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The Oregon Administrative Rules contain OARs filed through August 15, 2014
 
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OREGON BUSINESS DEVELOPMENT DEPARTMENT

 

DIVISION 97

INDUSTRIAL SITE READINESS

123-097-0100

Purpose

This division of administrative rules establishes procedures and standards for the certification and use of regionally significant industrial sites, which are the basis of tax reimbursement arrangements and (potentially forgivable) loan agreements with local entities under the Industrial Site Readiness Program (“Program”) and ORS 285B.625 to 285B.632 (2013).

Stat Auth: ORS 285A.075, 285B.626(1) & (8), 285B.627(10) & 285B.630(7)
Stats. Implemented: ORS 285B.625 - 285B.632
Hist.: OBDD 9-2014, f. 4-30-14, cert. ef. 5-1-14

123-097-0200

Definitions

ORS 285B.626 and OAR 123-001 (Procedural Rules) contain definitions used in this division of administrative rules. In addition, unless the context requires otherwise:

(1) “Business” means any individual, association of individuals, joint venture, partnership, limited liability company or corporation operating and authorized to conduct business in this state and does not include any governmental agency or public, municipal or nonprofit corporation.

(2) “Certified Industrial Land” means a site currently certified by the department under another program pursuant to ORS 284.565 and 285A.200(3)(b).

(3) “RSIS” means a certified ‘Regionally Significant Industrial Site,’ as defined under ORS 285B.626(6), that has been certified per OAR 123-097-0500, and for which all or portions of the property belong to the sponsor as a public owner or to one or more private owners, with whom the sponsor has entered into agreement.

(4) “Employee” means a person employed by a business that is an ‘eligible employer,’ as defined under ORS 285B.626(2) and described in OAR 123-097-2500, to perform work generally at the location of the RSIS, and for whom the business is her/his employer for purposes of withholdings under ORS 316.162 to 316.221, regardless of the person’s residency in this state.

(5) “Incremental Revenue” means the estimated incremental income tax revenues generated under ORS 285B.630 by an eligible employer through the payment of taxable income to its applicable employees.

(6) “Loan Agreement” means the binding contract between the sponsor and the department, establishing the terms, conditions and repayment of moneys that the sponsor borrows to undertake a Project, which may or may not be partially forgivable with Incremental Revenue.

(7) “Metro” means the metropolitan service district (for the Portland region) under ORS chapter 268.

(8) “Private owner,” as used in ORS 285B.626(5)(b), means one or more persons, businesses or nongovernmental organizations that hold clear and lawful title to RSIS property, even if not owning it outright, and subject to the department’s acceptance, it may mean a private developer with total and direct legal authority for the improvement and disposition of the property from the actual private owner.

(9) “Project” means the plans, investment and undertakings of the sponsor to develop land and otherwise ready a RSIS for actual industrial use in the form of eligible site preparation costs described in OAR 123-097-2000.

(10) “Public entity,” as used in ORS 285B.626(5)(b), means a government or agency of a:

(a) Local service district under ORS 174.116(2) that has a general and abiding interest in the re/development of land within its territory for industrial use and employment, such as a port, airport or county service district; or

(b) City, county or federally recognized Indian Tribe in Oregon, but excluding organizations under ORS chapter 190.

(11) “Public owner,” as used in ORS 285B.626(5)(a), means any Tribe, local government or local service district in Oregon that owns all of the RSIS.

(12) “RSIA” means a Regionally Significant Industrial Areas designated as such by:

(a) The Economic Recovery Review Council under ORS 197.723, as described in or proposed for OAR 966; or

(b) The Metro Council for regulation under Title 4 of Metro’s Urban Growth Management Functional Plan, Metro Code Chapter 3.07.

(13) “Sponsor” means a ‘project sponsor,’ as defined under ORS 285B.626(5) for a particular RSIS, although the same public entity/owner may sponsor multiple sites.

(14) “Taxable income” means remuneration paid by a business to its employees that is or normally would be used in calculating amounts withheld under ORS 316.162 to 316.221 for purposes of the employees’ Oregon personal income taxes.

(15) “Tax year,” as used in ORS 285B.626, 285B.627 and 285B.630, means the calendar year, over which an eligible employer pays taxable income to applicable employees preceding calculation of Incremental Revenue.

(16) “TRA” means the Tax Reimbursement Arrangement (TRA) taking the form of a binding contract between the department and the sponsor, pursuant to which the sponsor may receive Incremental Revenue relative to Project costs and pursuant to the procedures herein.

Stat Auth: ORS 285A.075, 285B.627(10) & 285B.630(7)
Stats. Implemented: ORS 285B.625 - 285B.632
Hist.: OBDD 9-2014, f. 4-30-14, cert. ef. 5-1-14

123-097-0500

Regionally Significant Industrial Site Certification

In receiving an application for qualification in OAR 123-097-1000, the department must find under ORS 285B.627(2) based on evidence provided by the sponsor that a discrete area (which may include brownfields or Certified Industrial Land) is a RSIS:

(1) Contiguous land comprising all or part of a RSIA and entirely inside the RSIA is automatically so certified.

