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The Oregon Administrative Rules contain OARs filed through September 15, 2014
 
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DEPARTMENT OF ENERGY

 

DIVISION 110

THE SMALL SCALE LOCAL ENERGY LOAN PROGRAM  

330-110-0005

Purpose, Statutory Authorization, Policy

(1) The purpose of these rules is to provide procedures for the Small Scale Local Energy Loan Program and standards and criteria for projects to be met by applicants. These rules are authorized by ORS 469.040, 470.080 and 470.140.

(2) It is the goal and policy of the Oregon Department of Energy and the Small Scale Local Energy Project Advisory Committee that these rules and the loan program:

(a) Encourage diversity in projects;

(b) Develop and maintain a loan portfolio that is reasonably balanced across market sectors and project and borrower types; and

(c) Fund energy projects that support the Department’s goal for energy efficiency, generation and security without regard to energy source.

Stat. Auth.: ORS 469 & 470.140
Stats. Implemented: ORS 470.050 - 470.310
Hist.: DOE 12-1980, f. & ef. 12-16-80; DOE 4-1984, f. & ef. 3-6-84; DOE 2-1986, f. & ef. 3-4-86; DOE 2-1998, f. & cert. ef. 9-30-98; DOE 7-2004, f. & cert. ef. 12-20-04; DOE 13-2012, f. & cert. ef. 12-20-12

330-110-0010

Definitions

As used in ORS Chapter 470 and in these rules, the following definitions apply:

(1) "Adequate security" means the pledge of real or personal property given to secure a loan against loss or credit enhancement, guaranty or other security of value authorized by ORS 470.170, given as assurance that the loan will be paid.

(2) "Alternative fuel project" means sub-sections (a) and (b):

(a) The purchase of a fleet of vehicles that are modified or acquired directly from a factory and that:

(A) Use an alternative fuel including electricity, gasohol with at least twenty percent denatured alcohol content, hydrogen, hythane, methane, methanol, natural gas, propane, biodiesel or any other fuel approved by the Director; and

(B) Produce lower exhaust emissions or are more energy efficient than those fueled by gasoline.

(b) A facility, including a fueling station, necessary to operate alternative fuel vehicles.

(3) "Alternative Fuel Vehicle Revolving Fund Program" means the loan program established by Oregon Laws 2013, chapter 774, sections 1 through 7 for public bodies defined in ORS 174.109 and federally recognized Indian tribes in Oregon.

(4) "Applicant" means a loan program applicant.

(5) “Application” means a completed loan application on a Department-approved form that contains all required information, is dated and signed by an authorized representative of the applicant, and is accompanied by the required documentation and the application and underwriting fees. The term “application” includes all documentation submitted in conjunction with a loan application, whether at the time of original submission of the loan application or later and all modifications of the application that was originally submitted.

(6) "Biomass" means plant and animal matter, but not fossil fuels.

(7) "Cogeneration" means the sequential production of electrical or mechanical energy and useful thermal energy from a primary source including but not limited to oil, natural gas or biomass. Cogeneration must qualify under the Small Scale Local Energy Loan Program Technical Requirements.

(8) "Committee" means the Small Scale Local Energy Project Advisory Committee.

(9) "Conservation measure" means a system, component of a system, mechanism or series of mechanisms, support service or combination thereof that:

(a) Reduces the use of energy at the project site;

(b) Directly avoids the loss of energy in the transmission of energy;

(c) Conserves energy used in transportation with the energy savings being substantially in Oregon;

(d) Is a cogeneration project; or

(e) Increases the production or efficiency of or extends operating life of a system or project otherwise described in OAR 330-110-0010, including but not limited to restarting a dormant project.

(10) "Conventional fuels" means purchased electricity or fossil fuels.

(11) "Creditworthy" means, in regard to an applicant, able to repay its debts as they become due, as evidenced by a satisfactory credit history, sufficient financial resources or other indication of financial strength as approved by the Department.

(12) “Delinquent account” means a loan that has not been paid in accordance with the terms of the underlying loan documents.

(13) "Demonstration project" means a project that showcases new or improved technologies or designs that promise cost-effective production or conservation of energy if adopted by the marketplace.

(14) "Department" means Oregon Department of Energy.

(15) "Director" means the Director of the Department or designee.

(16) "Energy need" means any of the energy demands forecasted by the Department under ORS 469.070 and the need to save energy to cut costs.

