other source of revenue; and

(4)  Be repaid, both principal and any interest, tothe credit of the drinking water fund. [L 1997, c 218, pt of §2]