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Oregon State Archives

Oregon Bulletin

January 1, 2011

Oregon Business Development Department
Chapter 123

Rule Caption: This is a revision of the procedural rules, updating statutes and some minor housekeeping changes.

Adm. Order No.: OBDD 40-2010

Filed with Sec. of State: 11-30-2010

Certified to be Effective: 12-1-10

Notice Publication Date: 11-1-2010

Rules Amended: 123-001-0700, 123-001-0725, 123-001-0750

Subject: The Contested Case section of the procedural rules is being updated to correct statute references and make minor housekeeping changes.

Rules Coordinator: Mindee Sublette—(503) 986-0036

123-001-0700

Purpose, Scope and Definitions

(1) OAR 123-001-0700 to 123-001-0750 establish procedural steps and options for handling appeals, in the manner of a contested case under ORS 183.310 to 183.550, when the Department denies:

(a) An application for either preliminary certification or annual certification to exempt the taxable income of a facility under ORS 316.778 or 317.391 (see OAR 123-635), other than when denial results from objection to preliminary certification by the city, county or port; or

(b) Any other application or request for which state law provides for appeal by contested case.

(2) Except as otherwise provided under state law or elsewhere in this chapter of administrative rules, this rule and contested case provisions do not pertain to any other proceeding, hearing, determination or decision by the Department, Director, Commission or any subsidiary body.

(3) OAR 123-001-0700 to 123-001-0750 are intended only to supplement mandatory elements of contested case proceedings under the Administrative Procedures Act for matters specific to the Department. Therefore, relevant parts of OAR 137-003 are hereby incorporated into and adopted as part of this division of administrative rules by reference.

(4) For purposes of OAR 123-001-0700 to 123-001-0750, unless the context demands otherwise:

(a) “Applicant” means the person (including but not limited to a business firm) that sought approval under section (1) of this rule, as identified in the application form or other submitted materials. This person is thus the affected party or appellant for purposes of the contested case, and the submitted address given in the form is assumed correct for mailing the Notice.

(b) “Notice” means the formal written statement on Department letterhead that the Department initially sends to the Applicant, in accordance with OAR 123-001-0725.

Stat. Auth.: ORS 183.341(2), 183.417(2), 183.464(2) & 285A.075

Stats. Implemented: ORS 183.413 - 183.470 & 285C.500 - 285C.506

Hist.: EDD 12-2004, f. & cert. ef. 7-27-04; EDD 1-2008, f. & cert. ef. 1-2-08; EDD 11-2008(Temp), f. & cert. ef. 3-28-08 thru 9-23-08; EDD 15-2008, f. & cert. ef. 6-4-08; OBDD 40-2010, f. 11-30-10, cert. ef. 12-1-10

123-001-0725

Steps and Reservations of the Department

(1) As described in OAR 123-001-0700, the Department shall send notice to the applicant, such that:

(a) The Department sends notice by registered or certified mail;

(b) If a copy is sent also by regular, first-class mail, it must be so mailed at least five days prior to the notice as described in subsection (a) of this section; and

(2) The notice, on Department letterhead, shall include but is not limited to the following:

(a) The date and other pertinent facts of the Department’s receipt of the application;

(b) Brief explanation of why the Department is unable to approve it;

(c) Reference to the specifically relevant statutory subsection(s) or administrative rule section(s), and further explanation, as warranted, regarding how these references support the Department’s conclusion(s);

(d) Statement of the applicant’s right to a contested case hearing on the matter before an administrative law judge and to be represented by legal counsel;

(e) Designation of the Department’s current file on the application as the record for purposes of proving a prima facie case upon default; and

(f) Instruction on how the applicant must file a written request in order to receive the hearing, such that the request is received by the Department on or before a specified date not less than 30 calendar days after the Notice.

(3) The Department reserves the option (at its sole discretion) to withdraw the proposed denial and grant certification to the applicant for any reason, prior to a final order, including but not limited to the re-submission of a new application or the consideration of evidence that alters the Department’s prior conclusion(s), as otherwise allowed under the applicable laws.

(4) Upon default by the applicant, including but not limited to failure to timely file a request for a hearing with the Department, the Department shall promptly issue a final order denying certification, furnishing a copy to the Department of Revenue/county assessor as relevant.

(5) If the applicant files a timely request for a contested case hearing, the case shall be referred to the Office of Administrative Hearings and a copy of the referral furnished to the applicant, General Counsel and the Department of Revenue/county assessor as relevant.

