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Oregon Bulletin

July 1, 2012

Department of Energy, Chapter 330

Rule Caption: Permanent rules to administer the transit services tax credit within the Energy Incentives Program.

Adm. Order No.: DOE 5-2012

Filed with Sec. of State: 6-11-2012

Certified to be Effective: 6-11-12

Notice Publication Date: 5-1-2012

Rules Adopted: 330-225-0000, 330-225-0010, 330-225-0020, 330-225-0030, 330-225-0040, 330-225-0050, 330-225-0070, 330-225-0080, 330-225-0090, 330-225-0100, 330-225-0150

Subject: These rules provide the operating framework for the transit services tax credit within the Energy Incentives Program created by HB 3672 (2011) and amended by HB 4079 (2012). The rules include the application process, allocation of tax credits within funding limits and issuance of tax credits. The department engaged an advisory committee to provide comments and feedback on the proposed rules.

Rules Coordinator: Kathy Stuttaford—(503) 373-2127

330-225-0000

Applicability of Rules

These rules implement the incentive program for transit services established in House Bill 3672 (2011) and amended by House Bill 4079 (2012). The rules also provide procedures for submission, agency review and selection of transit services for preliminary and final certification of tax credits.

These rules apply to all applications for tax credits for transit services projects, as governed by ORS 469B.320 to 469B347.

Stat. Auth.: ORS 469.040 & 469B.347
Stats. Implemented: ORS 469B.320–469B.347, 315.336 & OL 2012 Ch. 45
Hist.: DOE 5-2012, f. & cert. ef. 6-11-12

330-225-0010

Definitions

For the purposes of this division, the following definitions apply:

(1) “Allocated project cost” means the amount of the transit services project’s cost that may be eligible for tax credits. The department calculates by dividing the amount of the potential tax credit available to each applicant, determined by the process in OAR 330-225-0050(6), by the tax credit rate in effect for that Opportunity Announcement.

(2) “Applicant” means a person who has applied for or who has received a preliminary certificate for a transit services energy incentives program tax credit.

(3) “Certified cost” means the cost certified in the final certification.

(4) “Cost” has the meaning given in ORS 469B.320.

(5) “Department” means the Oregon Department of Energy.

(6) “Director” means the director of the department.

(7) “Opportunity period” means the timeframe specified in an Opportunity Announcement for the department to accept applications for transit services.

(8) “Substantial Energy Savings” means a reduction of at least 10 percent in the energy used by the transit service compared to the equivalent energy use of single occupant vehicles traveling the same number of passenger miles.

(9) “Transit Services Provider” means a public or nonprofit entity that provides transit services to the public and that receives state or federal funding for those services, or is the direct recipient of funding from an entity that receives state or federal funding for the services.

(10) “Transit Services” means transportation by a conveyance that provides regular and continuing transportation to the public, but does not include school bus, charter or intercity passenger rail transportation.

(11) “Vehicle Miles Reduced” (VMR) means the difference in miles driven by the transit services compared to miles driven by single occupant vehicles.

Stat. Auth.: ORS 469.040 & 469B.347
Stats. Implemented: ORS 469B.320–469B.347, 315.336 & OL 2012 Ch. 45
Hist.: DOE 5-2012, f. & cert. ef. 6-11-12

330-225-0020

Opportunity Announcement

(1) The department will announce the availability of tax credits for transit services by issuing an Opportunity Announcement.

(2) The department will continually monitor the allocation of tax credits to ensure that the total amount of potential tax credits does not exceed the tax credit caps specified in ORS 469B.344.

(3) If the cumulative total of all tax credits awarded under the Opportunity Announcement is less than the total amount of tax credits available, the department may reallocate the balance to a future Opportunity Announcement.

(4) The Opportunity Announcement will include the following information:

(a) Objectives for the opportunity period;

(b) The amount and the percent level of tax credits available;

(c) Application requirements including the time period during which transit services are eligible;

(d) Dates of the application opportunity period;

(e) Instructions and directions to the required application forms and materials;

(f) Minimum technical standards;

(g) The process the department will use to allocate tax credits; and

(h) Other information the department considers necessary.

Stat. Auth.: ORS 469.040 & 469B.347
Stats. Implemented: ORS 469B.320–469B.347, 315.336 & OL 2012 Ch. 45
Hist.: DOE 5-2012, f. & cert. ef. 6-11-12

330-225-0030

Preliminary Certification Application

(1) Any person may apply for preliminary certification by submitting a complete preliminary certification application. The application must meet requirements provided by statutes, these rules and the current Opportunity Announcement.

