(1) The Board of Water Resources may make loans to cities, towns, metropolitan water districts, water conservancy districts, improvement districts, special improvement districts, or special service districts within the state for the acquisition or construction of new or existing water systems or the improvement or extension of those systems from money appropriated for the purpose of this chapter. (2) (a) Cities, towns, or districts which participate in this program shall submit an application for money to the Board of Water Resources. (b) The application may request a loan to cover all or part of the cost of an eligible project. (c) Requests for loans shall be submitted in a form and shall include information as the Board of Water Resources prescribes. (3) (a) The Board of Water Resources shall establish criteria for determining eligibility for loans and shall determine appropriate priorities among projects. (b) Money received from the repayment of loans shall be deposited into the Water Resources Conservation and Development Fund created in Section 73-10-24 and be available for additional loans under the administration of the Board of Water Resources. (c) In determining priorities for eligible projects, the Board of Water Resources shall consider: (i) probable growth of population due to actual or prospective economic development in an area; (ii) possible additional sources of state and local revenue; (iii) opportunities for expanded employment; (iv) present or potential health hazards; (v) water systems which do not meet minimum state standards; (vi) cities, towns, or districts which have insufficient water to meet current demands; (vii) feasibility and practicality of the project; (viii) per capita cost of the project; (ix) per capita income of the residents in the area; (x) the borrowing capacity of the city, town, or district and its ability to sell bonds in the open market; and (xi) the availability of federal money for the project. (4) (a) The Board of Water Resources shall consult with the Governor's Advisory Council on Community Affairs in the establishment of priorities but that advice is not binding upon the Board of Water Resources. (b) If an application is rejected, the Board of Water Resources shall notify the applicant stating the reasons for the rejection. (5) The Board of Water Resources shall review the plans and specifications for the project prior to approval and may condition approval and the availability of money on assurances the Board of Water Resources considers necessary to ensure that the proceeds of the loan will be used to pay the cost of the project and that the project will be completed. (6) Any loan shall specify the terms for repayment and may be evidenced by general obligation bonds, revenue bonds, special assessment bonds, or other bonds or obligations legally issued by the appropriate city, town, metropolitan water district, water conservancy district, improvement district, special improvement district, or special service district and purchased by the Board of Water Resources pursuant to the authority for the issuance that exists at the time of the loan. (7) (a) Upon approval of an application, the Board of Water Resources shall advise the applicant and may provide money as a loan to cover all or part of the costs of eligible projects. (b) Costs of an eligible project may include all costs of acquisition and construction as well as costs incurred for preliminary planning to determine the economic and engineering feasibility of a proposed project, the engineering, architectural, legal, fiscal, and economic investigations and studies, surveys, designs, plans, working drawings, specifications, procedures, and other action necessary to the project and its financing; the cost of erection, building, acquisition, modification, improvement, or extension of water system facilities and the inspection and supervision of the construction of such facilities. (8) A loan may not include any project costs for which the applicant receives federal financial assistance, other than federal loans that must be repaid by the applicant.
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