(a) Before the executive administrator may execute a linked deposit agreement, a lending institution shall submit to the executive administrator:      
        (1) the application of a person determined by the eligible lending institution to be eligible and creditworthy to receive a loan according the criteria of the institution;       
        (2) a draft loan agreement with such person that:                  (A) identifies the principal amount of the loan which shall not exceed $250,000;                   (B) identifies the interest rate to be paid by the borrower which shall not exceed the interest rate paid by the eligible lending institution to the board plus four percent;                   (C) includes a repayment schedule which identifies the dates on which payments are due from the loan recipient to the lending institution;                   (D) limits the use of the funds to a conservation project certified pursuant to subsection (a)(3) of this section; and                   (E) contains such other terms and conditions determined by the eligible lending institution in its sole discretion to be reasonable for the purposes of a private loan agreement;         
        (3) a certification from:                  (A) the eligible lending institution of the interest rate applicable to the proposed loan;                   (B) a director of a soil and water conservation district for the district in which the project is located certifying that:                      (i) the loan recipient has a soil and water conservation plan approved by the district; and                       (ii) the project furthers or implements such plan; and           
        (4) such other information or documentation as determined by the executive administrator to be reasonable and necessary to fulfill the objectives of this chapter.       
      (b) Before the executive administrator executes a linked deposit agreement, the executive administrator shall review the information submitted in this section and determine that:      
        (1) the lending institution is an eligible lending institution as defined in §367.2 of this chapter;       
        (2) the documents submitted by the lending institution comply with the requirements of this chapter; and       
        (3) execution of the linked deposit agreement fulfills the purposes and intent of this chapter and the public interest.       
     Source Note:        The provisions of this §367.16 adopted to be effective July 6, 2004, 29 TexReg 6348