(1) Successful public or private grantees shall enter into an agreement with the department. The agreement will contain clear specifications for the work to be completed; and a budget, consistent with the grant application, outlining the total funds to be spent, including those that will be provided as matching funds.

(a) The grantee shall document all project costs to be paid or reimbursed, and those to be credited as matching contributions.

(b) Grant funds that are not spent for the approved project must be returned to the renewable resource state special revenue account for use as directed by appropriation.

(2) For successful public loans, the borrower shall enter into a bond purchase agreement with the department prior to project construction. The agreement will:

(a) require the borrower to adopt a bond resolution which contains the specific requirements and covenants with respect to the project financed from the loan proceeds; and

(b) stipulate conditions for purchase by the department of the applicant's bond or bond anticipation note, with the amount specified; terms of repayment and interest rates and fees to be paid by the borrower; clear specifications for the work to be completed; insurance requirements and inspection requirements; and conditions for the disbursal of funds.

(3) For successful private loans, the borrower shall furnish title insurance showing ownership of land, mortgages, encumbrances, or other lien defects and shall enter into a loan agreement with the department prior to project construction or equipment purchase.

(a) The agreement will specify the loan administration fee; contain clear specifications for the work to be completed; stipulate a budget to be consistent with the application; specify provisions for the disbursement and repayment, including principal and interest, of loan funds; describe the collateral provided to secure the loan; and prescribe remedies for borrower delinquency or default in repayment.