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.)