(a) The application must be in the form specified in the Opportunity Announcement and these rules.

(b) An applicant must submit a complete application during the opportunity period. For the purposes of this rule, the department considers an application ôsubmittedö when the department receives the application accompanied by the fee specified in these rules. The department will not process applications received outside of an opportunity period.

(c) Only one application will be accepted from each transit services provider for each Opportunity Announcement.

(2) The application must be accompanied by the fee specified in these rules. The department will not process applications received without fee payment.

(3) The department will not accept amendments to applications during the opportunity period. An applicant may withdraw an application and submit a replacement application during the opportunity period. The department will not process fees for applications withdrawn before the end of the opportunity period.

(4) The application must include the following information, unless the department specifies otherwise in the Opportunity Announcement.

(a) The name of the applicant.

(A) If the applicant is a nonprofit entity, the application must include evidence of its nonprofit status.

(B) If the applicant is a public or governmental entity, the application must include written authorization from the entity’s governing body allowing submission of the application. An employee of the applicant may sign the application and attest they have the authority through their employment to apply for and receive transit services tax credits.

(b) The name, address, email address and telephone number of the responsible party for the applicant.

(c) The applicant’s federal tax identification number, which may be shared with the Oregon Department of Revenue to facilitate the administration of state tax law.

(d) A statement verifying that the applicant is the recipient or sub-recipient of state or federal funds, either confirmed or anticipated to be received for the services and period identified in the Opportunity Announcement.

(e) An identification of the types of State or Federal funds received or anticipated for the transit services included in the application, which may be an executive summary of the agreement or line item budget under which the applicant qualifies as a recipient or sub-recipient.

(f) The geographic area or region for which transit services will be provided.

(g) A calculation estimating the vehicle miles reduced (VMR).

(h) The period during which transit services will be provided.

(i) A statement of compliance with applicable state and local regulations and that the applicant will obtain required licenses and permits, including any legally required audits associated with the service.

(j) The number and type of new jobs that will be created by the transit services and the number of existing jobs that will be sustained throughout the operation of the transit services. Job estimates should be submitted in hours. These hours must be directly related to the transit services.

(k) The anticipated costs of providing the transit services.

(l) The amount of any anticipated or received incentives or grants directly related to the transit services.

(m) Current line item budget including labor, operations, maintenance, fuel, administrative costs and revenue that corresponds to the funding for the transit provider’s service.

(n) The dollar amount of tax credit requested by the applicant.

(o) If the applicant intends to include costs for performance of the transit services prior to the project period in the Opportunity Announcement, a written description of the special circumstances that rendered filing of an application prior to the start of performance unreasonable. Pre-qualified waivers may be provided in the Opportunity Announcement; a written description is not required for the period covered by a pre-qualified waiver.

(p) Other information the department considers necessary.

Stat. Auth.: ORS 469.040 & 469B.347
Stats. Implemented: ORS 469B.320–469B.347, 315.336 & OL 2012 Ch. 45
Hist.: DOE 5-2012, f. & cert. ef. 6-11-12

330-225-0040

Fees

The department adopts the following schedule of fees as provided by ORS 469B.326 for applicants. All fee payments are non-refundable, despite the results of the department’s review.

(1) Applicants must submit an application fee of $200 with their preliminary certification application.

(2) Applicants selected for technical review will be required to pay a technical review fee prior to that review. The fee amount is equal to the allocated project cost multiplied by 0.55 percent.

(3) Applicants requesting amendments to preliminary certifications must submit a fee of $300 with their amendment request.

(4) Applicants for final certification must submit with their application a final review fee. This fee amount is equal to the allocated project cost multiplied by 0.5 percent. All applicants seeking final certification for a project are required to apply for final review and pay the final review fee.

(5) If the department is unable to complete a scheduled inspection due to actions by the applicant, the department will require the applicant to pay a re-inspection fee of $400 before rescheduling the inspection.

(6) Applicants that transfer their tax credit to a pass-through partner must pay a pass-through fee. The fee is due after a pass-through partner has been identified and before the department can issue a tax credit.

(a) If the department assists the applicant in obtaining a pass-through partner or partners, the fee for that assistance is 1.25 percent of the tax credit amount, up to $25,000, plus $100 per tax certificate issued.

