The procedure and method for setting fixed interest rates includes the following.     
       (1) The executive administrator will set fixed interest rates under this section for loans on a date that is five business days prior to the political subdivision's adoption of the ordinance or resolution authorizing its bonds and not more than 45 days before the anticipated closing of the loan from the board. After 45 days from the establishment of the interest rate of a loan, rates will be reconsidered, and may be extended only with the approval of the executive administrator.      
       (2) For loans from the Rural Water Assistance Fund, the executive administrator will set the interest rates in accordance with the following:                (A) to the extent  that the source of funding is provided from bond proceeds issued through the Water Development Fund specifically designated for this fund, the lending rate scale(s) will be determined as provided under §363.33(b) of this title (relating to Interest Rates for Loans and Purchase of Board's Interest in State Participation Projects); or                 (B) for loans where the interest rates calculated in subparagraph (A) of this paragraph results in a true interest cost that is less than the minimum true interest cost of the lending rate scale established for those funds, interest will be calculated at a rate increased to match the minimum true interest costs so the board may recover all costs attributed to the bonds sold by the board; or                 (C) for loans  funded by the board with proceeds of bonds, the interest for which is intended to be tax exempt for purposes of federal tax law, the executive administrator will limit the interest set pursuant to this subsection at no higher than the rate permitted under federal tax law to maintain the tax exemption for the interest on the board's bonds.        
       (3) The board, at its discretion, may require applicants to receive a portion of the project funding from other board loan programs.      
     Source Note:        The provisions of this §365.5 adopted to be effective January 1, 2002, 26 TexReg 11031; amended to be effective May 6, 2003, 28 TexReg 3735; transferred effective February 15, 2020, as published in the January 24, 2020 issue of the Texas Register, 45 TexReg 593