(6) The administrative law judge will issue a proposed order, pursuant to applicable proceedings of the contested case hearing, and except as set forth in subsection (7)(a) or (b) of this rule, that proposed order shall become final by order of the administrative law judge not less than 45 calendar days after the issuance of the proposed order.

(7) A proposed order in section (6) of this rule shall not become final if:

(a) The Department gives timely written notification to the parties and the administrative law judge of its intent to alter the findings or effect of the order, subsequent to which it shall issue an amended proposed order and/or final order, as warranted.

(b) Within 30 calendar days from issuance of the proposed order, a party files written exceptions with both the Department and the administrative law judge that concisely present the party’s entire argument against the proposed order, and the Department subsequently requests in writing that the administrative law judge undertake further steps. Such steps include, but are not limited to, an official response to the exceptions or the hearing of new or additional evidence.

Stat. Auth.: ORS 183.341(2), 183.417(2), 183.464(2) & 285A.075

Stats. Implemented: ORS 183.413 - 183.470 & 285C.500 - 285C.506

Hist.: EDD 12-2004, f. & cert. ef. 7-27-04; EDD 1-2008, f. & cert. ef. 1-2-08; EDD 11-2008(Temp), f. & cert. ef. 3-28-08 thru 9-23-08; EDD 15-2008, f. & cert. ef. 6-4-08; EDD 8-2009, f. & cert. ef. 10-1-09; OBDD 40-2010, f. 11-30-10, cert. ef. 12-1-10

123-001-0750

Representations by Agency Representative

For purposes of any contested case hearing before an administrative law judge:

(1) Subject to the approval of the office of Attorney General of the State of Oregon under ORS chapter 180, the Director may authorize an officer or employee of the Department to appear on behalf of the Department.

(2) Such a Department representative may not present legal argument on behalf of state government.

(3) The Department retains its full prerogative, with or without intervention by the administrative law judge, to consult with or otherwise involve the office of Attorney General. Such prerogative includes but not necessarily limited to the sole purpose of having the office of Attorney General present legal argument at the hearing or to file written legal argument within a reasonable time after conclusion of the hearing.

(4)(a) “Legal argument” includes arguments on:

(A) The jurisdiction to hear the contested case;

(B) The constitutionality of a statute or rule or the application of a constitutional requirement to the Department; and

(b) “Legal argument” does not include presentation of motions, evidence, examination and cross-examination of witnesses or the presentation of factual arguments or arguments on:

(A) The application of the statutes or rules to the facts in the contested case;

(B) Comparison of prior actions of the agency in handling similar situations;

(D) The admissibility of evidence; and

(E) The correctness of procedures followed in the contested case hearing.

Stat. Auth.: ORS 183.452(2)(b) & 285A.075

Stats. Implemented: ORS 183.411 & 183.452

Rule Caption: The changes in these rules revise language for the Special Public Works Fund.

Adm. Order No.: OBDD 41-2010

Filed with Sec. of State: 11-30-2010

Certified to be Effective: 12-1-10

Notice Publication Date: 11-1-2010

Rules Amended: 123-042-0010, 123-042-0020, 123-042-0026, 123-042-0036, 123-042-0038, 123-042-0045, 123-042-0055, 123-042-0065, 123-042-0076, 123-042-0122, 123-042-0132, 123-042-0155, 123-042-0165, 123-042-0175, 123-042-0180, 123-042-0190

Subject: These rules are being revised due to legislation from the 2009 Legislative Session through HB 2152. The name of the department has been changed to the Oregon Business Development Department. The infrastructure Finance Authority has been created to oversee the public finance program, including the Special Public Works Fund.

Rules Coordinator: Mindee Sublette—(503) 986-0036

123-042-0010

Purpose and Objectives

Pursuant to ORS 285B.419, the Oregon Business Development Department is required to adopt rules that implement the Special Public Works Fund Program. These rules are promulgated under authority granted by ORS 285B.419(1) and 285A.075.

Stat. Auth.: ORS 285B.419 & 285A.075

Stats. Implemented: ORS 285B.410 - 285B.482

Hist.: IRD 1-1986(Temp), f. & ef. 1-14-86; IRD 9-1986, f. 6-30-86, ef. 7-1-86; EDD 3-1987(Temp), f. 8-17-87, ef. 8-20-87; EDD 5-1988, f. & cert. ef. 2-17-88, Renumbered from 120-050-0010; EDD 26-1990, f. & cert. ef. 10-11-90; EDD 14-1991(Temp), f. & cert. ef. 10-17-91; EDD 9-1992, f. & cert. ef. 4-29-92; ED 12-2000, f. 8-9-00, cert. ef. 8-14-00; EDD 4-2002, f. & cert. ef. 2-26-02; EDD 5-2004(Temp), f. & cert. ef. 2-3-04 thru 8-1-04; Administrative correction 8-19-04; OBDD 41-2010, f. 11-30-10, cert. ef. 12-1-10

123-042-0020

Definitions

For the purposes of these rules additional definitions may be found in Procedural Rules, OAR 123-001. As used in this OAR 123 division 42 the following terms have the meanings set forth below, unless the context clearly indicates otherwise.