(b) If the department does not assist the applicant in obtaining a pass-through partner, the fee is $100 per tax certificate issued.

(7) Applicants issued a tax credit that choose to have their tax credit re-issued to a transferee must pay a transfer fee of $200 plus $100 per tax credit certificate issued.

(8) If an applicant fails to pay fees timely as required by this rule, the department may reject the pending application and discontinue the review.

Stat. Auth.: ORS 469.040 & 469B.347
Stats. Implemented: ORS 469B.320–469B.347, 315.336 & OL 2012 Ch. 45
Hist.: DOE 5-2012, f. & cert. ef. 6-11-12

330-225-0050

Completeness Review and Allocation of Potential Tax Credits

(1) The department will determine the allocation of potential tax credits as detailed in the Opportunity Announcement prior to beginning review of an application.

(2) Tax credits must be claimed over a five year period as required by ORS 315.336, and as shown below:

(a) If a preliminary certification is issued on or after January 1, 2012, and before January 1, 2013, the tax credit is 25 percent of certified cost. The tax credit allowed in each of five tax years is 5 percent of the certified cost.

(b) If a preliminary certification is issued on or after January 1, 2013, and before January 1, 2014, the tax credit is 20 percent of certified cost. The tax credit allowed in each of five tax years is 4 percent of the certified cost.

(c) If a preliminary certification is issued on or after January 1, 2014, and before January 1, 2015, the tax credit is 15 percent of certified cost. The tax credit allowed in each of five tax years is 3 percent of the certified cost.

(d) If a preliminary certification is issued on or after January 1, 2015, and before January 1, 2016, the tax credit is 10 percent of certified cost. The tax credit allowed in each of five tax years is 2 percent of the certified cost.

(3) The department will review all preliminary certification applications to determine whether:

(a) All sections of the application are complete as outlined in the Opportunity Announcement.

(b) The applicant has submitted the required fee.

(c) The service meets the definition of transit services.

(d) The applicant is applying prior to the performance of the project.

(A) If the applicant applies after performance of the project has started, the department will deny the application unless a written explanation of the special circumstances is received and approved by the director. The director may pre-qualify waivers as provided in the Opportunity Announcement; a written description is not required for the period covered by a pre-qualified waiver.

(B) Failing to submit a timely application or not being selected for a grant or tax credit under this or prior department programs does not constitute special circumstances.

(e) The transit services are located in Oregon.

(f) Other requirements described in the Opportunity Announcement have been met.

(4) If the department finds that the application is complete, the application will be included in the process used to allocate potential tax credits.

(5) The department will deny all incomplete applications and notify applicants in writing of the reason for denying the application.

(6) If the department receives applications with a total amount of requested potential tax credits in excess of the amount available for the Opportunity Announcement, the department will use the following process to allocate potential tax credits between applicants. The department will:

(a) Include all complete applications received within the opportunity period in the allocation process.

(b) Sum the total requested tax credit amount of all complete applications and determine the percent of the total requested tax credit amount represented by each application.

(c) If any applications represent 20 percent or more of the total, restrict those applications to 20 percent.

(d) If step (c) results in a total of less than 100 percent, re-allocate the percentage points between applications, excluding those restricted to 20 percent.

(e) Repeat the reduction (c) and re-allocation (d) steps until all the available tax credits are allocated.

(f) Calculate the potential tax credit allocated to each application to ensure no application is allocated more than the requested amount.

(g) If an application is allocated more than the requested amount, allocate the additional amount proportionately to applicants restricted to 20 percent of the total.

(7) The department will notify applicants of the amount of potential tax credit allocated and the fee payment required for technical review.

(8) If the allocation of potential tax credits to an applicant is reduced during the same biennium that the tax credits were first allocated, the department may reallocate the unallocated potential tax credits to applicants from the same Opportunity Announcement that were allocated less than their requested amount.

(9) The department considers the completeness review as a test; the decision to deny an incomplete application is not subject to review under ORS Chapter 183.

Stat. Auth.: ORS 469.040 & 469B.347
Stats. Implemented: ORS 469B.320–469B.347, 315.336 & OL 2012 Ch. 45
Hist.: DOE 5-2012, f. & cert. ef. 6-11-12

330-225-0070

Technical Review

(1) Once the applicant has paid the technical review fee, the department will conduct a technical review of transit services project applications advanced from the completeness review process. If the applicant does not submit the required technical review fee to the department within 21 calendar days of mailing of the notification for technical review, the department may deny the application.

