Section 117.92. Loans for facilities

(a) Loan proceeds for facilities may be used for land acquisition, construction, renovation and rehabilitation including planning and design costs.

(b) Loans for construction, renovation or rehabilitation will be approved only under the condition that construction, renovation or rehabilitation begins within 6 months of the loan execution date.

(c) The loan shall be secured by a mortgage which shall be recorded in the office of the recorder of deeds of the county in which the land is located.

(d) Mortgage title insurance in the aggregate amount of the loan, insuring the interest of the Department as mortgagee, subject only to exceptions approved by the Department, shall be procured and paid by the municipality and delivered to the Department.

(e) For construction, renovation or rehabilitation of facilities a copy of the approved plans and specifications shall be submitted to and will be retained by the Department. The municipality is responsible for complying with applicable Federal, State and local laws. If a change to the plans and specifications is required by a governmental agency or similar body, the municipality shall furnish additional labor and materials necessary to complete the project and the improvements in compliance with the changes to the plans and specifications. The municipality shall complete the facility project on or before the completion date as specified in the loan agreement unless an unforeseen condition occurs that prevents completion on the specified date. In this case, the municipality shall notify the Department of the reasons for the delay and the anticipated completion date. Additions or changes may not be made to the plans and specifications or to a construction contract without the prior approval of the original approving agencies. Written notification of these approvals, additions or changes shall be submitted to the Department.

(f) The Department may conduct periodic inspections during construction and will conduct a final inspection after completion and prior to issuance of the final payment from the note proceeds. In lieu of the final inspection, the Department will accept a copy of the official Department of Labor and Industry inspection letter and a copy of the official certificate of occupancy.

(g) Proceeds of loans for the construction, renovation or rehabilitation of facilities will be disbursed to the municipality as follows:

(1) Thirty percent at the time of settlement.

(2) An additional 50% when 50% of the total costs of construction, renovation or rehabilitation (the Facility Project) are completed to the satisfaction of the Department.

(3) The balance of the loan when (the Facility Project) is completed and inspected by the Department. Prior to final disbursement, the Department may require copies of certificates, opinions of counsel, permits, letters, grants, authorizations and resolutions and approvals of government authorities, which the municipality shall procure and retain in its possession including certificates, opinions of counsel, permits, letters, grants, authorizations, and resolutions and approvals from governmental authorities which the municipality shall promote and retain in its possession. The facility project constructed shall comply with applicable building, zoning and planning statutes, ordinances, regulations and restrictions. The facility project shall be completed in accordance with the plans and specifications and the municipality shall provide the Department with a certificate of occupancy prior to final loan disbursement.

(h) Proceeds of loans for the acquisition of a facility shall be disbursed as a lump sum disbursement at settlement.

The provisions of this § 117.92 adopted August 21, 1992, effective August 22, 1992, 22 Pa.B. 4315.

Notation

Authority

The provisions of this § 117.92 issued under section 7 of the Local Government Capital Project Loan Fund Act (53 P. S. § 6781-7).