(2) A proposed, RSIS not within a designated RSIA must be:

(a) Planned and expressively zoned -- and otherwise suitable -- for industrial uses (Note: an eligible employer could engage in traded services or other activities that would be “commercial” in a land-use or other sense, given the definition of “traded sector” and the reality of what industrial zoning often permits);

(b) Contiguous acreage subject to section (3) of this rule, which may comprise one or more tax lots or sites, at which complementary or integrated development can occur;

(c) Vacant or have enough undeveloped land, so that existing industrial operations have at least the potential to expand by 25 percent or more, for example, in terms of facility square footage or productive capacity, and to significantly increase employment;

(d) Unique in one or more ways that are not generally replicable in the surrounding region, and that make it significantly attractive for industrial uses, such as size, configuration, amenities or intrinsic features; and

(e) Able to support exceptional transportation and shipping service through direct access or very efficient linkages to rail, port, airport, interstate freeway, multimodal freight, transshipment or other transportation infrastructure, which may depend on public improvements as part of the Project. If the proposed site has two or more distinct transportation advantages, then one or more may count for purposes of subsection (d) of this section.

(3) The department may establish further guidelines that apply to certifying RSIS sites with which would vary by rural and metropolitan location, in that:

(a) Project activities can be carried out to substantially and directly benefit the land in question;

(b) The ensuing improvements in site readiness will then be able to support additional employment (above the current or previous level) that would be significant within the defined region; and

(c) Similar objectives.

Stat Auth: ORS 285A.075 & 285B.627(2)(a) & (10)
Stats. Implemented: ORS 285B.625, 285B.626 & 285B.627
Hist.: OBDD 9-2014, f. 4-30-14, cert. ef. 5-1-14

123-097-1000

Project Sponsor Application

In seeking qualification under ORS 285B.627(3) and (4), a would-be sponsor must submit materials to the department, according to a format prescribed by the department, that:

(1) Fully identify the Certified RSIS including but not limited to mapping, property description and tax lots, evidence for OAR 123-097-0500, and that it is inside the sponsor’s jurisdiction, territory or urban growth boundary;

(2) Verify the current ownership and title to the land, as well as all associated encumbrances, easements, liens, or the like, including but not limited to addressing their potential to interfere with the implementation or effectiveness of the Project;

(3) Include executed copy of the formal development or other agreement with any private party, who owns all or portions of the property comprising the RSIS or rights critical to its re/development, stipulating among other things that:

(a) The sponsor will acquire such property or rights at the outset of the Project; or

(b)(A) The sponsor has complete authority to carry out the proposed Project on and at such property; and

(B) That then, either the property will be transferred to the sponsor, or it will be made reasonably available for purchase or lease by an eligible employer, in which case:

(i) The agreement shall provide for the sponsor’s control over disposition of the property; and

(ii) The parties shall consider if public investments in site preparation could affect the property’s market value, and as appropriate, that the sponsor would share in the proceeds from any such windfall gain in value;

(4) Generally delineate the sponsor’s development plans, estimated budget that make up the proposed Project (to be refined, further specified or possibly modified with any resulting Loan Agreement or TRA), as well as how the sponsor intends to prepare the RSIS for industrial uses; and

(5) Address other related matters required by the department’s instructions for making application.

Stat Auth: ORS 285A.075 & 285B.627(3), (4) & (10)
Stats. Implemented: ORS 285B.625, 285B.626 & 285B.627
Hist.: OBDD 9-2014, f. 4-30-14, cert. ef. 5-1-14

123-097-1500

Application Process

(1) For purposes of applications received in OAR 123-097-1000, the department will consider them in the order received, except that it may give priority to compelling and urgent opportunities that advance the public purposes of the Program, or it may delay final processing due to extenuating circumstances or complexities.

(2) In undertaking technical review of the application, the department shall:

(a) Consult with the Governor’s Regional Solutions Team and other state agency staff as appropriate.

(b) Seek to resolve deficiencies or questions in writing with the sponsor to ensure a complete application, denying it if deficiencies remain after 60 days.

(3) Criteria affecting sponsor qualification are:

(a) Site certification standards in OAR 123-097-0500(2) as applicable;

(b) Stipulations in OAR 123-097-1000;

(c) The relevance of proposed Project activities and the reasonableness of their estimated costs;

(d) Feasibility of carrying out the Project and the absence of legal and other impediments to doing so; and

(e) Likelihood that the Project will substantially advance the readiness of the RSIS for re/development and actual use by an eligible employer.

