(b) No loan authorized by this section shall have an interest rate greater than two and one-half percent. The minimum amount of any loan shall be five thousand dollars. The period of any loan shall not exceed the period of one year. The chairperson of the council on the arts may make loans under this section subject to such other terms and conditions the council board deems proper.

(c) The council board shall have the power to make such rules and regulations as may be necessary and proper to effectuate the purposes of this section.

(d) The council board shall annually report by March fifteenth to the governor and the legislature describing the activities and operation of the loan program authorized by this section. Such report shall set forth the number of loan applications received and approved; the names of the arts institutions receiving loans together with the amount and purpose of the loan, and the outstanding balance; and the balance remaining in the arts institutions revolving loan fund. 5. (a) Application for loans may be made by an arts institution, including but not limited to museums, orchestras, dance companies and theatre groups.

(b) Every application shall be in the form acceptable to the chairman of the council on the arts. Every application shall accurately reflect the conditions which give rise to the proposed expenditure and accurately reflect the ability of the applicant to make such an expenditure without the proceeds of a loan under this section.

(c)(i) The council board shall give preference to those applications which demonstrate the greatest need and benefit to the arts community and public at large.

(ii) In making determinations on loan applications, the council board shall assure that loan fund moneys are equitably distributed among all sectors of the arts community and all geographical areas of the state.

(d) An application shall be referred by the chairperson of the council on the arts to the council board as defined by article three of the arts and cultural affairs law.

(e) An application shall not be approved:

(i) if the applicant is in arrears on any prior loan under this section,

(ii) if it shall be shown that at any time in the prior ten years, the applicant used state funds to repay all or part of any loan made under this section.

(f) The council board shall, to the maximum extent feasible, and consistent with the other provisions of this section, seek to provide that loans authorized by this section reflect an appropriate geographic distribution and are distributed equitably.