(17) “Financial feasibility” means that:

(a) The primary repayment source for the loan has been identified, the applicant is creditworthy and the project is financially viable; and

(b) Adequate security is offered to provide a secondary source of repayment.

(18) "Financial statement" means a report of a person’s financial operations or condition including but not limited to balance sheets, statements of financial condition, statements of financial position, income statements, statement of earnings, statements of revenues and expenses, statements of profit and loss, statements of operations, statements of retained income, statements of cash flows, statements of changes in financial position, pro forma statements, aging reports and any accounting reports, reviews, audits, tax returns or other financial information submitted as, or as a part of, a representation of financial condition in a Department approved format using Generally Accepted Accounting Principles (GAAP).

(19) "Fleet" means two or more vehicles used for commercial or governmental purposes primarily operated in Oregon.

(20) "Interim loan" means a disbursement of a program loan for the purpose of paying for pre-construction and other approved project costs prior to permanent funding.

(21) "Loan contract" means, in addition to the meaning set forth in ORS 470.050, the loan agreement and all other documentation required by the Director to make a loan or change its terms and conditions.

(22) "Local community or region" means one or more energy users in Oregon.

(23) "Municipal corporation" has the meaning assigned to that term by ORS 470.050.

(24) "Person" means a natural person or a validly existing entity that is duly organized under the laws of a state, including but not limited to a partnership.

(25) "Preference" means, in any choice between financially feasible projects or applicants, preference under ORS 470.080 and these rules.

(26) “Primary repayment source” means the business revenues produced by the borrower of a loan that is or will be used to pay the debt service on a loan.

(27) "Program" means the Small Scale Local Energy Loan Program.

(28) "Project" has the meaning given to “small scale local energy project” in ORS 470.050; including systems or devices that implement one or more conservation measures, use renewable resources to meet a local community or regional energy need in Oregon or are recycling or alternative fuel projects. The project may produce heat, electricity, mechanical action or alternative fuels. A project may also be an improvement that increases the production or efficiency of or extends the operating life of a system or device or project otherwise described in these rules, including but not limited to restarting a dormant project. A project also:

(a) Must be primarily in Oregon but can have a minor contiguous component in a neighboring state, or in the case of energy conservation the project can provide substantial benefits to Oregon. The components located in Oregon should exceed 70 percent of the portion of the project cost financed by the program;

(b) Can directly or indirectly conserve energy or enable the conservation of energy or use or enable the use of a renewable resource, by the applicant or another person, to produce energy, as, for example, power transmission or conditioning, energy storage or smart metering; and

(c) Can directly or indirectly reduce the amount of energy needed in the construction and operation of a facility, including the manufacture and transportation of construction materials, but the project or components must meet acceptable sustainability practices established in the Small Scale Local Energy Loan Program Technical Requirements.

(29) "Qualified" means, in regard to an applicant, able and eligible under the law to apply for a loan and enter into a loan contract.

(30) "Recycling project" means a facility or equipment that conserves energy by converting solid waste, as defined in ORS 459.005, into a new and usable product.

(31) "Renewable resource" means solar, wind, geothermal, biomass, waste heat or water resource.

(32) "Security value" means the value assigned by the Department, based upon an internal review or an appraisal by a qualified third party acceptable to the Department, to the project or security being offered as collateral for a loan.

(33) "Small business" has the meaning given in ORS 470.050.

(34) "Small Scale Local Energy Loan Program Technical Requirements" means the specific technical requirements of the Department for certain projects. An application will be subject to the Technical Requirements in effect on the date the Department receives a complete application.

(35) "Usable life" of a project means the number of years that a project can likely function without major repair or replacement.

(36) "Waste heat" means produced but unused heat that can be applied to an energy need.