(2) The department will review the information provided in the application against industry standards to determine whether the service will operate as represented by the applicant.

(3) To be eligible the transit services must meet the following requirements:

(a) The project must meet the requirements of the statutes, these rules and the Opportunity Announcement. Transit services may operate for a period of less than five years.

(b) The applicant must be the owner, contract purchaser or project lessee at the time of the project’s performance.

(c) The applicant must be a recipient or sub-recipient of state or federal funds for the transit services included in the application.

(A) “Recipient” refers to the entity that directly receives funds from the state or federal agency for transit services.

(B) “Sub-recipient” refers to the entity that directly receives state or federal funds from a recipient for transit services. Vendors or contractors of recipients who are not an owner, contract purchases or lessee of the project are not considered sub-recipients and may not submit applications.

(4) The department will review transit services costs for eligibility. If a cost is eligible under the agreement that qualifies the applicant as a recipient or sub-recipient, it will be considered a qualifying service cost. The application must document cost by providing a line item budget.

(a) Transit services cost may include:

(A) Costs for all materials and supplies needed for the performance of the proposed transit services;

(B) Cost of work performed by employees or independent contractors of the applicant based on the following conditions:

(i) Employees or contractors must be certified, accredited, licensed or otherwise qualified to do the work;

(ii) The work must be associated with the performance of the transit services for which state or federal funds were received;

(iii) Fiscal administration costs, which may include accounting, auditing, contract management and fiscal reporting expenses and other similar costs for the transit services may not exceed 20 percent of the eligible costs; and

(iv) Costs for employees’ or contractors’ work on the transit services must be detailed and documented as to specific tasks, hours worked and compensation costs. This cost may include employee benefits and taxes.

(C) Costs of training associated with the transit services that is approved by the department; and

(D) Other costs the department determines should be included.

(b) Qualifying transit services cost does not include items that are ineligible under the standards for federal Office of Management and Budget Circular A-87 as in effect on May 10, 2004 or A-122 as in effect on May 10, 2004.

(5) If an application does not include all information needed to complete the technical review, the department may notify the applicant in writing, requesting additional information. If the department does not receive the requested information within 30 calendar days of the date of the notice, the department may deny the application.

(6) The department will notify the applicant in writing if the department denies the application during the technical review.

(7) If the technical review determines that inaccurate information was submitted by the applicant during the allocation of tax credits, the department may reduce the amount of potential tax credit allocated to the applicant.

Stat. Auth.: ORS 469.040 & 469B.347
Stats. Implemented: ORS 469B.320–469B.347, 315.336 & OL 2012 Ch. 45
Hist.: DOE 5-2012, f. & cert. ef. 6-11-12

330-225-0080

Preliminary Certification

(1) The department may issue a preliminary certificate if it determines that the transit services are technically feasible and capable of operating in accordance with the representations made by the applicant. The department may issue a tax credit that is less than the amount requested in the transit services application, pursuant to statute and applicable rules.

(2) The sum of any state or federal funding and the transit services incentive may not exceed project costs.

(3) The preliminary certificate will state the qualifying project cost, the potential amount of allowable tax credit and any conditions for claiming the credit.

(4) A preliminary certification remains valid for a period of three calendar years after the date the department issues the original preliminary certification or until the sunset of the program, whichever comes first.

Stat. Auth.: ORS 469.040 & 469B.347
Stats. Implemented: ORS 469B.320–469B.347, 315.336 & OL 2012 Ch. 45
Hist.: DOE 5-2012, f. & cert. ef. 6-11-12

330-225-0090

Amendments to Preliminary Certifications

(1) The applicant must notify the department of any changes to the project described in the application for preliminary certification.

(2) An applicant must declare all changes to the transit services by the time the department receives the final certification application. Undeclared changes found in the application for final certification or through later inspection may result in denial of final tax credit certification.

(3) The applicant must submit an amendment request to the director to amend a transit services preliminary certification for any changes to the project.

(4) Applicants must submit amendments on the form specified in the Opportunity Announcement.

(5) The applicant must demonstrate that the transit services project, with the proposed change, would continue to be technically feasible and would operate as represented. The applicant has the responsibility to provide an amendment request with complete documentation that will support a case for the proposed amendment. The department may deny amendments submitted without such justification.

(6) An amendment may result in a reduction in tax credit, but may not increase the tax credit amount certified in the preliminary certificate.