(1) “Authority” means the Infrastructure Finance Authority within the Oregon Business Development Department.

(2) “Award” means the authority’s determination that the project is eligible for funding and that the authority has identified the specified funding type and amount for the activities described in the staff recommendation.

(3) “Award date” means the date of the final authority management signature approving the award.

(4) “Board” means the Oregon Infrastructure Finance Authority Board.

(5) “Commission” means the Oregon Business Development Commission

(6) “Development project” means a project for the acquisition, improvement, construction, demolition, or redevelopment of municipally owned utilities, buildings, land, transportation facilities or other facilities that assist the economic and community development of the municipality, including but not limited to the following type of projects:

(a) Transportation projects

(b) Utility system projects

(c) Buildings, lands or other facility projects including planning project activities that are necessary or useful as determined by the authority.

(7) “Direct project management costs” means expenses directly related to a project that are incurred by a municipality solely to support or manage a project eligible for assistance under ORS 285B.410 to 285B.482. Direct project management costs does not include routine or ongoing expenses of the municipality.

(8) “Eligible commercial jobs project” means a project that creates or retains jobs that are created or retained by businesses selling goods or services in markets for which national or international competition exists.

(9) “Emergency project” means a development project resulting from an emergency as defined in ORS 401.025 to which federal disaster relief has been committed.

(10) “Essential Community Facilities” means municipally owned or operated facilities that provide or support services vital to public health and safety, including, but not limited to police and fire protection, medical treatment, public utilities, transportation, and auxiliary shelter facilities.

(11) “Executive Director” means the administrator of the Infrastructure Finance Authority.

(12) “Firm business commitment project” means a project in response to a specific business development, expansion or retention proposal where assistance is necessary to enable the proposal to proceed and where permanent, full-time equivalent jobs will be created or retained. The project shall support industrial development and eligible commercial jobs and be consistent with local comprehensive plans and implementing ordinances.

(13) “Fund” means the Special Public Works Fund created by ORS 285B.455.

(14) “Marine facility” has the meaning given that term in ORS 285B.410(7)

(15) “Municipality” means an Oregon city, or county, the Port of Portland created by ORS 778.010, a county service district organized under ORS Chapter 451, a district as defined in 198.010, a tribal council of a federally recognized Indian tribe in this state, or an airport district organized under ORS 838, but does not include an ORS 190 entity.

(16) “Planning project” means:

(a) A project related to a potential development project for preliminary, final or construction engineering;

(b) A survey, site investigation or environmental action related to a potential development project;

(d) An activity that the authority determines to be necessary or useful in planning for a potential development project.

(17) “Project” means a development, planning or emergency project

(18) “State revenue bond loan” means a loan funded in whole or part through the sale of state revenue bonds issued by the State of Oregon at the request of the department that are payable from specific revenue sources pledged by a municipality and are not a pledge of the full faith and credit of the State of Oregon.

(19) “Temporary project financing” means non permanent financing, including short term and bridge financing used to finance eligible acquisition, pre-construction and construction costs.

Stat. Auth.: ORS 285B.419 & 285A.075

Stats. Implemented: ORS 285B.410 - 285B.482

Hist.: ED 12-2000, f. 8-9-00, cert. ef. 8-14-00; EDD 7-2001(Temp), f. & cert. ef. 11-6-01 thru 3-29-02; EDD 4-2002, f. & cert. ef. 2-26-02; EDD 5-2004(Temp), f. & cert. ef. 2-3-04 thru 8-1-04; EDD 18-2004, f. & cert. ef. 8-2-04; EDD 10-2006, f. & cert. ef. 11-1-06; EDD 13-2008(Temp), f. & cert. ef. 4-9-08 thru 10-5-08; EDD 31-2008, f. 10-2-08, cert. ef. 10-3-08; OBDD 41-2010, f. 11-30-10, cert. ef. 12-1-10

123-042-0026

Loan and Grant Information

(1) The moneys in the fund shall be used primarily to provide loans to municipalities for projects. Grants may be given only when loans are not feasible due to the financial need of the municipality or special circumstances of a project. The level of loan or grant funding, if any, may be determined by the authority on a case-by case-basis. The authority shall determine awards in a manner that maximizes the use of available resources and maintains the desired credit standards of the fund according to the following criteria:

(a) Amount requested.