Stat. Auth.: ORS 469 & 470.140
Stats. Implemented: ORS 470.050 - 470.310
Hist.: DOE 12-1980, f. & ef. 12-16-80; DOE 2-1981(Temp), f. & ef. 6-3-81; DOE 6-1982, f. & ef. 4-21-82; DOE 2-1983, f. & ef. 5-16-83; DOE 3-1983(Temp), f. & ef. 9-20-83; DOE 4-1984, f. & ef. 3-6-84; DOE 2-1986, f. & ef. 3-4-86; DOE 4-1988, f. & cert. ef. 7-26-88; DOE 1-1991(Temp), f. & cert. ef. 6-10-91; DOE 3-1991, f. & cert. ef. 12-3-91; DOE 1-1993, f. & cert. ef. 1-27-93; DOE 1-1994, f. & cert. ef. 4-1-94; DOE 2-1998, f. & cert. ef. 9-30-98; DOE 7-2004, f. & cert. ef. 12-20-04; DOE 1-2006, f. & cert. ef. 4-3-06; DOE 13-2012, f. & cert. ef. 12-20-12; DOE 4-2013, f. & cert. ef. 12-12-13

330-110-0012

Small Scale Local Energy Project Advisory Committee Appointments, Term Limits and Ex-officio Member

(1) Committee Appointment Process. As committee vacancies arise, the department will issue a committee member opening announcement.

(a) Applicants must complete an Oregon executive appointments interest form.

(b) The department may conduct in-person interviews, perform a background check and consult with current committee members.

(c) An applicant may be invited to attend a committee meeting.

(d) Department staff will submit a written recommendation to the Director.

(e) The director will consider the recommendation and make the final determination, in accordance with ORS 470.070(2).

(f) If selected, the director will issue a signed letter of appointment and the applicant must accept within ten days.

(2) Committee Member Term; Term Limit.

(a) A committee member serves for a four-year term.

(b) A member’s term starts on the date of appointment and until a successor is appointed and qualified.

(c) No committee member may serve more than two terms.

(3) Committee Renewal Process. Upon the recommendation of the committee, the director will review and may reappoint committee members for a second term.

(4) Committee Member Removal. The director may remove a committee member for any of the following:

(a) For any cause that is counter to the interests of the citizens of this state or the goals and mission of the committee, loan program or department.

(b) Upon missing three scheduled committee meetings in a 12-month period, the director may remove a committee member. The department schedules six committee meetings a year.

(5) Oregon State Treasurer Representative.

(a) The Oregon State Treasurer may appoint a representative to the committee to serve as an ex-officio member.

(b) The ex-officio member is not subject to the appointment process or term limits applicable to committee members.

(c) The ex-officio member may attend and participate in discussions at committee meetings. The ex-officio member is a non-voting member of the committee and may not be counted for establishing a quorum.

Stat. Auth.: ORS 469.040 & 470.140
Stats. Implemented: ORS 470.050 - 470.815
Hist.: DOE 2-2014, f. & cert. ef. 3-7-14

330-110-0015

Eligible Costs

Subject to these rules, a loan may be approved to pay for:

(1) The cost of buying, building and installing a project;

(2) Audit, study, commissioning and design costs; and

(3) Reserves, interest, staff training and site preparation costs.

Stat. Auth.: ORS 469 & 470.140
Stats. Implemented: ORS 470.080
Hist.: DOE 12-1980, f. & ef. 12-16-80; DOE 6-1982, f. & ef. 4-21-82; DOE 2-1983, f. & ef. 5-16-83; DOE 3-1983(Temp), f. & ef. 9-20-83; DOE 4-1984, f. & ef. 3-6-84; DOE 2-1986, f. & ef. 3-4-86; DOE 4-1988, f. & cert. ef. 7-26-88; DOE 1-1994, f. & cert. ef. 4-1-94; DOE 2-1998, f. & cert. ef. 9-30-98; DOE 7-2004, f. & cert. ef. 12-20-04; DOE 13-2012, f. & cert. ef. 12-20-12

330-110-0016

Ineligible Costs

(1) Loans funded from proceeds of tax-exempt bonds may not pay capital costs incurred prior to bond issuance unless the Department has adopted a reimbursement resolution declaring an intent to reimburse capital costs that are paid after or no more than 60 days prior to such resolution.

(2) Except as allowed in ORS 470.050, the proceeds of a loan may not be used to pay for parts of a project that are not consistent with energy production using renewable resources or energy conservation or that do not qualify as an alternative fuel project or recycling project, or do not meet a sustainability standard set out in the Small Scale Local Energy Loan Program Technical Requirements, unless the project is found by the Director to be a demonstration project.

(3) The proceeds of a loan may only be used to pay for projects or components of a project that have longer than a 12 month simple payback. For the purposes of this subsection, "component" means a part of a project that ordinarily saves or produces energy by itself and that costs more than ten percent of total, estimated project costs.