(4) Within 30 days of determining the application to be complete, the department will draft a staff report and recommendation. If favorable, a memorandum of the director to the sponsor will finalize the qualification.

(5) If denied, the department will provide a letter to the applicant detailing reasons the submission was incomplete or did not satisfy criteria. The applicant may resubmit at any time as described in this division of administrative rules.

(6) With formal concurrence of the sponsor the department may condition or restrict proposed Project elements or activities to conform to OAR 123-097-2000.

(7) For any formal response timely received before June 30, 2023, the department will respond to the qualified sponsor’s request to enter into TRA described in OAR 123-097-3000 or a Loan Agreement described in OAR 123-097-3500 to 123-097-3700.

(8) The same Project costs or activity may not be contained in both TRA and Loan Agreement.

Stat Auth: ORS 285A.075 & 285B.627(3), (4) & (10)
Stats. Implemented: ORS 285B.625, 285B.626 & 285B.627
Hist.: OBDD 9-2014, f. 4-30-14, cert. ef. 5-1-14

123-097-2000

Eligible Project Costs

Project costs for loan forgiveness/tax reimbursement under the Program:

(1) Project costs must be incurred and site preparations implemented in:

(a) Compliance with applicable state and federal laws, regulations and legal requirements, such as State prevailing wage rates, public procurement strictures, and municipal audit and budgeting procedures, as well as local and regional development codes and standards; and

(b) Accordance with applicable and current state and federally approved plans, for example, a brownfields remediation plan.

(2) Costs to undertake the following activities are eligible in preparing a RSIS, in terms of direct management, technical oversight or verification, contractor fees, dedicated equipment, labor, materials and so forth, except as excluded in section (3) of this rule:

(a) Assembly and consolidation of parcels comprising the RSIS, so that it can be effectively transacted and used by eligible employers, including surveying, real estate, title, lot adjustment, legal, processing and similar costs external to the sponsor, as well as the sponsor’s acquisition or conveyance of parcels, easements, rights of way, or the like, for which the agreement with any private owner (such as an option to buy) is submitted according to OAR 123-097-1000(3).

(b) Making the ground suitable for new construction or reconstruction, subject to subsection (d) of this section, including but not limited to the demolition of existing structures, clearing brush, disposal of materials, geotechnical testing, pilings, drainage, drilling, blasting, fill, leveling or grading.

(c) Extending, increasing or physically providing utility services or surface transportation access to the RSIS, subject to subsection (d) of this section, through improvements that will remain in public ownership or as part of RSIS property, including infrastructure for:

(A) Electricity, natural gas or telecommunications that is located on or near and directly serves only the Certified RSIS.

(B) Water, sanitary sewer or storm sewer that directly serves the RSIS.

(C) Transportation in the form of new/upgraded roadways or railway sidings, or improved traffic flow, safety or system capacity in the immediate vicinity by installing or augmenting intersections, lanes, signals, crossings, curbs, storm drainage, or associated amenities for pedestrians, bicyclists or transit.

(D) Which only the RSIS’s proper share of costs, including but not limited to hook-up fees and SDCs, applies to Program reimbursement or loan forgiveness, insofar as improvements described in paragraph (B) or (C) also benefit a discrete number of other properties in the immediate vicinity, as indicated in qualified Project plans, and only if the costs can be objectively apportioned among all properties.

(d) Eliminating the barrier to re/development posed by the need (including but not limited to requirements under state or federal law) to remediate, remove, protect, preserve or mitigate natural resources, cultural resources or environmental concerns or hazards at the RSIS, such as:

(A) Archaeological excavation and appropriate treatment or transfer of remains or artifacts to prevent unlawful disturbance;

(B) Remedial or removal actions to resolve brownfields issues or a hazardous substance under ORS 465.200; or

(C) Acquiring or securing control of off-site property or wetlands mitigation work at such property or on-site.

(e) Planning, engineering and administration required to directly make application for a local, state or federal permits that:

(A) The sponsor needs before undertaking activities described in this section, and for which technical information is otherwise available to have reasonable confidence of obtaining the permit; or

(B) An eligible employer needs before commencing re/development, re/construction or industrial use.

(f) Interest and associated expenses paid by the sponsor or accrued:

(A) On money borrowed consistent with a TRA in accordance with paragraph (3)(h)(B) of this rule; or

(B) Under a Loan Agreement as circumscribed in OAR 123-097-3700.

