(a) The commissioner of transportation shall review a proposed project and shall determine if it is an eligible project and, if so, whether or not to recommend the project to the authority. Preference may be given to eligible projects that have financial support in addition to any loan that may be received from the fund.

(b) Upon recommendation by the department of transportation of a qualified project, the authority has the power and is authorized to make loans to a qualified borrower; provided, that the fund has sufficient money to make the loan to pay for all or part of the eligible costs of a qualified project. The term of the loan shall not exceed the useful life of the project, as determined by the authority in consultation with the department of transportation. The authority shall require the qualified borrower to enter into a financing agreement in connection with its loan. The authority, in consultation with the department of transportation, shall determine the form and content of loan applications and financing agreements, including the term and rate or rates of interest on a financing agreement and security required. The authority shall determine the interest rate for a loan under this part in a manner consistent with interest rates established for loans under title 68, chapter 221, part 10. The terms and conditions of a loan made with federal funds shall comply with applicable federal requirements.

(c) Loans shall be made only to qualified borrowers that:

(1) In the opinion of the authority demonstrate financial capability to assure sufficient revenues to operate and maintain the eligible project for its useful life and to repay the loan;

(2) Pledge the security as required by the authority for repayment of the loan;

(3) Provide assurances that are reasonably requested by the authority and the department of transportation; and

(4) Agree to maintain financial records in accordance with governmental accounting standards and to conduct an annual audit of the project's financial records in accordance with generally accepted governmental auditing standards and with minimum standards prescribed by the comptroller of the treasury, and to file the audit with the comptroller. In the event of the failure or refusal of a qualified borrower to have the audit prepared, the comptroller may appoint an accountant or direct the department of audit to prepare the audit at the expense of the borrower.

(d) The department of transportation shall review and approve, and submit to the authority for reimbursement, such eligible costs as may be incurred by a qualified borrower for a qualified project. For this purpose, the department of transportation shall have authority to inspect the work, examine project records and employ consultants as it deems appropriate to assist in carrying out such functions. To cover the costs of performing such functions, the department of transportation may charge the costs to the qualified project as an eligible cost and receive reimbursement for the costs from the authority.

(e) The authority may assess a loan fee to cover the costs of administration of the program. The fee may be apportioned between the authority and the department of transportation.