Stat. Auth.: ORS 469 & 470.140
Stats. Implemented: ORS 470.080
Hist.: DOE 1-1994, f. & cert. ef. 4-1-94; DOE 2-1998, f. & cert. ef. 9-30-98; DOE 7-2004, f. & cert. ef. 12-20-04; DOE 1-2006, f. & cert. ef. 4-3-06; DOE 13-2012, f. & cert. ef. 12-20-12

330-110-0025

Application

(1) The Department may provide an initial review and advise whether a project appears to qualify for loan financing by the program. The Department's advice, however, does not constitute a loan approval or any other binding commitment. The Department requires that an application be submitted and the required fees be paid if a potential applicant wishes to apply for a loan after an initial review.

(2) An application must be made on Department approved forms and in a manner set by the Department.

(3) The Department may request an applicant's social security number in accordance with provisions of the Privacy Act of 1974.

Stat. Auth.: ORS 469 & 470.140
Stats. Implemented: ORS 470.060 & 470.080
Hist.: DOE 12-1980, f. & ef. 12-16-80; DOE 6-1982, f. & ef. 4-21-82; DOE 2-1983, f. & ef. 5-16-83; DOE 4-1984, f. & ef. 3-6-84; DOE 2-1986, f. & ef. 3-4-86; DOE 2-1998, f. & cert. ef. 9-30-98; DOE 7-2004, f. & cert. ef. 12-20-04; DOE 13-2012, f. & cert. ef. 12-20-12

330-110-0030

Application Review Process

(1) In reviewing an application for financing by the program, the Department may require an applicant to submit further documentation to determine whether a loan should be made. If the Department fails to receive any items requested of the applicant within fourteen days after making its request in writing, the loan request may be denied. If the loan request is denied and the applicant still desires to make a loan application, the applicant must submit a new application and pay again any fees and charges applicable to loan applications that are described in OAR 330-110-0055.

(2) Application review and appeal must conform to ORS 470.080 to 470.100 and OAR 330-105.

(3) Loan approval or denial is communicated to an applicant in writing. A Department issued approval expires on the expiration date stated in the approval, or if no date is given, 60 days after the date of the approval. If the loan is not closed prior to the date the approval expires, an applicant must submit a new application and pay the fees and charges applicable to a new loan application. Any substantial change, including but not limited to, a change in financial position, project scope or the ownership of applicant, prior to the expiration of the approval, may result in the voiding of the loan approval and require submission of a new loan application.

(4) The Department may require a third party project and financial feasibility study in form and substance acceptable to the Department as a condition of approval on a loan. Applicant must pay the cost of a third party study.

(5) Findings under ORS 470.090 are for the benefit of the Department for lending purposes only. They do not endorse the project, its design or its parts. They offer no assurance of any kind to any person or entity, including the applicant, for any purpose.

Stat. Auth.: ORS 469 & 470.140
Stats. Implemented: ORS 470.080 - 470.100
Hist.: DOE 12-1980, f. & ef. 12-16-80; DOE 6-1982, f. & ef. 4-21-82; DOE 2-1983, f. & ef. 5-16-83; DOE 4-1984, f. & ef. 3-6-84; DOE 2-1986, f. & ef. 3-4-86; DOE 4-1988, f. & cert. ef. 7-26-88; DOE 2-1998, f. & cert. ef. 9-30-98; DOE 7-2004, f. & cert. ef. 12-20-04; DOE 13-2012, f. & cert. ef. 12-20-12

330-110-0035

Findings by the Director

(1) To approve an application for a loan, the Director must make the following findings:

(a) The project is consistent with preservation and enhancement of the environment. Factors may include whether the project saves conventional fuel, makes efficient use of a renewable resource, reduces greenhouse gas emissions or promotes sustainability.

(b) The plan for the project assures its timely completion, quality and adequate funding. Funding includes adequate working capital and reserves.

(c) The project meets the goals of the Department.

(d) The applicant has certified as part of the application that the applicant is in compliance with applicable state and local regulations. If requested, the applicant must provide compliance documentation. Failure to disclose any issues regarding compliance or any issues of non-compliance may result in denial of an application by the Department.

(e) Any other findings required by ORS 470.090.

(2) The Director may deny a loan to any applicant that restricts membership, sales or services on the basis of any of the protected classes listed in ORS 659A.003.

