18 AAC 76.255 - Repayment; finance charges

(a) Except as provided in 18 AAC 76.230 for a disadvantaged system, the amortization schedule for financial assistance from the Alaska drinking water fund will be negotiated between the borrower and the department. The department will not negotiate an amortization schedule that exceeds 30 years. Repayment of financial assistance must begin within one year after the date of initiation of operation of the facility, or within one year after the date of a refinancing under 18 AAC 76.205(a) (2). The department will apply amortization repayments first toward any penalties owed, second toward any fees owed, third toward the interest, and fourth toward the principal.

(b) When the department makes an offer of financial assistance, the department will establish a fixed finance charge that includes the fee specified in 18 AAC 76.257(a), interest, and any adjustment described in 18 AAC 76.252(a) or (c), as appropriate. The finance charge will be assessed on financial assistance as follows:

(1) for a contract term over 20 years and up to 30 years, accrual of finance charges begins one year after the date of the first payment to the borrower; the department will assess a finance charge at a rate of two percent plus 75 percent of The Bond Buyer's Municipal Bond Index's Current Day - Yield to Maturity that is greater than four percent as published on the date that the department extends the financial assistance offer; the finance charge will be determined using the calculation 2 + [0.75 x (Bond Index - 4)], where "Bond Index" is equal to The Bond Buyer's Municipal Bond Index's Current Day - Yield to Maturity;

(2) for a contract term of five to 20 years, accrual of finance charges begins one year after the date of the first payment to the borrower; the department will assess a finance charge at a rate of one and one-half percent plus 62.5 percent of The Bond Buyer's Municipal Bond Index's Current Day - Yield to Maturity that is neater than four percent as published on the date that the department extends the financial assistance offer; the finance charge will be determined using the calculation 1.5 + [0.625 x (Bond Index - 4)], where "Bond Index" is equal to The Bond Buyer's Municipal Bond Index's Current Day - Yield to Maturity;

(3) for a contract term of less than five years, accrual of finance charges begins one year after the date of the first payment to the borrower; the department will assess a finance charge of one percent plus 50 percent of The Bond Buyer's Municipal Bond Index's Current Day - Yield to Maturity that is greater than four percent as published on the date that the department extends the financial assistance offer; the finance charge will be determined using the calculation 1 + [0.5 x (Bond Index - 4)], where "Bond Index" is equal to The Bond Buyer's Municipal Bond Index's Current Day - Yield to Maturity;

(4) for financial assistance that is repaid within one year after the first payment to the borrower, the department will assess a finance charge equal to one-half of one percent of the total amount of financial assistance disbursed.

(c) A borrower under a financial assistance agreement under 18 AAC 76.200 - 18 AAC 76.265 that is in effect on December 29, 2000 may, within one year after that date convert the financial assistance agreement to a new finance rate, if all other terms of the agreement remain in effect.

Notes

18 AAC 76.255

Eff. 8/2/97, Register 143; am 12/29/2000, Register 156; am 3/14/2002, Register 161; am 11/10/2007, Register 184; am 9/10/2017,Register 223, October 2017

Authority: AS 46.03.020

AS 46.03.036

AS 46.03.039

AS 46.03.720