(b) Type.

(d) Terms and conditions of an award. The authority may offer an alternate mix or lower amount of assistance than requested, and it may investigate and recommend other sources of funds for all or part of a proposed project.

(2) Grants:

(a) If the authority determines that a firm business commitment project meets the minimum criteria for a grant, the authority may make a further determination on the amount of the grant. The maximum grant amount is $500,000 per project or 85% of allowable project costs, whichever is less. The amount of grant will be based primarily on the number of eligible commercial and industrial jobs proposed to be created or retained with a maximum of $5,000 for each job created or retained. The maximum grant amount will be awarded only in special circumstances as described in the authority’s adopted policy.

(b) If a grant is for the acquisition and improvement of real property, the maximum grant amount shall not exceed the fair market value of the real property after the improvements have been made or the value placed on the real property and improvements on the assessment rolls, whichever is less.

(c) The authority shall receive in accordance with OAR 123 division 70 a copy of the appropriate First Source Hiring Agreement or assurance from the municipality that one will be entered into before the grant is dispersed.

(d) Not less than 60 percent of the grants awarded from the Special Public Works Fund in any biennium shall be used to provide assistance to distressed or rural areas.

(e) The authority may not expend more than $900,000 for grants or direct assistance, if any, for planning projects to municipalities in a biennium.

(f) A development project that qualifies as an eligible commercial jobs project or a firm business commitment project may be eligible to receive a grant. When making a determination to award a grant, the authority will apply prudent fiscal management of the fund in order to manage constrained funding resources. In addition to the criteria and process contained in its policies on grant and loan funding, the authority shall apply the following minimum criteria for grants:

(A) The authority’s financial analysis determines that the municipality’s borrowing capacity is insufficient to support the amount of the loan requested for the project;

(B) Jobs will be created or retained as a result of the grant being awarded; and

(C) The authority has received confirmation that the firm business commitment or the eligible commercial jobs project will not occur, or that the jobs will be lost, if the municipality does not receive a grant.

(3) Loans:

(a) Maximum loan amount for a project will be based on the authority’s financial and credit analysis of the municipality’s capacity to repay, the availability of moneys in the fund, and prudent fund management. Projects that the authority determines are not financially feasible, or loans that cannot be adequately secured, will not be funded.

(b) When the authority makes a loan to finance temporary project financing, all of the following apply:

(A) The municipality must receive an award from the authority before project construction begins

(B) The award will consist of loan only, and will not exceed the cost of the project;

(C) The repayment terms of the loan can include deferred repayment of principal and/or interest for the term of the loan.

(A) The term is limited to the usable life of the contracted project, or 25 years from the year of project completion, whichever is less.

(B) The interest rate on a loan will be based on market conditions for similar debt, and will be set at the time of the award.

(C) The interest rate on a state revenue bond loan will be equal to the coupon rates on the bonds. Until the state revenue bonds are sold, the municipality will pay interest on the outstanding principal balance of the loan at the rate established by the authority.

(d) The maximum loan amount per project is $10,000,000, of which not more than $3,000,000 may be in the form of a direct loan. A direct loan is a loan that is not a state revenue bond loan.

(e) A loan amount requiring Board approval shall be established by the Board.

(f) The loan shall be a full faith and credit obligation, which is payable from any taxes that the municipality may levy within the limitations of Article XI, Sections 11 and 11b, of the Oregon Constitution and all legally available funds of the municipality. Additional pledges of revenue or other collateral may also be required and may include, but are not limited to:

(A) Specific revenues of the municipality may also be required to be pledged as security, including revenues of the project, special assessment revenues and other collateral.

(B) If repayment of a loan substantially depends on revenues the municipality will receive from a lessee or payments from a benefiting business, the authority will assess the financial capacity of the payor, the adequacy of the security, the financial instrument(s) requiring such payments to the municipality, and any liens, pledge(s), or assignments of collateral from the payor to the municipality. The authority may require an assignment of such revenue and collateral from the municipality.

(C) If repayment of the loan substantially depends on a pledge of tax increment revenues from an urban renewal agency to the borrowing municipality, the authority’s financial analysis will extend to the financial feasibility of the projected revenues and the financial and legal adequacy of the proposed pledge of tax increment revenue.