(3) The Director may deny a loan because other sources of funding are inadequate.

(4) The Director may limit the size or number of loans made by the program.

Stat. Auth.: ORS 469 & 470.140
Stats. Implemented: ORS 470.090
Hist.: DOE 12-1980, f. & ef. 12-16-80; DOE 6-1982, f. & ef. 4-21-82; DOE 2-1983, f. & ef. 5-16-83; DOE 3-1983(Temp), f. & ef. 9-20-83; DOE 4-1984, f. & ef. 3-6-84; DOE 1-1985, f. & ef. 1-2-85; DOE 2-1986, f. & ef. 3-4-86; DOE 4-1988, f. & cert. ef. 7-26-88; DOE 1-1994, f. & cert. ef. 4-1-94; DOE 2-1998, f. & cert. ef. 9-30-98; DOE 7-2004, f. & cert. ef. 12-20-04; DOE 13-2012, f. & cert. ef. 12-20-12

330-110-0036

Public Health, Safety, and Environmental Issues

(1) The policy of the Department is:

(a) To accept the findings of local, state and federal agencies that license or permit projects to be built or run; and

(b) To avoid influencing any of those agencies to approve or deny a license or a permit.

(2) Each applicant must provide information demonstrating that the proposed project will:

(a) Obtain each local, state and federal permit and license that applies to a project;

(b) Comply with the express terms and conditions of each permit and license;

(c) Comply with all state, federal and local laws and regulations that apply to the project; and

(d) Obtain a favorable land use decision from the city or county where the project will be built.

(3) The Department may issue a loan approval based on the applicant's representation or promise that each license and permit has been or will be obtained in a timely manner. If the applicant fails to obtain any required license or permit in a timely manner, the Department will revoke the loan or approval.

(4) The licensing or permitting agency must confirm in writing if any license or permit named in these rules is not required. Such confirmation is not needed for conservation measures for which the Department has already confirmed that such a license or permit in not required.

(5) Waterpower developers must comply with the following:

(a) A project on a navigable stream or connecting to a utility must obtain a license or exemption from the Federal Energy Regulatory Commission;

(b) A license or permit to use water for power must be obtained from the Water Resources Commission; and

(c) The requirements of the Northwest Power and Conservation Council's Columbia Basin Fish and Wildlife Program.

(6) Geothermal developers must obtain a geothermal well permit from the Department of Geology and Mineral Industries or a permit to use ground water from the Water Resources Commission.

(7) Biomass cogeneration developers must obtain an air contaminant discharge permit, a waste discharge permit and a solid waste disposal permit from the Department of Environmental Quality.

Stat. Auth.: ORS 469 & 470.140
Stats. Implemented: ORS 470.090 & 470.150
Hist.: DOE 1-1985, f. & ef. 1-2-85; DOE 2-1986, f. & ef. 3-4-86; DOE 4-1988, f. & cert. ef. 7-26-88; DOE 1-1994, f. & cert. ef. 4-1-94; DOE 2-1998, f. & cert. ef. 9-30-98; DOE 7-2004, f. & cert. ef. 12-20-04; DOE 13-2012, f. & cert. ef. 12-20-12

330-110-0040

Loan Limits, Security, and Conditions

(1) The Director may limit the term and amount of any loan or loan approval. The Director may deny any application or set such terms and conditions in regard to any loan or loan approval as needed to assure a sound loan or to protect the fiscal integrity of the program.

(2) A loan secured by real property must be secured by a first lien on such real property in favor of the State of Oregon and must not exceed eighty percent of the security value of such real property. The real property that is collateral for the loan must have been appraised by a licensed appraiser, county assessor or Department appraiser, at the discretion of the director, no longer than six months prior to the date of the loan approval. The Department will consider junior liens only on a case-by-case basis.

(3) If a loan to a municipal corporation will be repaid from project income, the security package for the loan may include the project income.

(4) A loan to a state agency, an eligible federal agency or a public corporation may be secured by project income, in addition to the facility or equipment that make up the project, by a lease purchase contract or by other income or security in accordance with ORS 470.170. State agencies, eligible federal agencies or public corporation borrowers must provide resolutions or other official action of borrower's governing body approving the loan and the other matters contemplated by the loan documents, and of all other documents evidencing any other necessary action by Applicant’s governing body.

