(a) Commission analysis. The commission will consider all relevant information in the application together with the executive director's findings and recommendations.     
      (b) Consideration of applications for preliminary and final approval.      
        (1) Applications for financial assistance in the amount of $10 million or less will be considered by the commission for final approval without going through the preliminary approval process prescribed in subsection (c) of this section if the financial assistance is to be used for a project for which the department has primary responsibility, including for the payment of:                  (A) local participation in a highway improvement project under Transportation Code, Chapter 222, Subchapter C, and Chapter 15, Subchapter E of this title; or                   (B) the relocation of utilities necessary for a project under Transportation Code, Chapter 203, Subchapter E, and Chapter 21, Subchapter P of this title.         
        (2) Applications for financial assistance that are not subject to paragraph (1) of this subsection must be submitted to the commission for consideration for preliminary and final approval separately unless, for a particular application, the commission waives the preliminary approval requirement for that application. In determining whether to waive the preliminary approval requirement for an application, the commission will consider the complexity and size of the project, the type of infrastructure or asset involved, the type and complexity of the financial assistance requested, the financial status of the applicant, the financial feasibility of the project, and the need to expedite the financing of the project.       
        (3) Applications that are submitted to the commission for final approval without first being considered for preliminary approval must meet all the requirements and are subject to all the conditions applicable either to preliminary or final approval of financial assistance, except that the negotiation process under subsection (c)(3) of this section may be completed after final approval.       
      (c) Prioritization and preliminary approval. For applications that must be considered for preliminary approval, the executive director will establish deadlines for the submittal of complete applications in accordance with commission policies. As soon as practicable after each application deadline, the executive director shall present all complete applications submitted by the deadline with the executive director's analysis of the application and the executive director's findings and recommendations, including recommendations on prioritizing the applications.      
        (1) Considerations. The executive director's analysis and recommendations to the commission must demonstrate the executive director's consideration of:                  (A) whether the project is on the state highway system;                   (B) the transportation need for and anticipated public benefit of the project;                   (C) the present and projected financial condition of the bank;                   (D) potential social, economic, and environmental impacts and benefits of the project;                   (E) conformity with the purposes of the bank;                   (F) evidence of local public support;                   (G) rapidity of loan repayment;                   (H) plan of finance;                   (I) comparison of the proposed financial assistance to other funding alternatives;                   (J) whether the project is on the department's 24-month letting schedule; and                   (K) any other relevant consideration.         
        (2) Project requirements. The commission may grant preliminary approval of an application for financial assistance from the bank if it finds that:                  (A) the project is consistent with the Statewide Long-Range Transportation Plan and, if appropriate, with the metropolitan transportation plan developed by an MPO;                   (B) if the project is in a Clean Air Act non-attainment area, the project will be consistent with the Statewide Transportation Improvement Program, with the conforming plan and Transportation Improvement Program for the MPO in which the project is located (if necessary), and with the State Implementation Plan;                   (C) the project will improve the efficiency of the state's transportation systems;                   (D) the project will expand the availability of funding for transportation projects or reduce direct state costs; and                   (E) the application shows that the project and the applicant are likely to have sufficient revenues to assure repayment of the financial assistance.         
        (3) Authorized actions. By granting preliminary approval, the commission authorizes the executive director to negotiate:                  (A) the project's limits, scope, definition, design, and any other factors that may affect the financing of the project;                   (B) the amount, type, and timing of disbursements of financial assistance;                   (C) the interest rates, including subsidies;                   (D) the fees;                   (E) the charges;                   (F) the repayment schedules;                   (G) the term to maturity of any financial assistance;                   (H) the collateral securing the financial assistance;                   (I) the appropriate covenants applicable to the financial assistance;                   (J) the default provisions; and                   (K) all other provisions necessary to complete an agreement under Subchapter E of this chapter (relating to Financial Assistance Agreements).         
      (d) Social, economic, and environmental impact.      
        (1) Before final approval is granted under subsection (e) of this section, the department or the applicant must complete a study of the social, economic, and environmental impact of the project. The study must meet all requirements for a federal or state project as if the project had been undertaken directly by the department.       
        (2) For a project not on the state highway system, the applicant shall be responsible for completing required studies of social, economic, and environmental impacts, unless the applicant and the department agree otherwise. If the department agrees to be responsible for these studies, then any costs will be charged according to the department's local participation agreement.       
        (3) For a project on the state highway system, the department will be responsible for completing required studies of social, economic, and environmental impacts with any costs to be charged to the project.       
      (e) Final approval. After preliminary approval under subsection (c) of this section, if required, the completion of negotiations under subsection (c)(3) of this section unless excepted under subsection (b)(3) of this section, and the approval of the social, economic, and environmental study required by subsection (d) of this section, the commission may grant final approval if it determines that:      
        (1) Providing financial assistance will protect the public's safety and prudently provide for the protection of public funds, while furthering the purposes of this chapter; and       
        (2) The project will provide for all reasonable and feasible measures to avoid, minimize, or mitigate for adverse environmental impacts.       
      (f) Postponement. The commission may postpone final approval if it finds that the current or projected financial condition of the bank warrants this action.     
      (g) Contingencies. The commission may make its preliminary or final approval contingent on further actions by the applicant, including making changes in the application, levying taxes, and maintaining specified conditions necessary to assure repayment.     
      (h) Order of approval or disapproval. Approval or disapproval of financial assistance, whether preliminary or final, will be by written order of the commission and will include the rationale, findings, and conclusions on which approval or disapproval is based. Approval or disapproval will be in the sole discretion of the commission, and nothing in this subchapter is intended to require approval of any financial assistance.     
     Source Note:        The provisions of this §6.32 adopted to be effective January 8, 1998, 23 TexReg 151; amended to be effective October 18, 1998, 23 TexReg 10501; amended to be effective September 19, 2002, 27 TexReg 8775; amended to be effective October 21, 2010, 35 TexReg 9361; amended to be effective June 21, 2012, 37 TexReg 4433; amended to be effective July 20, 2016, 41 TexReg 5245