401 Kar 49:090. Waste Tire Trust Fund Loan Program


Published: 2015

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      401 KAR 49:090. Waste Tire Trust Fund Loan Program.

 

      RELATES TO: KRS 224.43, 224.50

      STATUTORY AUTHORITY: KRS 224.10-100, 224.50-820,

224.50-834

      NECESSITY, FUNCTION, AND CONFORMITY: KRS 224.50-820

establishes the waste tire trust fund to be used for programs to eliminate

existing and prevent future accumulations of waste tire piles. KRS 224.50-834

requires the cabinet to establish the loan fund to make low interest loans

available to private interests. Pursuant to KRS 224.43-010 it is the policy of

the cabinet to encourage a regional approach to solid waste management. This

administrative regulation establishes eligibility requirements, application

requirements, and prioritization criteria to be used by the Environmental and

Public Protection Cabinet to administer this program.

 

      Section 1. General Eligibility Requirements. (1)

Any person regularly engaged in a recycling or recovered material processing

business, or if entering the field has made prior arrangements in the form of

written commitments for supplies, equipment and personnel, or a facility permitted

by the cabinet for incineration of waste tires for the recovery of energy may

apply for financial assistance from the waste tire trust fund for any project

that meets the criteria listed in KRS 224.50-834.

      (2) The applicant shall possess the legal authority

to construct or acquire, operate, and maintain the project for which loan

assistance is sought from the waste tire trust fund.

      (3) The applicant shall possess the legal authority

to incur a pledge to repay any loan assistance.

      (4) The project shall comply with goals and

objectives of KRS 224.50-824 and 224.50-834.

      (5) The proposed project cost estimates shall be

reasonable and attainable given the geographic location of the project, current

pricing trends, required professional services, and any other factors that may

have a bearing on the project.

      (6) The applicant shall assure continued operation

and maintenance of the project.

      (7) The proposed source of revenue shall be

sufficient to operate and repay any debt financing associated with the project.

      (8) The applicant shall have approval by resolution

from the local governing body as to its consistency with the approved area

solid waste management plan.

      (9) The applicant nor any of its key personnel nor

any third party operator shall:

      (a) Intentionally misrepresent or conceal any

material fact in the application;

      (b) Obtain or attempt to obtain the loan by

misrepresentation or concealment;

      (c) Have been convicted by final judgment of any felony

within five (5) years preceding the filing of the application; and

      (d) Been adjudged by an administrative agency or a

court to have violated the environmental protection laws or administrative

regulations of the United States, the Commonwealth or any other state, and the

cabinet determines that the conviction or adjudication is sufficiently probative

of the applicant's inability or unwillingness to operate the facility in a

lawful manner.

 

      Section 2. Application Submission Requirements and

Review Process. (1) The application form, DEP 0042, entitled "Waste Tire

Trust Fund Application for Loan Assistance" (October 1992) and its requirements

are hereby incorporated by reference. Copies may be obtained from the cabinet's

Division of Waste Management, 14 Reilly Road, Frankfort, Kentucky 40601

during the normal work hours of 8 a.m. to 4:30 p.m., Monday through Friday. The

applicant shall submit the original and three (3) copies of the completed

application form to the Division of Waste Management.

      (2)(a) The cabinet shall review and prioritize

applications in cycles. The first application cycle shall begin on May 1, 1993.

The cabinet shall accept applications from May 1, 1993 through COB June 30,

1993, at which time all applications received during this period shall be

reviewed and prioritized. Subsequent application cycles shall be annual,

beginning on August 1 and ending COB August 31, in each year that the balance

in the waste tire trust fund on June 30 exceeds $335,000.

      (b) The initial and subsequent cycles shall be

advertised in public notices, which shall be published pursuant to KRS 424.130

in major newspapers with statewide circulation and distributed to all county

judge executives and mayors of first and second class cities, as well as other

parties who have notified the division of an interest in submitting an application.

The public notice for the initial cycle shall be published no earlier than

April 10, 1993 and no later than April 24, 1993. For years in which subsequent

cycles will be held, the public notice shall be published no earlier than July

11 and no later than July 25.

      (3) The application shall be properly completed and

accurate.