(5) The Department generally requires an unconditional and absolute guaranty of the owners or the principal shareholder of the borrower or that of a person having sufficient resources to satisfy the borrower’s repayment obligation for the loan should the borrower default.

(6) The Director may consider savings in operation and maintenance costs in estimating the annual project cost savings. The Director may also, when calculating the estimated savings in fuel costs, consider reasonably expected increases in the cost of fuel.

(7) A project that primarily produces energy for sale must have:

(a) Secure sources of supply and contracts for the sale of output;

(b) Projected income, net of operating expenses and maintenance costs, of at least 125 percent of annual debt service for each year of the loan; and

(c) An identified secondary source of repayment apart from the project income.

(8) Unless the Director finds that mitigating financial factors warrant otherwise, a loan to a business for a project that saves or produces energy for use on site, is an alternative fuel project or is an energy-saving recycling project may be made only:

(a) Upon an identifiable and reasonable primary repayment source and the pledge of adequate security;

(b) For less than 80 percent of the security value of real property on which the Department has a first lien, the Department will consider junior liens on a case-by-case basis;

(c) To a business that has made a profit after taxes for at least the two years immediately preceding the loan application; and

(d) To a business that has a ratio of current assets to current liabilities of at least 1.75 to 1 and a ratio of total debt to owner's equity of no more than 2 to 1. The Director may exempt a business from the requirements of OAR 330-110-0040 if it demonstrates to the satisfaction of the Director that sound businesses of similar type and size do not normally meet these standards.

(9) Loan proceeds must be used for the costs of a small scale local energy project, with the following limitations:

(a) Cost of acquisition of the project site must not exceed ten percent of the loan amount.

(b) Start-up costs must not exceed three percent of the loan amount.

(c) Reserves must not exceed fifteen percent of the loan amount.

(10) The loan proceeds of an alternative fuel project may only be used for the following purposes:

(a) Incremental costs of the project that are beyond the reasonable estimated minimum costs to construct or install a similar project without alternative fuel features. Incremental costs do not include the cost of equipment or devices that, in standard industry practice, are used to dispense gasoline or, in the case of vehicles, equipment or devices that use gasoline and that also allow use of an alternative fuel without modification. Alternative fueling stations with underground fuel tanks do not qualify for funding as alternative fuel projects.

(b) In the case of vehicles, products and installation of such products approved by and meeting or exceeding the emission standards of the Department of Environmental Quality.

(11) No more than fifty percent of loan proceeds may be used to refinance existing debt authorized by ORS 470.050(27)(g) unless such debt is with the Department. The refinancing must result in a significant increase in the security value of the loan security.

Stat. Auth.: ORS 469 & 470.140
Stats. Implemented: ORS 470.080, 470.120, 470.150 - 470.155, 470.170 & 470.210
Hist.: DOE 12-1980, f. & ef. 12-16-80; DOE 6-1982, f. & ef. 4-21-82; DOE 2-1983, f. & ef. 5-16-83; DOE 3-1983(Temp), f. & ef. 9-20-83; DOE 4-1984, f. & ef. 3-6-84; DOE 2-1986, f. & ef. 3-4-86; DOE 4-1988, f. & cert. ef. 7-26-88; DOE 1-1993, f. & cert. ef. 1-27-93; DOE 1-1994, f. & cert. ef. 4-1-94; DOE 2-1998, f. & cert. ef. 9-30-98; DOE 7-2004, f. & cert. ef. 12-20-04; DOE 13-2012, f. & cert. ef. 12-20-12; DOE 2-2013(Temp), f. & cert. ef. 6-17-13 thru 12-13-13; DOE 4-2013, f. & cert. ef. 12-12-13

330-110-0042

Bond Refunding

(1) The Department must pursue opportunities to refund bonds to reduce interest sums paid by the Department.

(a) When the Department refunds a bond with tax-exempt bonds, the Department must share, on an equitable basis, the savings from any refunding with the affected borrowers in an amount consistent with a finding by the Director that the sinking fund has, and will continue to have, sufficient funds to make payments required under ORS 470.300(1). Affected borrowers are those whose loans were made with the proceeds of the refunded bonds.