Stat. Auth.: ORS 285B.419 & 285A.075

Stats. Implemented: ORS 285B.410 - 285B.482

Hist.: EDD 10-2006, f. & cert. ef. 11-1-06; EDD 13-2008(Temp), f. & cert. ef. 4-9-08 thru 10-5-08; EDD 31-2008, f. 10-2-08, cert. ef. 10-3-08; OBDD 41-2010, f. 11-30-10, cert. ef. 12-1-10

123-042-0036

Project Priorities and Funding

(1) The authority may consider the following priorities when determining a development project’s eligibility, including but not limited to:

(a) Projects that help create or retain permanent jobs.

(b) Projects for which a municipality has documented a strong likelihood of creating construction jobs or otherwise promoting or contributing to economic and community development.

(d) Projects for which a municipality has documented how the benefits of the project will be preserved over the project life.

(2) The authority may apply the following procedure when determining whether to make an award for an eligible development project:

(a) The authority will review project concepts and/or project information contained in the project intake form.

(b) Proposed projects that the authority determines to be eligible, meet the Board approved prioritization criteria, are a high priority and address the goals of the program, will be advanced to the next step. A proposed project that is not advanced will be referred to other possible funding source(s) or referred back to the proposing municipality for further project development.

Stat. Auth.: ORS 285B.419 & 285A.075

Stats. Implemented: ORS 285B.410 - 285B.482

Hist.: EDD 10-2006, f. & cert. ef. 11-1-06; EDD 13-2008(Temp), f. & cert. ef. 4-9-08 thru 10-5-08; EDD 31-2008, f. 10-2-08, cert. ef. 10-3-08; OBDD 41-2010, f. 11-30-10, cert. ef. 12-1-10

123-042-0038

Criteria for Special Project Funding

Special types of development projects must meet the following criteria. If the project consists:

(1) Solely of the acquisition of land by the municipality, the land must be identified in the applicable land use or capital plan as necessary for a potential development project or be zoned solely for commercial or industrial use. A loan for such a project must be repaid if the land that is acquired through the proceeds of the loan is rezoned so as to be no longer zoned for industrial or commercial use.

(2) Of a privately owned railroad, the railroad must be designated by the owner and operator as subject to abandonment within three years, pursuant to federal law governing abandonment of common carrier railroad lines.

(3) Of a telecommunications system, the governing body of the municipality shall adopt a resolution, after a public hearing, finding that the proposed telecommunications system project is necessary and would not otherwise be provided by a for-profit entity within a reasonable time and for a reasonable cost.

(4) Of an energy system, the municipality and the serving utility must execute an ownership and operating agreement for the proposed energy system project. This sub-section does not apply when the energy system project will be located within the recognized service territory of the municipality.

(5) Of a marine facility project authorized under ORS 777.267, assistance from the fund shall only be a loan that may not exceed the amount of the required local match.

(6) Of a project for a utility system that is functionally connected to, or anticipates connecting to, another municipality’s utility system, an intergovernmental cooperation agreement that describes the duties and obligations of each entity in regard to the project and utility system is required. A certified copy of the fully executed intergovernmental agreement must be provided before the authority will disburse funds.

Stat. Auth.: ORS 285A.075

Stats. Implemented: ORS 285A.075 & 285B.410 - 285B.460

Hist.: EDD 31-2008, f. 10-2-08, cert. ef. 10-3-08; OBDD 41-2010, f. 11-30-10, cert. ef. 12-1-10

123-042-0045

Planning Project Eligibility, Criteria and Funding

(1) A planning project, as defined in ORS 285B.410(9), may be eligible for a loan. The authority will make awards for loans based on availability of moneys in the fund and prudent fund management as well as its financial analysis of the municipality’s ability to repay the loan;

(2) Planning projects listed in OAR 123-042-0045(3) and (4) may also be eligible for grant funding.

(3) A planning project conducted for the purpose of developing industrial lands, including planning for industrial site certification, is eligible for a grant of up to $60,000 per site, per year or 85% of the allowable planning project cost, whichever is less. This type of planning project must meet the following criteria:

(a) The land must be zoned ‘industrial”; and

(b) The land meets marketability standards as determined by the department using its adopted policy.

(4) A planning project conducted for the purpose of a renewable energy feasibility study is eligible for a grant of up to $50,000 or 75% of allowable project cost, whichever is less. A renewable energy feasibility study award may also be in the form of a loan. The authority may conduct a competitive application process for renewable energy feasibility study grant awards. Information about the application process, the scoring criteria and process and the program requirements in general is contained in the program guideline. A new program guideline will be developed and provided for each competitive solicitation.

