94- 457 C.M.R. ch. 305, § 3

Current through 2024-44, October 30, 2024

Section 457-305-3 - Eligibility

A. To be eligible for financial assistance under the program, a borrower must demonstrate at least one of the following:

1. The borrower is the owner or operator of an existing underground oil storage facility or underground tank which a) is located on premises which are not used solely for residential, including rental residential, purposes; and b) is leaking or has been identified by the Department of Environmental Protection as posing an environmental threat, or removal is required by applicable law or, in the case of an applicant for loan insurance, removal, disposal or replacement of all or any part of a facility is required by applicable law;

2. The borrower is required by applicable law or regulation to install equipment related to air quality improvement;

3. The borrower is constructing, replacing or renovating an aboveground tank or an aboveground facility and the work is being supervised by a State registered professional engineer with training and experience in aboveground oil storage facility installation; or

4. The borrower is renovating an underground oil storage tank or facility, the work is supervised by an underground oil storage tank installer certified by the State Board of Underground Storage Tank Installers and the estimated cost of the work is greater than $1,000. Financial assistance in the form of a grant shall not be available for this purpose.

B. To be eligible for financial assistance under the program a borrower must demonstrate each of the following:

1. Financial need for the assistance, except if the borrower is a unit of a local government.

2. A reasonable likelihood that the borrower will be able to repay the loan.

3. Any financial assistance will be used only for a project.

C. A borrower shall be eligible for grants and direct loans in accordance with the following criteria:

1. Except as otherwise provided in this Rule, a borrower shall be eligible for a grant if: a) the borrower is a nonprofit entity other than a unit of local government; and b) the borrower's debt service coverage is less than 1.0; and c) the borrower has no other readily available source of funds to undertake the project.

2. A borrower that is not eligible under subsection 3(C)(1) shall be eligible for a deferred loan if the borrower's debt service coverage is less than 1.0. The terms and conditions of such deferred loan shall include the terms set forth in subsection 3(C)(9) hereof.

3. A borrower shall be eligible for a loan with interest at the rate of 0% if the borrower's debt service coverage is 1.0 or greater, but less than 1.2;

4. Subject to the limitations of subsection 3(C)(7) a borrower shall be eligible for a loan with interest at the rate of 6% below the high prime rate of interest as published by the Wall Street Journal on the date of the commitment letter if the borrower's debt service coverage is 1.2 or greater, but less than 1.5. In no event shall a loan to any borrower made under this subsection be at a rate less than 2%.

5. Subject to the limitations of subsection 3(C)(7), a borrower shall be eligible for a loan with interest at the rate of 2% below the high prime rate of interest as published by the Wall Street Journal on the date of the commitment letter if the borrower's debt service coverage is 1.5 or greater, but less than 2.5.

6. Subject to the limitations of subsection 3(C)(7), a borrower shall be eligible for a loan with interest at the high prime rate of interest as published by the Wall Street Journal on the date of the commitment letter, if the borrower's debt service coverage is 2.5 or greater, but less than 3.0.

7. A borrower with debt service coverage of 3.0 or greater or net worth of $750,000 or greater shall not be eligible for assistance under the program, unless the borrower can demonstrate financial need to the satisfaction of the Authority.

8. Notwithstanding any provision of this Section 3, a borrower that is a unit of a local government shall be eligible for a loan with interest at the rate of 2% below the high prime rate of interest as published by the Wall Street Journal on the date of the commitment letter.

9. All deferred loans made pursuant to subsection 3(C)(2) of this Rule shall be evidenced by a commercial note which shall bear interest at the rate of 2% below the high prime rate as published by the Wall Street Journal commencing on the date of the third anniversary of the Note, provided however, if the borrower provides financial statements satisfactory to the Authority prior to the third anniversary of the Note, the Authority may revise the commercial note as follows:

a For any borrower that obtained a deferred loan, the proceeds of which were to be used for an underground or aboveground oil storage facility or tank project, the repayment terms will be set in accordance with Section 3;

b For any borrower that obtained a deferred loan the proceeds of which were used for a project relating to the installation of equipment related to air quality improvement and that had a debt service coverage of less than 1.0 for two out of three of the years for which the loan was deferred, the loan shall be deemed to be a grant, provided that i) no borrower who owns 15 or more gasoline service stations may receive a grant and ii) no grant may be greater than $35,000 per gasoline service station owned by a borrower.

c For any borrower that obtained a deferred loan the proceeds of which were used for a project relating to the installation of equipment related to air quality improvement and that had a debt service coverage of greater than 1.0 for two out of three of the years for which the loan was deferred, repayment terms will be set in accordance with this Section 3.

D. A borrower may obtain a loan for a project that has already been completed if the borrower provides satisfactory evidence of compliance with each of the following criterion.

1. The project was completed no later than nine months previous to the date the complete application is received by the Authority.

2. The loan is made to the same individual or entity, who operated the project at the time the project was undertaken.

3. The loan will assist in maintaining a viable business.

4. Terms shall be set in accordance with section 3(C) hereof, provided however, that in the event the borrower would be eligible for a grant pursuant to section 3(C)(1) or a deferred loan pursuant to section 3(C)(2), the application shall be denied unless the borrower can demonstrate compelling need for the loan or grant, in the sole discretion of the Chief Executive Officer.

94- 457 C.M.R. ch. 305, § 3