(7) If an amendment request does not include all information needed to complete the review, the department may provide the applicant a written request for additional information. If the applicant does not provide the requested information to the department within 30 calendar days, the department may deny the request to amend the preliminary certification.

(8) Requests for amendments must include payment of the appropriate fee. The department may accept non-substantive changes, such as change of contact information, without payment of the fee.

(9) The department will decide whether to approve the amendment request.

(a) If approved, the department will draft an amended preliminary certification, which may contain new or amended conditions and requirements.

(b) If denied, the department will notify the applicant in writing. The notice will include the reasons for the denial of the amendment request.

Stat. Auth.: ORS 469.040 & 469B.347
Stats. Implemented: ORS 469B.320–469B.347, 315.336 & OL 2012 Ch. 45
Hist.: DOE 5-2012, f. & cert. ef. 6-11-12

330-225-0100

Final Certification

(1) Transit services projects must be completed prior to applying for a final certification. An applicant must submit amendments to preliminary certifications prior to or at the time of submission of the final certification application.

(2) The department will not review applications for final certification received after the expiration of the preliminary certification or without the final review fee.

(3) The applicant must submit the application on the current department-issued form and all sections must be completed.

(4) The department will review the application, and may conduct an inspection, to verify:

(a) That the transit services project was completed.

(b) Compliance with statute, rules, the relevant Opportunity Announcement and the preliminary certification.

(c) Compliance with state and local regulations, including required licenses and permits.

(d) That the transit services project was maintained and operated for the period specified in the preliminary certification.

(e) The costs for performance of the project were paid in full.

(A) The applicant must verify the actual costs of the project by providing an attestation of costs provided by a certified public accountant or a copy of a completed audit, in compliance with federal Office of Management and Budget Circular A-133 as in effect on June, 2010 or if the cost is less than $50,000 the applicant must submit copies of receipts for the project.

(i) The certified public accountant cannot be the project owner, nor permanently employed by the project owner or pass-through partner.

(ii) Receipts for proof of payment may include canceled checks, credit card statements, binding contracts or agreements.

(iii) The department may waive the requirement for a certified public accountant attestation of costs if the entity has been the subject of an audit conducted within the two years prior to the date at which the final application is received and the audited accounts include the costs of the transit services project.

(B) The application must demonstrate that contract or loan agreements directly related to the project are not in default.

(C) The application must include information regarding all incentives and grants, regardless of source, applied for or received in connection with the project.

(f) Other information the director considers necessary.

(5) If an application for final certification does not include all information needed to complete the final certification review, the department may ask the applicant, in writing, to submit additional information. If the department does not receive the requested information within 30 calendar days of the date of the notice, the department may deny the application for final certification.

(6) The department will notify the applicant, in writing, if the department denies the application during final review. An applicant may submit a written request for reconsideration within 60 days after the department issues a decision on a final certification.

(7) The department will issue a final certification upon verification that performance of the transit services are complete and that the project complies with statute, rules, the relevant Opportunity Announcement, the preliminary certification and any other applicable requirements.

(a) The department may certify a lesser tax credit amount than approved in the preliminary certificate, but may not certify a greater amount.

(b) The sum of any state or federal funding and the tax credit may not exceed final project costs.

(c) If the final certification review determines that the final costs are less than the information submitted by the applicant during the allocation of tax credits, the department may reduce the amount of tax credit certified.

(8) The department will send a written notification to the applicant of its decision whether to issue a final certification within 60 days after the department receives a complete application for final certification. If more than 60 days pass from the date the applicant submits a complete application and the applicant has not received a written decision from the department, then the application is rejected and no further action will be taken. Any time required to provide additional information as provided in OAR 330-225-0100(5) is not included in this 60 day period.

Stat. Auth.: ORS 469.040 & 469B.347
Stats. Implemented: ORS 469B.320–469B.347, 315.336 & OL 2012 Ch. 45
Hist.: DOE 5-2012, f. & cert. ef. 6-11-12

330-225-0150

Compliance and Pass-through

All participants in this program are subject to OAR 330-230-0000 through 330-230-0140.

Stat. Auth.: ORS 469.040 & 469B.347
Stats. Implemented: ORS 469B.320–469B.347, 315.336 & OL 2012 Ch. 45
Hist.: DOE 5-2012, f. & cert. ef. 6-11-12

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, 2011.

2.) Copyright 2012 Oregon Secretary of State: Terms and Conditions of Use

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