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



(1)  The project conforms with the state intended use
plan to provide safe drinking water which meets section 1452 of the Federal
Act;



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



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



(b)  Except for subsidies to disadvantaged
communities made consistently with section 1452(d) of the Federal Act, all
loans 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 with
repayment commencing not later than one year after completion of the project
for which the loan is made, and be fully amortized not later than twenty years
after project completion, except that for disadvantaged communities an extended
repayment term may be provided as allowed by the Federal Act;



(3)  Require the recipient of the loan to establish a
dedicated 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 faith
and credit (a general obligation payable from its general fund), of special
assessments, of revenues from an undertaking, system or improvements, including
user charges, or of any other source of revenue; and



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