(3) Expenditures and costs not expressly allowed in section (2) of this rule are ineligible, including but not limited to:

(a) Purchase of vehicles or equipment not directly related to the Project;

(b) Operation or maintenance of infrastructure and facilities;

(c) Federal or state penalties or fines related to permit or other violations;

(d) Post-project monitoring, sampling and analytical services;

(e) Any remedial efforts in relation to superfund sites on the National Priorities List, if one or more of the following is liable under 42 USC 9607, specifically with respect to the RSIS: the sponsor, private owner, eligible employer, any other party to the TRA or Loan Agreement, or any business under common control of one of the foregoing;

(f) Off-site construction, public improvement or system development, even if necessary to generally increase system-wide capacity related to the RSIS;

(g) Administration and management by the sponsor or private owners;

(h) Repayment and expenses arising from debt, except in the case of:

(A) Refinancing temporary financial assistance through the department or authority related specifically to preparation of the Certified RSIS;

(B) Principal, interest, closing costs and customary fees arising from borrowing to pay Project costs described in section (2) of this rule through any financing source, as allowed by the TRA and department, which may disallow interest charges deemed unreasonable or usurious; or

(C) Loan forgiveness conforming to OAR 123-097-3700;

(i) Development, construction or other facility investments by an eligible employer;

(j) Activity to improve, upgrade, repair or remediate structures existing on the RSIS, other than for utility service; or

(k) Reports, studies, planning, assessments, samplings, investigations, site characterizations, delineations, engineering, architectural fees, financial evaluations, legal reviews or the like, even if necessary to define a proposed activity described in section (2) of this rule, unless in applying for qualification, the sponsor demonstrates that:

(A) Any such future pre-Project analytical/design work is not better funded separately through other sources of public financing;

(B) It will critically and directly lead to the proposed activity; and

(C) There is otherwise sufficient analytical/design work available to be confident in the proposed activity’s feasibility, scope and general costs.

(4) In qualifying the sponsor in OAR 123-097-1500, the department may allow as part of the Project certain costs that the sponsor has already incurred since October 7, 2013, or 18 months before its submission of a complete application, whichever is more recent, but only for purposes of a TRA and for Project activities described in section (2).

Stat Auth: ORS 285A.075 & 285B.627(7) & (10)
Stats. Implemented: ORS 285B.625, 285B.626 & 285B.627
Hist.: OBDD 9-2014, f. 4-30-14, cert. ef. 5-1-14

123-097-2200

Sponsor Responsibilities

In carrying out the Project, to maintain the eligibility of costs described in OAR 123-097-2000:

(1) The sponsor shall:

(a) Maintain accounts and records for all activities and expenditures associated with the Project and the Loan Agreement or TRA, giving the department and its representative’s reasonable access to such records, in addition to invoicing the department for costs incurred in completing Project activities as described in OAR 123-097-4500.

(b) Ensure that service providers retained for their professional expertise are certified, licensed, or registered, as appropriate or necessary in the State of Oregon for their specialty.

(c) Follow standard construction practices, such as requiring bonding, applicable insurance, inspections, use of as-built drawings, and so forth on the Project.

(d) Devise plans as necessary for the ongoing operation, maintenance and upgrade of infrastructure and remediation work that will preserve their benefits over their normally useful life.

(e) Guarantee that the RSIS will remain zoned for industrial use for not less than 20 years from when the Loan Agreement or TRA is executed.

(f) Actively participate with eligible employers in timely submitting annual reports as required in OAR 123-097-2600.

(2) For purposes of requisite signage posted at the RSIS and visible to the generally public, which the department may furnish, as well as all plans, bids, advertisement and other documents for the Project:

(a) The sponsor shall see that they prominently bear the statement, “Project supported through the Oregon Industrial Site Readiness Program Fund, administered by the State of Oregon Business Development Department.”

(b) In the event that a Loan Agreement is in effect funded with state lottery proceeds used to capitalize the Oregon Industrial Site Readiness Program Fund under ORS 285B.632, the sponsor shall also comply with ORS 280.518 requiring public display of information on lottery funding, including that the statement in subsection (a) of this section also says, “..., and funded by Oregon State Lottery proceeds.”

(3) Responsibilities contained in this rule may affect the sponsor’s receipt of Program loan award, loan forgiveness or tax reimbursements whether or not confirmed in the TRA or Loan Agreement, which may specify additional responsibilities.

Stat Auth: ORS 285A.075 & 285B.627(7) & (10)
Stats. Implemented: ORS 285B.625 & 285B.627
Hist.: OBDD 9-2014, f. 4-30-14, cert. ef. 5-1-14

123-097-2500

Eligible Employer Contracts

(1) The availability of Incremental Revenue to benefit a sponsor (by reimbursing Project costs under a TRA or by forgiving part of amounts borrowed) hinges on one or more businesses with new/additional employment at the RSIS. Such a business must be an eligible employer under ORS 285B.626(2), who meets applicable requirements in this division of administrative rules.

(2) An eligible employer must conduct traded-sector business operations that are:

(a) Located at the RSIS;

(b) New or expanded since entering into the contract in section (3) of this rule; and

(c) Not relocated from another part of this state, except as addressed in the contract and shown through annual reporting that the operations would otherwise have located outside this state, but for the Project, and net employment of the business in this state increased at least initially.