Stat. Auth.: ORS 285B.419 & 285A.075

Stats. Implemented: ORS 285B.410 - 285B.482

Hist.: EDD 10-2006, f. & cert. ef. 11-1-06; OBDD 41-2010, f. 11-30-10, cert. ef. 12-1-10

123-042-0055

Emergency Project Eligibility, Criteria and Funding

(1) An emergency project, as defined in ORS 285B.410(5), that meets the following criteria is eligible for assistance from the fund:

(a) The project must result from an emergency as defined in ORS 401.025; and

(b) The project must have federal disaster relief assistance funds committed;

(2) The following apply to both grants and loans for emergency projects:

(a) The maximum award amount for an emergency project shall not exceed the required local match for the federal disaster relief assistance committed to the project;

(b) A grant award for an emergency project shall not exceed $500,000 per project, or the amount of the federally required local match, whichever is less; and

(3) The authority shall not expend more than $2.5 million for emergency project grants, including grants for essential community facilities, in a biennium.

(4) For the purposes of awards made under this OAR 123-042-0055, allowable project costs shall be those eligible for federal assistance, unless those costs are precluded by a restriction in state law or the Code of Federal Regulations.

(5) In the event of an emergency, the authority may adopt a policy, after consultation with stakeholders and others, to guide implementation decisions regarding such matters as grant amounts and priorities.

Stat. Auth.: ORS 285B.419 & 285A.075

Stats. Implemented: ORS 285B.410 - 285B.482

Hist.: EDD 10-2006, f. & cert. ef. 11-1-06; OBDD 41-2010, f. 11-30-10, cert. ef. 12-1-10

123-042-0065

Allowable Project Costs

For purposes of projects funded under this division of rules, the allowable costs of a project include:

(1) Financing costs, including capitalized interest;

(2) Direct project management costs;

(3) Costs of consultant services and expenses;

(4) Construction costs and expenses;

(5) Costs of property acquisition, including any easement, or right of way directly related to and necessary for the project;

(6) Costs incurred by the municipality prior to the award if such costs are allowable under the authority’s adopted policy for reimbursement of pre-award costs;

(7) Costs of acquiring off-site property for purposes directly related to the project, such as wetland mitigation; and

(8) Other costs that the authority determines to be necessary or useful.

Stat. Auth.: ORS 285B.419 & 285A.075

Stats. Implemented: ORS 285B.410 - 285B.482

Hist.: EDD 10-2006, f. & cert. ef. 11-1-06; OBDD 41-2010, f. 11-30-10, cert. ef. 12-1-10

123-042-0076

Ineligible Projects and Project Costs

Expenses and costs expressly allowed under this division of rules, are eligible for reimbursement from the fund. All other costs are ineligible for reimbursement including but not limited to:

(1) Assistance to facilities that are or will be privately owned;

(2) Purchase of general purpose motor vehicles and other equipment not directly related to the project;

(3) Assistance to projects that primarily focus on relocating business or economic activity from one part of the state to another, except in cases where the business or economic activity would otherwise locate outside of Oregon; and

(4) Project operating or maintenance costs, except as allowed by statute.

Stat. Auth.: ORS 285B.419 & 285A.075

Stats. Implemented: ORS 285B.410 - 285B.482

Hist.: EDD 10-2006, f. & cert. ef. 11-1-06; OBDD 41-2010, f. 11-30-10, cert. ef. 12-1-10

123-042-0122

Application Requirements

(1) A municipality may submit an application to the authority after consulting with the authority on a preliminary determination of eligibility and following the authority’s procedures.

(2) The application shall be in the form provided by the authority and shall contain or be accompanied by such information and documentation as the department authority may require. The authority may, to the extent possible, assist municipalities in understanding program requirements and in completing applications. The authority will process only completed applications.

Stat. Auth.: ORS 285B.419 & 285A.075

Stats. Implemented: ORS 285B.410 - 285B.482

Hist.: EDD 10-2006, f. & cert. ef. 11-1-06; OBDD 41-2010, f. 11-30-10, cert. ef. 12-1-10

123-042-0132

Application Review and Approval

(1) For a construction project the authority must make the following determinations:

(a) The municipality has certified that the proposed project is feasible, is the most cost effective solution, and adequately serves the applicable land uses in both the short and long term;

(b) The loan is secured by the pledge of utility revenues or other revenues, collateral, or payments from any owners of specially benefited properties, and such pledge is sufficient, when considered with other collateral or assets, to assure repayment, and the municipality has certified to the authority that there will be adequate funds available to repay the loans made to the municipality from the fund;

(d) The project is consistent with the requirements governing assistance from the fund. If the authority determines that the municipality or the proposed project does not meet the requirements of OAR chapter 123, division 42, the authority may reject an application or require further documentation from the municipality;

(e) Other funds that may be needed to complete the project are available or the municipality has a binding commitment for such funds. If a portion of the other funds needed to complete the project is not available or committed at the time an award is made, the award shall be conditional on securing the other needed funds or a binding commitment for such funds; and

(f) The project is ready to begin and the municipality has committed in writing that, if awarded the assistance, it shall proceed immediately.