(b) For the purposes of OAR 330-110-0042(1), savings from a refunding are shared on an equitable basis if the Department receives half the savings, and the affected borrowers receive or split half the savings, net of costs, from a bond refunding. When the Internal Revenue Code or other law limits the amount of refunding savings the Department may retain or provide to the affected borrowers, the Department may receive less or more than half the savings, and the affected borrowers will receive the remainder. If multiple loans were funded from the proceeds of the refunded bonds, the affected borrowers will share the savings in proportion with their respective shares of the proceeds of the refunded bonds that were used to make their loans, adjusted for the remaining term to maturity of their loans.

(2) Savings from a bond refunding accrue over the remaining term of the refunded bonds. The Department will share these savings with affected borrowers by reducing the amount of their loan payments over the remaining term of the loans. If the accumulated savings over the remaining term of a loan is less than $15,000 or if the Director finds that it is in the interest of both the Department and the borrowers, the Department may reduce the principal amount of the loan by the net present value of the savings, calculated using a discount rate of the maximum arbitrage yield of the refunding bonds as defined in Section 148 of the Internal Revenue Code.

(3) The Department must not refund tax-exempt bonds with taxable bonds, unless the Department is able to share the savings associated with such a refunding with the borrowers whose loans are linked to such bonds.

(4) At least 120 days before the date on which the Department intends to issue refunding bonds, the Department must notify each borrower whose loan was made from the proceeds of the bonds being refunded and must offer the borrower the opportunity to prepay the borrower's loan. The Department will request that the borrower notify the Department of its intent to prepay their loan within 60 days of the date of the notification or risk losing the opportunity to prepay.

[Publications: Publications referenced are available from the agency.]

Stat. Auth.: ORS 469 & 470.140
Stats. Implemented: ORS 470.270
Hist.: DOE 2-1998, f. & cert. ef. 9-30-98; DOE 7-2004, f. & cert. ef. 12-20-04; DOE 1-2006, f. & cert. ef. 4-3-06; DOE 13-2012, f. & cert. ef. 12-20-12

330-110-0045

Waiver, Authority of Administrator

The Director:

(1) May, in writing, waive any of these rules. The waiver must serve the aims of the program, not cause financial damage to the program, and not conflict with ORS chapter 470.

(2) May contract with regulated financial institutions, state or federal agencies or others to provide services, subsidies or grants to the program.

(3) May take such steps as are needed to recover loan funds and prevent their misuse, or to prevent a project from being diverted from its purposes.

(4) May delegate, in writing, authority to approve, deny or amend loans and to execute bond and loan documents. A partial release of lien may be granted by the Director upon the written request of a borrower if the security value of the remaining security is adequate to secure the loan and meet the security requirements of OAR 330-110-0040. The Director will consider the creditworthiness and repayment history of the borrower in considering such a request.

(5) May contract with a person to operate a project in the event of any default that results in the Department taking and running the project.

(6) May settle, modify or release any person from liability for a loan so long as such action does not damage the program.

(7) May take any action allowed by law to comply with federal codes and rules on bonding or to assure the payment of program bonds.

Stat. Auth.: ORS 469 & 470.140
Stats. Implemented: ORS 470.080 & 470.150
Hist.: DOE 12-1980, f. & ef. 12-16-80; DOE 6-1982, f. & ef. 4-21-82; DOE 2-1983, f. & ef. 5-16-83; DOE 3-1983(Temp), f. & ef. 9-20-83; DOE 4-1984, f. & ef. 3-6-84; DOE 2-1986, f. & ef. 3-4-86; DOE 4-1988, f. & cert. ef. 7-26-88; DOE 2-1998, f. & cert. ef. 9-30-98; DOE 7-2004, f. & cert. ef. 12-20-04; DOE 13-2012, f. & cert. ef. 12-20-12

330-110-0046

Loan Amendments

The Department may amend the terms of a loan in accordance with OAR 330-110-0046.

(1) Amendments may include but are not limited to amending the interest rate or payment amount in accordance with a bond refunding, changing payment dates or extending maturity dates.

(2) A borrower must request a loan amendment in writing. The request must include a detailed explanation of the amendment requested with information and documentation by the borrower that demonstrates the need for the amendment.

(3) When considering a request for a loan amendment, the Department may require the borrower to submit information it deems necessary to evaluate the request, such as financial statements, collateral information and valuation.

(4) The Department will only approve a loan amendment request if the amendment results in a significant increase in the security value to the loan security or significantly improves the borrower’s ability to meet its obligations in regard to the loan.

