A. Financial assistance shall be provided only to qualified borrowers that:

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(1)     meet the requirements for financial capability set by the division to assure sufficient revenues to operate and maintain the eligible project for its useful life, if applicable, and to repay the financial assistance;

(2)     agree to operate and maintain the eligible project facility so that the project facility will function properly over its structural and material design life, if applicable;

(3)     agree to maintain separate project accounts, to maintain project accounts properly in accordance with generally accepted governmental accounting standards and to conduct an audit of the project’s financial records;

(4)     provide a written assurance, signed by an attorney or other authorized representative, that the qualified borrower has or will acquire proper title, easements and rights of way to the property upon or through which the eligible project facility proposed for funding is to be constructed or extended;

(5)     require the contractor of the eligible project to post a performance and payment bond in accordance with the requirements of Section 13-4-18 N.M. Stat. Ann. and its subsequent amendments and successor provisions;

(6)     provide a written notice of completion of the eligible project;

(7)     appear on the priority list of the fund, regardless of rank on such list; and

(8)     provide such information to the division as required by the commission in order to comply with the provisions of the Clean Water Act and state law.

B. Loans shall be made only to qualified borrowers that establish one or more dedicated sources of revenue to repay the money received from the commission and to provide for operation, maintenance and equipment replacement expenses. Notwithstanding any existing statute to the contrary, a qualified borrower may do any of the following:

(1)     obligate itself to pay to the commission at periodic intervals a sum sufficient to provide all or any part of bond debt service with respect to the bonds recommended by the commission and issued by the board to fund the loan for the eligible project and pay over the debt service to the account of the eligible project for deposit to the fund;

(2)     fulfill any obligation to pay the commission by the issuance of bonds, notes or other obligations in accordance with the laws authorizing issuance of state or local authority obligations; provided, however, that, notwithstanding the provisions of Section 4-54-3 or 6-15-5 N.M. Stat. Ann. or other statute or law requiring the public sale of local authority obligations, the obligations may be sold at private sale to the commission at the price and upon the terms and conditions the local authority shall determine;

(3)     levy, collect and pay over to the commission and obligate itself to continue to levy, collect and pay over to the commission the proceeds of one or more of the following:

(a) sewer or waste disposal service fees or charges; (b) licenses, permits, taxes and fees;

project; or

(c) special assessments on the property served or benefited by the eligible (d) other revenue available to the qualified borrower;

(4)     undertake and obligate itself to pay its contractual obligation to the commission solely from the proceeds from any of the sources specified in Paragraph (3) of this subsection or, in accordance with the laws authorizing issuance of qualified borrower obligations, impose upon itself a general obligation pledge to the commission additionally secured by a pledge of any of the sources specified in Paragraph (3) of this subsection; or

(5)     enter into agreements, perform acts and delegate functions and duties as its governing body shall determine is necessary or desirable to enable the division as agent for the commission to fund a loan to the qualified borrower to aid it with an eligible project.

C. Each loan made by the division as agent for the commission shall provide that repayment of the loan shall begin not later than one year after completion of the eligible project for which the loan was made and shall be repaid in full no later than thirty years after completion of the eligible project. All principal and interest on loan payments shall be deposited in the fund.

D. Financial assistance shall be made with an annual interest rate to be five percent or less as determined by the commission.

E. A zero-percent interest rate may be approved by the division when the following conditions have been met by the local authority:

(1)     the local authority’s average user cost is greater than one and eighty-two hundredths percent of the local authority’s per capita income; and

(2)     the local authority’s per capita income is less than three-fourths of the statewide per capita income.

F. A local authority may use the proceeds from financial assistance received under the Wastewater Facility Construction Loan Act to provide a local match or any other nonfederal share of an eligible project as allowed pursuant to the Clean Water Act.

G. Financial assistance received pursuant to the Wastewater Facility Construction Loan Act shall not be used by a qualified borrower on any eligible project 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].

H. Financial assistance shall be made only to qualified borrowers that employ or contract with a New Mexico licensed professional engineer to provide and be responsible for engineering services on the eligible project. Such services include an engineering report, construction contract documents, supervision of construction and start-up services.

I. Financial assistance shall be made only for eligible items. For financial assistance composed entirely of state funds, eligible items include the costs of engineering reports, contracted engineering design, inspection of construction, special engineering services, start-up services, contracted construction, materials purchased or equipment leased for force account construction, land or acquisition of existing facilities, but eligible items do not include the costs of water rights and local authority administrative costs. For financial assistance made from federal funds, eligible items are those identified pursuant to the Clean Water Act.

J. In the event of default by the qualified borrower, the commission may enforce its rights by suit or mandamus or may utilize all other available remedies under state law.