(2) For a planning project, the authority must make the following determinations:

(a) The requirements set out in OAR 123-042-0132(1) are met, except for subsection (b) if no loan is being awarded;

(b) The planning activities must be for a project that is eligible under OAR chapter 123, division 42 and meets the criteria listed in OAR 123-042-0045; and

(c) The municipality has demonstrated the ability to secure, the administrative capacity to undertake and complete the planning project.

Stat. Auth.: ORS 285B.419 & 285A.075

Stats. Implemented: ORS 285B.410 - 285B.482

Hist.: EDD 10-2006, f. & cert. ef. 11-1-06; OBDD 41-2010, f. 11-30-10, cert. ef. 12-1-10

123-042-0155

Contracts and Disbursements of Funds

(1) The authority shall disburse monies from the fund only after entering into a binding contract with the municipality.

(2) The contract shall be in form and substance as provided by the authority, and shall include:

(a) A provision that disbursements from the fund will be according to the terms of the contract;

(b) A provision that the liability of the authority under the contract is contingent upon the availability of moneys in the fund for use in the project;

(c) For a development project, a provision requiring that the contracted project remain in municipal ownership for the life of the loan. If this condition is not met, any grant shall convert to a loan, and at the authority’s determination, may become immediately due and payable in full;

(d) For a planning project, other than renewable energy feasibility study, a provision requiring that the land involved in the project must remain zoned as industrial and not be converted to another use for at least 5 years after completion of the project. If this condition is not met, any grant shall convert to a loan, and at the authority’s determination, may become immediately due and payable in full;

(e) If any portion of the assistance is in the form of a loan or the purchase of a bond of a municipality, a provision granting the authority a lien on, or a security interest in, the collateral as determined by the authority to be necessary to secure repayment of the loan or bond;

(f) A provision that for a period of up to six (6) years after project completion, the authority may request that the municipality, at its own expense, submit data on the economic development benefits of the project, including but not limited to, information on new or retained jobs resulting from the project, and other information necessary to evaluate the success and economic impact of the project; and

(g) Other provisions that the authority considers necessary or appropriate to implement the assistance.

(3) Other funds that may be needed to complete the project must be available or the municipality must have a binding commitment for such funds at the time the contract is executed. If a portion of the other funds needed to complete the project is committed but not available at the time an award is made or the contract executed, the contract shall require that the project be fully funded prior to any disbursement from the fund.

(4) The contract for a loan or grant shall be authorized by an ordinance, order or resolution adopted by the governing body of the municipality in accordance with the municipality’s requirements for public notice and authorizing debt.

Stat. Auth.: ORS 285B.419 & 285A.075

Stats. Implemented: ORS 285B.410 - 285B.482

Hist.: EDD 10-2006, f. & cert. ef. 11-1-06; OBDD 41-2010, f. 11-30-10, cert. ef. 12-1-10

123-042-0165

Municipality Responsibilities

(1) The municipality must comply with all applicable state laws, regulations and requirements, such as Oregon prevailing wage rates, municipal audit law, and procurement regulations.

(2) The municipality shall maintain accounts and records for all activities associated with the contracted project and shall provide the authority, and its representatives, reasonable access to such records. The municipality shall submit periodic reports on the project as requested by the authority.

(3) The municipality shall certify that any service provider retained for their professional expertise is certified, licensed, or registered, as appropriate, in the State of Oregon for their specialty.

(4) The municipality shall certify that it shall follow standard construction practices, such as bonding of engineers and contractors, requiring errors and omissions insurance, performing testing and inspections during construction, and obtaining as-built drawings.

(5) For a project funded with state lottery proceeds, the municipality shall comply with ORS 280.518 requiring public display of information on lottery funding of the project. At a minimum the municipality shall:

(a) Include the following statement, prominently placed on all plans, reports, bid documents and advertisements relating to the project: “This project was funded in part with a financial award from the Special Public Works Fund, funded by the Oregon State Lottery and administered by the State of Oregon, Development Department.”; and

(b) For a construction project, post a sign, provided by the departmentauthority, at the project site or, if more than one site is included in the project, at a site visible to the general public stating that the project is being funded by lottery proceeds.

(6) For a construction project, the municipality shall have a plan for ongoing operation, Maintenance and replacement that will preserve the project benefits over its useful life.