(3) The sponsor qualified per OAR 123-097-1500 must execute a contract with the eligible employer in form and substance as prescribed by the department, including but not limited to:

(a) Establishing the business’s existing operations, average employment and number of full-time employees, if any, at the RSIS and statewide;

(b) The business’s and sponsor’s joint obligation to annually submit reports under ORS 285B.630(1) in accordance with OAR 123-097-2600(1); and

(c) The requirements in OAR 123-097-2600(2).

(4) ORS 285B.625 to 285B.632 does not grant the sponsor any power to compel an eligible employer to enter into such a contract. Therefore, sponsors shall consider and plan for appropriate means to ensure that the business’s use of the RSIS is effectively contingent on its respective cooperation.

(5) The sponsor shall furnish a signed copy of the contract to the department within 30 days of its execution or when submitting the request for a Loan Agreement or TRA, whichever happens later.

Stat Auth: ORS 285A.075 & 285B.627(10)
Stats. Implemented: ORS 285B.625, 285B.626, 285B.627 & 285B.630
Hist.: OBDD 9-2014, f. 4-30-14, cert. ef. 5-1-14

123-097-2600

Eligible Employee Criterion & Annual Reporting

Pursuant to the contract in OAR 123-097-2500:

(1)(a) An eligible employer and sponsor must annually complete a form available from the department and send it to the department after January 1 but on or before April 1 after every tax year:

(A) That ended after execution of requisite contract;

(B) During which new employees of the business worked at the RSIS and received taxable income for their work; and

(C) That begins (January 1) more than four full tax years after the date of the director’s memorandum in OAR 123-097-0150, so that for example, if final sponsor qualification is on June 4, 2014, then the initial tax year would be 2019, and an annual report, potentially due not later than April 1, 2020.

(b) With respect to the just concluded tax year, the completed form shall provide:

(A) Both new and overall average employment and numbers of full-time employees of the business at the RSIS;

(B) Total compensation and taxable income for average employment and of full-time employees, both new and overall;

(C) The State business identification number (BIN) of the eligible employer for potential corroboration of employment and income through confidential Oregon Employment Department data; and

(D) Other information prescribed in the form by the department or the Department of Administrative Services.

(c) In the event the eligible employer had existing employment at the RSIS, Incremental Revenue shall relate to the taxable income attributable to the net increase in average employment, so that if existing jobs/positions were eliminated, total new taxable income would equal that net increase multiplied by the average taxable income per full-time equivalent (FTE) of all newly created jobs/positions.

(2) In order for the business to be eligible and its income data to be used in that reporting cycle for estimating Incremental Revenue, the form will indicate that for the preceding tax year:

(a) A number of new full-time employees at the RSIS were residents of this state, and all of those employees received average annual compensation equal to or greater than 150 percent of wage (see subsection (5)(g) of this rule); and

(b) The business also satisfied the following performance measures under ORS 285B.627(10), respective to all workers at the RSIS regardless of residency, which the sponsor shall include in the contract according to the terminology in this rule, at minimum will include;

(A) Average number FTEs;

(B) Average employment changes from previous report;

(C) Average annual compensation for overall employment;

(D) Average annual compensation for new employment.

(3) In addition to subsection (2)(b) of this rule, the eligible employer’s operations must pertain only to the RSIS, and they must be unrelated to employment or pay, except that the sponsor may set conditions for the minimum:

(a) Hourly wage paid to all or a portion of new employees as a percentage above the concurrent Oregon minimum wage; or

(b) Density of site employment relative to acres.

(4) For purposes of this rule, eligible employee criterion within a RSIS and annually reported data (unless the context dictates otherwise) the criterion defined as follows:

(a) ‘Average employment’ refers to the number of full-time equivalents (FTEs) derived by dividing hours worked over the course of a year among all applicable employees by 1,820 hours, which would also be used to annualize full-time salaried positions created part way through the tax year.

(b) ‘Compensation’ under ORS 285B.626(1) means all remuneration to employees in the form of taxable income, such as wages & salary, overtime pay, shift differential, profit-sharing, bonuses or paid vacation, and associated fringe or financial benefits (whether taxable or not), including life insurance, medical coverage or retirement plans, but excluded are workplace amenities and payroll taxes or costs similarly mandated to be paid directly by the employer under federal, state or local law.

(c) ‘Full-time employees’ are persons, whose job or position is year-round, and who received reimbursement or paid time (such as sick leave) for more than 32 hours per week on average.

(d) ‘Hours worked’ include all hours that an employee worked, and not holiday, vacation, sick leave or any other paid time where no work was performed.

(e) ‘New’ or ‘newly’ means either the net increase in the eligible employer’s average employment over the level in the contract, or all jobs and positions created for full-time employees since execution of the contract between the sponsor and eligible employer.

