§ 262. New York state agricultural wastewater energy conservation loan program. 1. Definitions. As used in this section, unless a different meaning clearly appears from the context, the term:

a. "Financing institution" shall mean and include all banks, trust companies, savings banks, savings and loan associations and credit unions, whether incorporated, chartered, organized or licensed under the laws of this state, any other state of the United States or the federal government. This term may also include public authorities, public benefit corporations, units of local government, domestic insurance companies and not-for-profit corporations, which make loans for improvements for the benefit of eligible applicants.

b. "Eligible applicant" or "applicant" shall mean: a business involved in food processing which employs less than five hundred workers or has gross annual sales of less than ten million dollars and which owns the building to be improved with the proceeds of a program loan or which has a lease or management agreement for the building.

c. "Food processors" shall mean businesses engaged in the processing of vegetables, fruits, meats, dairy products or other food products.

d. "Loan" or "program loan" shall mean a loan from the department or a cooperating financing institution pursuant to an agreement with the department as part of the New York state agricultural wastewater energy conservation loan program.

e. "Program" shall mean the New York state agricultural wastewater energy conservation loan program.

f. "Region" shall mean one or more of the economic development regions created pursuant to section 5-127 of the energy law.

g. "Wastewater treatment project" shall mean the acquisition, construction, alteration, repair or improvement of a building, fixtures, machinery or equipment constituting a facility which provides treatment of wastewater to improve its quality and which reduces energy consumption provided that: (i) the cost of such improvement will be returned in savings in energy costs within a period of not less than one year nor more than ten years as identified in an energy audit; (ii) work on such improvement commenced after submittal of an application under the program; and (iii) such construction, alteration, repair or improvement is permissible under federal requirements and court decisions applicable to overcharge funds appropriated to this program.

2. Agricultural wastewater treatment energy conservation loans. The department is hereby authorized to utilize monies appropriated to this program for the purpose of providing loans, principal reductions, loan guarantees and interest subsidies for wastewater treatment for businesses engaged in food processing.

3. a. Interest subsidies. The department may enter into cooperative agreements with one or more cooperating financial institutions within the state to offer loans for the purposes of this section by eligible applicants at a rate that is no more than seventy-five percent of the prime interest rate. Such interest rate shall initially be five percent.

b. Principal reductions and loan guarantees. The department shall be authorized to utilize monies appropriated to this program for the purpose of providing principal reductions and loan guarantees for eligible applicants, if such uses are permissible under the conditions applicable to the appropriated overcharge funds. Such principal reduction shall be limited to not more than fifty percent of the amount eligible for a loan through the program as is provided in this section.

4. Loan agreements and agreements in connection with loans. Loan agreements and agreements in connection with loans made pursuant to this section shall provide that: (a) the maximum loan per applicant shall be two hundred fifty thousand dollars; (b) loans or agreements in connection with loans shall be made only after an application has been made to the department, the department has approved the technical merits of the proposed improvement and the department has notified the cooperating financial institutions of its approval and the amount of interest or principal reduction or of the approval of a loan guarantee upon the loan to be funded pursuant to such agreement; and (c) loan agreements with program applicants shall provide for a post installation inspection, as deemed necessary by the department.

5. Technical feasibility study. The department shall require the applicant to submit a technical feasibility study. All technical feasibility studies must include the cost of implementation, a construction schedule and expected energy savings.

6. Apportionment of monies. The commissioner shall apportion the monies appropriated for this program for the purpose of providing loans, interest subsidies, loan guarantees and principal reductions to applicants within each of the regions of the state identified in paragraph f of subdivision one of this section.

7. Reapportionment of funds. The department may reapportion the funds available for loans, interest subsidies, loan guarantees or principal reductions for applicants within any region for use in one or more of the other regions upon finding that participation in the program within the former region would not be adversely affected, and that there exists in the latter region or regions inadequate funds to satisfy the demand for program participation. In any fiscal year of the state the amount of funds available to applicants within any region may be reduced by not more than twenty-five percent of the total amount apportioned for such region. A copy of the department's finding shall be given to the chairman of the senate finance committee and the chairman of the assembly ways and means committee.

8. Implementation. In implementing the program, the department shall promulgate rules and regulations formulated after consultation with the department of environmental conservation, the energy office and the superintendent of financial services. Such rules and regulations may include, but not be limited to, requirements for applications and supporting materials and criteria for the selection of cooperating financial institutions.