Section 99-3-104 - General conditions for Level III construction projects; rehabilitation(a) Except as otherwise specifically provided, each Level III rehabilitation construction project identified in this chapter shall be subject to the following general conditions: (i) Each sponsor shall offer security for the project loan as deemed adequate and acceptable to the attorney general; (ii) The commission shall establish repayment schedules for project loans in accordance with the conditions prescribed in this section; (iii) Each sponsor shall establish a sinking fund for repair and maintenance of the project as deemed appropriate by the commission; (iv) Each sponsor shall supervise design and construction of the project and submit all requests for payment to the commission for approval; (v) Sponsors shall not make construction funding commitments until after the commission has reviewed and approved construction budgets and construction plans; (vi) The commission shall make payments directly to the sponsor; (vii) The sponsor shall be responsible for operation and maintenance of the project; (viii) The sponsor is responsible for all project expenditures in excess of the total project appropriation; (ix) If the commission determines that any sponsor has, without good cause, abandoned completion of the project, that sponsor, in addition to being required to repay the loan, shall be obligated to immediately repay the full amount of all grant funds actually expended plus interest as established by the state auditor in an amount equal to the interest that would have accrued on the expended grant funds in the water development account from the date of expenditure; (x) Principal and interest payments made in repayment of loans shall be deposited in water development account II.