(f) ‘Overall’ comprises both existing and new employees/employment.

(g) ‘Wage’ under ORS 285B.626(8) means the average annual covered payroll of all employees for all industries in the state or in the county containing the RSIS, whichever is less, as most recently published by the Oregon Employment Department when an annual report is submitted.

Stat Auth: ORS 285A.075, 285B.626(1) & (8), 285B.627(10) & 285B.630(7)
Stats. Implemented: ORS 285B.625 - 285B.632
Hist.: OBDD 9-2014, f. 4-30-14, cert. ef. 5-1-14

123-097-3000

Tax Reimbursement Arrangements

For purposes of a TRA under ORS 285B.627(5)(a):

(1) Upon formal request of a sponsor qualified in accordance with 123-097-1500, the department may finalize a contract with the sponsor to reimburse it for Project costs under terms and conditions consistent with this division of administrative rules.

(2) The TRA shall remain in effect indefinitely, until the sponsor’s total Project costs that are expected to ever be realized have been reimbursed or other events cause termination as provided in the contract.

(3) In its request for the TRA the sponsor must specify what other funds, if any, will be used and are needed to complete preparation of the RSIS, including but not limited to Project activities.

(4) The sponsor must demonstrate that it is willing and able to enter into a contract with the department, and that it has or can obtain the administrative capacity to undertake and complete the Project.

(5) Unfinished elements of the Project must be ready to begin, and the sponsor must commit in writing that if awarded the TRA activity will proceed.

(6) The department shall consider the reasonableness of the sponsor’s plans and estimated costs to prepare the RSIS, such that notwithstanding Project costs or activities allowed at qualification, the department may impose conditions or limitations on activities or reimbursable amounts. The total amount subject to reimbursement may not exceed final Project costs established in the contract, as the parties may mutually agree to amend or revise.

(7) The department shall reimburse Incremental Revenue received for that RSIS only after entering into a binding contract (the TRA) in form and substance as provided by the department, which shall stipulate that:

(a) Any and all reimbursements will be done in accordance with terms of the contract;

(b) The liability of the department under the contract is subject to temporary postponement or deferral at the discretion of the department in order to best comply with the cap under ORS 285B.627(8);

(c) Reimbursements may be made only pursuant to authorization of the TRA by the sponsor’s governing body through resolution adopted in accordance with the sponsor’s requirements for public notice;

(d) Reimbursement may commence in the fiscal year only after the initial tax year described in OAR 123-097-2600(1)(a);

(e) Any resulting reimbursement depends on information reported with an eligible employer in conformance with OAR 123-097-2600; and

(f) Amounts reimbursed must be satisfactorily invoiced and documented according to OAR 123-097-4500 and are limited to the total for all outstanding Project costs incurred by the sponsor.

Stat Auth: ORS 285A.075 & 285B.627(10)
Stats. Implemented: ORS 285B.625 & 285B.627
Hist.: OBDD 9-2014, f. 4-30-14, cert. ef. 5-1-14

123-097-3500

Loan Awards for Site Preparation

For purposes of a Loan Agreement under ORS 285B.627(5)(b):

(1) A sponsor qualified in accordance with 123-097-1500 may submit a request in the form and with documentation as prescribed by the department, in response to which the department may enter into a contract to loan money from the Oregon Industrial Site Readiness Program Fund (“Fund”) under terms and conditions consistent with this division of administrative rules.

(2) The contract may:

(a) Include amounts in addition to Project costs to otherwise prepare the RSIS for industrial uses; and

(b) Provide for partial forgiveness of Project costs under the loan according to OAR 123-097-3700, that shall not unduly affect the department’s underwriting assessment in this rule.

(3) The entire loan amount may not exceed the total of final Project costs and any additional amount documented in the sponsor’s loan request to prepare the RSIS, as determined by the department. The department will also base the maximum loan amount on financial and credit analysis of the sponsor and the sponsor’s ability to repay, the availability of moneys in the Fund, prudent funds management, and the annual cap under ORS 285B.627(8).

(4) In its request for the loan the sponsor must specify what other funds, if any, will be used and are needed to complete preparation of the RSIS, including but not limited to Project activities. If the sponsor identifies any state funds (whether grant or loan) as a source to repay the loan (principal or interest), the contract may not provide for loan forgiveness.

(5) Site preparation must be ready to begin, and the sponsor must commit in writing that if awarded the loan, such work will proceed.

(6) The department shall consider the reasonableness of the sponsor’s plans and estimated costs to prepare the RSIS, including but not limited to qualified Project costs, such that notwithstanding costs or activities allowed at qualification, the department may impose conditions or limitations on activities or loan amounts or may decline funding for what it determines is not functionally feasible or cannot be adequately secured.