 

      Section 3. Criteria for Prioritizing Project

Applications. The cabinet shall prioritize all acceptable applications received

for each application cycle using a scoring system that measures the degree to

which the proposed project:

      (1) Promotes reuse and recycling efforts of waste

tires or waste tire material;

      (2) Eliminates existing and prevents future waste tire

piles;

      (3) Satisfies the identified needs of the project

service area;

      (4) Efficiently serves the area geographically and

by population;

      (5) Is needed within the proposed service area;

      (6) Is a regional project; and

      (7) Is financially sound. The financial review

shall be conducted to consider, but not be limited to, the following:

      (a) Appropriateness of the type of revenues pledged

for repayment of a loan and operation and maintenance cost of the project;

      (b) Validity of the assumptions used to project any

revenues pledged to the project;

      (c) Assurance that revenues pledged to the project

will be collected;

      (d) Security of all other sources proposed to fund

the project costs;

      (e) Credit history of the applicant;

      (f) Reasonableness of the projections for operation

and maintenance cost of the project; and

      (g) Any legal restrictions on the applicant to

pledge the proposed revenues for repayment of a loan from the waste tire trust

fund or operation and maintenance of the project.

 

      Section 4. Conditions for Assistance from the Waste

Tire Trust Fund. (1) The applicant shall execute a loan agreement with the

cabinet that sets forth the terms and conditions for completion of the project,

and actions thereafter. This shall generally coincide with award of construction

or acquisition contracts for the project. No monies shall be released to the

applicant until the loan agreement is executed.

      (2) All recipients of loans from the waste tire

trust fund shall submit quarterly reports to the cabinet using the form DEP

0042A, entitled "Waste Tire Trust Fund Loan Report" (October 1992).

The form and its requirements are hereby incorporated by reference. Copies may

be obtained from the cabinet's Division of Waste Management, 14

Reilly Road, Frankfort, Kentucky, 40601, during the normal working hours of 8

a.m. to 4:30 p.m. Monday through Friday.

      (3) The applicant shall be responsible for the

repayment of any loan, and for the continued operation and maintenance of any

facility or other project funded by the cabinet. If the project is to be

operated, maintained or managed by a third party under contract, management

agreement, or written lease, the applicant shall continue to be responsible for

compliance with the requirements of this section.

      (4) Upon determination of the actual bid cost of a

project, the funding awarded by the cabinet may be increased by up to five (5)

percent of the original funding commitment. Five (5) percent of the funds

committed shall be reserved for this purpose until the funded projects are

completed.

      (5) Funds shall be released to the applicant on a

monthly basis, for actual project costs incurred. An itemized list of

expenditures with copies of invoices or other supporting documentation shall be

submitted to the cabinet for payment.

      (6) The applicant, upon completion of the project,

funded by the waste tire trust fund, shall comply with KRS Chapters 109 and 224

and all administrative regulations pertaining to solid waste management.

      (7) The applicant shall retain ownership of the

facilities and equipment financed by the waste tire trust fund during the

useful life of the facility or until the final repayment of the loan, whichever

is shorter.

       (8) Any proposed change in the project or in the

information provided in the original application, shall require prior approval

of the cabinet. The cabinet may require approval by the local governing body.

      (9) The interest rate shall be established in the

loan agreement and shall be based on the index rate at the time of the loan

less two (2) percent. The index rate is the average of the Bond Buyer's Index

of twenty (20) G. O. Bonds as published weekly in the Bond Buyer (a financial

newspaper circulated in New York) calculated based on the weeks falling within

each calendar quarter. This average shall be rounded to the nearest one-tenth

(.1) of one (1) percent.

      (10) Interest shall be payable to the cabinet

semiannually beginning with the next successive interest payment date

established in the loan agreement after the applicant receives funds.

      (11)

Principal shall be payable to the cabinet semiannually beginning with the next

successive principal payment date established in the executed loan agreement.

The total term of principal repayment shall not exceed thirty (30) years, or

the useful life of the facilities and equipment financed, whichever comes

first. (19 Ky.R. 1245; Am. 1579; 2028; eff. 3-12-93; recodified from 401 KAR

49:220, 11-8-96; TAm eff. 8-9-2007; recodified from 401 KAR 46:060; 7-13-15.)

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