Stat. Auth.: ORS 285B.419 & 285A.075

Stats. Implemented: ORS 285B.410 - 285B.482 & 280.518

Hist.: EDD 10-2006, f. & cert. ef. 11-1-06; OBDD 41-2010, f. 11-30-10, cert. ef. 12-1-10

123-042-0175

Eligibility Criteria for State Revenue Bond Loans

The authority shall apply the following standards for determining the eligibility of development projects for revenue bond financing:

(1) Loan repayment must be secured by a full faith and credit pledge of the municipality;

(2) The loan must be of sufficient size as determined by the authority;

(3) The loan must be fully amortized over its term with fixed annual principal and interest payments and the term of the loan shall not exceed the usable life of the contracted project;

(4) The loan must conform to the requirements of the bond indenture for the state revenue bonds; and

(5) The loan and the municipality must meet the minimum underwriting criteria for revenue bond financing as established by authority policies.

Stat. Auth.: ORS 285B.419 & 285A.075

Stats. Implemented: ORS 285B.410 - 285B.482

Hist.: EDD 10-2006, f. & cert. ef. 11-1-06; OBDD 41-2010, f. 11-30-10, cert. ef. 12-1-10

123-042-0180

Remedies

The authority may invoke remedies for an “event of default” as described in the contract with the municipality, including the withholding of amounts otherwise due to the municipality pursuant to ORS 285B.449.

Stat. Auth.: ORS 285B.419 & 285A.075

Stats. Implemented: ORS 285B.410 - 285B.482

Hist.: ED 12-2000, f. 8-9-00, cert. ef. 8-14-00; EDD 5-2004(Temp), f. & cert. ef. 2-3-04 thru 8-1-04; EDD 18-2004, f. & cert. ef. 8-2-04; EDD 10-2006, f. & cert. ef. 11-1-06; OBDD 41-2010, f. 11-30-10, cert. ef. 12-1-10

123-042-0190

Appeals and Exceptions

(1) Appeals of decisions made by a municipality regarding a project must be made in accordance with the requirements and procedures of the municipality.

(2) The executive director of the authority will consider appeals of the authority’s funding decisions. Only the municipality may appeal. An appeal must be submitted in writing to the executive director within 30 days of the event or action that is being appealed. A project that would have been funded but for a technical error in the authority’s review of the application will be funded as soon as sufficient moneys become available in the fund, provided the project is still viable. The executive director’s decision is final.

(3) The executive ddirector may waive non-statutory requirements of this program if it is demonstrated such a waiver would serve to further the goals and objectives of the program.

Stat. Auth.: ORS 285B.419 & 285A.075

Stats. Implemented: ORS 285B.410 - 285B.482 & 285A.101

Rule Caption: These rules revise the Water/Watershed Financing Program’s ineligible project costs.

Adm. Order No.: OBDD 42-2010

Filed with Sec. of State: 11-30-2010

Certified to be Effective: 12-1-10

Notice Publication Date: 11-1-2010

Rules Amended: 123-043-0025

Subject: These rules revise the ineligible project costs for the Water/Watershed Financing Program.

Rules Coordinator: Mindee Sublette—(503) 986-0036

123-043-0025

Ineligible Project Costs

Expenses and costs expressly allowed by OAR 123-043-0015 are eligible for reimbursement from the fund. All other costs, including but not limited to those listed below, are ineligible for reimbursement:

(1) Costs incurred for facilities that are or will be privately owned.

(2) Purchase of general purpose motor vehicles and other equipment not directly related to the project.

(3) Purchase of off-site property for uses not directly related to the project.

(4) Project operating or maintenance expenses.

Stat. Auth.: ORS 285B.563 & 285A.075

Stats. Implemented: ORS 285B.560 - 285B.599

Hist.: EDD 7-2002, f. & cert. ef. 4-26-02; EDD 11-2006, f. & cert. ef. 11-3-06; EDD 25-2009, f. 11-30-09, cert. ef. 12-1-09; OBDD 2-2010(Temp), f. & cert. ef. 1-14-10 thru 7-13-10; Administrative correction 7-27-10; OBDD 42-2010, f. 11-30-10, cert. ef. 12-1-10

Notes
1.) This online version of the OREGON BULLETIN is provided for convenience of reference and enhanced access. The official, record copy of this publication is contained in the original Administrative Orders and Rulemaking Notices filed with the Secretary of State, Archives Division. Discrepancies, if any, are satisfied in favor of the original versions. Use the OAR Revision Cumulative Index found in the Oregon Bulletin to access a numerical list of rulemaking actions after November 15, 2010.