(7) The sponsor must demonstrate that it is willing and able to enter into a contract with the department, and that it has or can obtain the administrative capacity to undertake and complete the Project and other site preparation activities to be funded out of loan proceeds.

(8) The department must find that the loan is secured by the pledge of utility revenues or other revenues, collateral, or payments from owners of specially benefited properties, and that such pledge is sufficient, when considered with other collateral or assets, to ensure repayment, and the sponsor has certified to the department that there will be adequate funds available to repay loan principal and interest.

(9) The loan shall, be a full faith and credit obligation payable from any taxes that the sponsor may levy within the limitations of Article XI, Sections 11 and 11b, of the Oregon Constitution and all legally available funds of the sponsor. This does not preclude that additional pledges of revenue or other collateral may be required as security, including but not limited to specific revenues of the sponsor, revenues arising from site improvements or special assessment revenues.

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

(11) The loan does not require match, although a Sponsor may be responsible for closing costs associated with the loan including but not limited to document preparation, review of documentation for legal sufficiency, title, escrow, and recording or filing fees.

(12) The department shall set the interest rate for the loan recipient (sponsor) at the time of awarding the loan based on subsidy need, credit risk and other appropriate considerations.

(13) Interest accrual, repayment terms, disbursement schedules and other necessary conditions shall be set by the department and stated in the contract. The maximum term of a loan shall not exceed 20 years from the date of loan closing.

(14) The department has discretion to vary loan terms and conditions from those enumerated in this rule as long as doing so serves to further the goals and objectives of the Program.

Stat Auth: ORS 285A.075 & 285B.627(10)
Stats. Implemented: ORS 285B.625 & 285B.627
Hist.: OBDD 9-2014, f. 4-30-14, cert. ef. 5-1-14

123-097-3600

Contract & Disbursement of Loan Award Funds

(1) The department shall disburse loan moneys from the Oregon Industrial Site Readiness Program Fund (“Fund”) only after entering into a binding contract with the sponsor in the form of a Loan Agreement according to OAR 123-097-3500.

(2) The contract shall be in form and substance as provided by the department and shall stipulate that:

(a) Any and all disbursements from the Fund will be done in accordance with terms of the contract;

(b) The liability of the Department under the contract to disburse loan money is:

(A) Contingent upon the availability of moneys in the Fund; and

(B) Subject to temporary postponement or deferral at the discretion of the department in order to best comply with the cap under ORS 285B.627(8);

(c) The department is granted a lien on, or a security interest in, the collateral as determined by the department to be necessary to secure repayment of disbursed loan amounts;

(d) Loan forgiveness (if provided) is circumscribed as described in OAR 123-097-3700; and

(e) Any other such necessary or appropriate function is met to make loan disbursements as required by the department.

(3) Before any disbursement:

(a) If a portion of other funds needed to complete preparation of the RSIS, as specified in OAR 123-097-3500(4), is not available or committed at the time the award is made, the award shall be conditional on securing the other needed funds or a binding commitment for such funds.

(b) The Loan Agreement must be authorized by an ordinance, order or resolution adopted by the sponsor’s governing body in accordance with the sponsor’s requirements for public notice and authorizing debt.

Stat Auth: ORS 285A.075 & ORS 285B.627(10)
Stats. Implemented: ORS 285B.625 & 285B.627
Hist.: OBDD 9-2014, f. 4-30-14, cert. ef. 5-1-14

123-097-3700

Forgiving Portion of Loans

If a Loan Agreement provides for forgiveness:

(1) With each fiscal year, the department shall apply a credit against outstanding (unamortized) loan principal based on the Incremental Revenue received for that RSIS, up to but not exceeding 50 percent of Project costs that the sponsor has incurred prior to the fiscal year.

(2) Any Incremental Revenue that accumulates may be applied later as further Project costs are incurred during or after that fiscal year, until the date that the term of the loan is completed.

(3) The department shall separately track interest paid or accrued on the loan, so that it does not base more than 20 percent of the amount forgiven each fiscal year on such amounts, until more than 20 percent can be used for lack of other Project costs, while still ensuring that such interest overall does not represent more that 20 percent of total loan forgiveness.

(4) Loan forgiveness is prohibited:

(a) If seven years after the date of the director’s memorandum in OAR 123-097-1500, the sponsor has not executed a contract with an eligible employers according to 123-097-2500; or

(b) Going forward, once any repayment of the loan (principal or interest) is actually made with any state funds (whether grant or loan) other than loan forgiveness by this rule.

(5) In addition, any loan forgiveness:

(a) May commence in a fiscal year only after the initial tax year described in OAR 123-097-2600(1)(a).

(b) Depends on information reported with an eligible employer in conformance with OAR 123-097-2600.

(c) Must be based on Project costs satisfactorily invoiced and documented according to OAR 123-097-4500.

(d) Does not count against the annual cap under ORS 285B.627(8) (rather, the earlier disbursement will have counted).

Stat Auth: ORS 285A.075 & ORS 285B.627(10)
Stats. Implemented: ORS 285B.625 & 285B.627
Hist.: OBDD 9-2014, f. 4-30-14, cert. ef. 5-1-14

123-097-4000

Generating Incremental Revenue & Reimbursements

Independently for each eligible employer, under ORS 285B.630:

(1) The department shall process only those annual reports received after the initial tax year described in OAR 123-097-2600(1)(a).

(2) The information compiled by the department and provided to the Department of Administrative Services:

(a) Shall depend on the reporting business’s current and continuing eligibility based on OAR 123-097-2500 and 123-097-2600; and

(b) May be subject to scrutiny and corroboration as appropriate and practicable, including but not limited to special communication with the business, documentation furnished through the sponsor, or employment data through relevant state agencies.

(3) Pursuant to actions of the Department of Administrative Services and Department of Revenue and the department’s actual receipt of 50 percent of Incremental Revenue under ORS 285B.630(2) to (6), the department will use it primarily:

(a) For loan forgiveness in OAR 123-097-3700; or

(b) To issue sponsor reimbursements under an executed TRA for amounts of Incremental Revenue that:

(A) Are received, up to but not exceeding 100 percent of Projects costs that the sponsor has incurred.

(B) Have accumulated, as further Project costs are incurred during or after that fiscal year, until all such costs are reimbursed.

Stat Auth: ORS 285A.075, 285B.627(10) & 285B.630(7)
Stats. Implemented: ORS 285B.625 - 285B.632
Hist.: OBDD 9-2014, f. 4-30-14, cert. ef. 5-1-14

123-097-4500

Sponsor’s Invoicing of Costs

For purposes of loan forgiveness or tax reimbursement, pursuant to a Loan Agreement or TRA:

(1) Not more than once a fiscal quarter, the sponsor shall file an invoice with the department for expenditures and accruals that clearly distinguishes current and previously identified costs, and is ordered according to distinct Project activities in OAR 123-097-2000(2).

(2) The invoice shall:

(a) Be accompanied by associated receipts, bills and other documents that the sponsor or department deem necessary to verify Project costs, and that are not redundant of previously supplied evidence;

(b) Account for costs only after the completion of significant milestones with the Project activity if not completion of the entire activity;

(c) Indicate the most recent status of each Project activity;

(d) Not include any cost that is not part of the Project under the Loan Agreement or TRA, regardless if funded with the loan or incurred for other efforts to prepare the RSIS; and

(e) Not track interest under the Loan Agreement for purposes of forgiveness.

(3) If applicable for OAR 123-097-2000(2)(c)(D), the sponsor shall maintain with its invoices a thorough accounting of how certain Projects costs are apportioned to the RSIS.

Stat Auth: ORS 285A.075 & 285B.627(7) & (10)
Stats. Implemented: ORS 285B.627 & 285B.632
Hist.: OBDD 9-2014, f. 4-30-14, cert. ef. 5-1-14

123-097-4800

Program Funds

With respect to the Oregon Industrial Site Readiness Program Fund established under ORS 285B.632, as administered by the department:

(1) Moneys credited to it, in addition to the 50 percent of Incremental Revenue received under ORS 285B.630, include but are not limited to:

(a) Amounts specially appropriated by the Legislative Assembly or transferred by the department, such as to capitalize the making of loans.

(b) Interest earned on outstanding balances.

(c) Repayments of principle pursuant to Loan Agreements, interest on that principle or amounts recovered in the event of default.

(d) The Incremental Revenue retained:

(A) In excess of total Project costs or of what may be otherwise reimbursed pursuant to a TRA.

(B) As forgiven and credited to loan principle, or in excess of what may be forgiven, pursuant to a Loan Agreement.

(e) Funding received from the federal government, other state agencies, local governments, or any other source, including but not limited to grants or gifts.

(2) The department may establish accounts within it for the payment of costs, reserves, operational expenses, revolving loan funds, and so forth, consistent with this division of administrative rules and ORS 285B.625 to 285B.632.

(3) The department may directly or indirectly grant, expend or pay out moneys to:

(a) Reimburse sponsors pursuant to TRAs;

(b) Make disbursements pursuant to Loan Agreements;

(c) Finance associated administrative costs of the department; or

(d) Pay other expenses necessary and appropriate to implement ORS 285B.625 to 285B.632.

(4) Expenditures in any fiscal year as described in subsections (3)(a) and (b) of this rule must be less than or equal to the cap in ORS 285B.627(8).

Stat Auth: ORS 285A.075, 285B.627(10) & 285B.630(7)
Stats. Implemented: ORS 285B.625 - 285B.632
Hist.: OBDD 9-2014, f. 4-30-14, cert. ef. 5-1-14

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