(5) The borrower will be notified in writing whether or not the Department will agree to the requested loan amendment.

(6) Approved loan amendments are subject to a fee of $300 plus additional charges for items listed in OAR 330-110-0055. Such charges will be estimated or itemized for the borrower.

Stat. Auth.: ORS 469.040 & 470.080, 470.140
Stats. Implemented: ORS 470.050 & 470.815
Hist.: DOE 13-2012, f. & cert. ef. 12-20-12

330-110-0047

Loan Forbearance

The Department may consider forbearance on a loan, but will only consider forbearance if the borrower is current on its loan payments and is in compliance with the terms of its loan documents.

(1) If a borrower is requesting forbearance for its loan, this loan must be current and in good standing, and have no late charges outstanding, up to and including the date the forbearance documents are signed.

(2) A borrower must request forbearance in writing. The request must include a detailed explanation of the reason for the forbearance request including information and documentation that demonstrates the need for the forbearance.

(3) When considering a request for forbearance, the Department may require that the borrower submit information it deems necessary to evaluate the request, such as financial statements, collateral information and valuation.

(4) The borrower will, within thirty days of its request, be notified in writing whether or not the Department agrees to the loan forbearance request.

(5) The Department will only approve a forbearance request from a borrower who has submitted a written plan demonstrating that the temporary suspension or reduction of loan payments will significantly increase the likelihood of full loan repayment.

(6) The Department may extend a forbearance agreement beyond the initial forbearance period, if the circumstances, in the Department’s sole discretion, justify such an extension.

(7) A borrower requesting forbearance must pay the Department a loan servicing fee that is calculated on the basis of the borrower’s payment amount and loan balance. Additional charges may be made for items listed in OAR 330-110-0055(4). Such charges will be estimated or itemized for the borrower before they are incurred.

(8) Approval of a forbearance request will not reduce the borrower’s liability to the Department for the loan.

Stat. Auth.: ORS 469.040 & 470.080, 470.140
Stats. Implemented: ORS 470.050 & 470.815
Hist.: DOE 13-2012, f. & cert. ef. 12-20-12

330-110-0048

Delinquent Accounts

Delinquent loans will be managed in accordance with ORS 470.170 and subject to the Department’s collection procedures, including but not limited to: (a) written demand, (b) collection of late fees, (c) acceleration of the amount due, (d) action against a guarantor or (e) any other legal remedy available to the Department.

Stat. Auth.: ORS 469.040 & 470.080, 470.140
Stats. Implemented: ORS 470.050 & 470.815
Hist.: DOE 13-2012, f. & cert. ef. 12-20-12

330-110-0055

Fees and Charges

Pursuant to ORS 470.060, an applicant will pay the Department for costs to review, process and service a request for a loan. Applicants will pay the following fees and charges:

(1) A non-refundable application fee as fixed by ORS 470.060. "Application," as used here, includes a request to assume or transfer or increase an existing loan but does not include a request for an interim loan made in an application for a permanent loan for a project. If the Department consults with an applicant on a loan before an application is submitted the applicant must pay an application fee after the first hour of consultation. The fee will be applied to the application fee for an application that is submitted within thirty days of the consultation. If an application is submitted more than thirty days after the consultation, the applicant must pay a new application fee.

(2) A non-refundable underwriting fee of $500 or one-half of one percent of the loan request amount, whichever is greater, but not to exceed $5,000.

(3) A loan fee of between one and four percent of the loan amount based upon the Director’s assessment of the risk profile of the project, payable at loan closing.

(4) Charges for items including, but not limited to credit reports, expert advice, legal fees, construction inspections, disbursement fees, loan servicing fees and appraisals, unless charges incurred also benefit another application, in which case the charges will be divided equitably. Such charges will be estimated or itemized for the applicant before they are incurred.

(5) A fee of $500 for each request to release or modify security. Additional charges may be made for items listed in OAR 330-110-0055(4). Such charges will be estimated or itemized for the applicant before they are incurred.

(6) The interest rate set in a binding loan commitment may not be increased without the applicant's consent except as provided in the loan commitment or the loan documents. The interest rate for any project proposed by an eligible federal agency must be set in accordance with ORS 470.150(2). Loan contracts may provide for rates to be adjusted upon issuance of the bonds whose proceeds fund the loans.

(7) The Department may offer a fee that combines the fees and charges in OAR 330-110-0055(1) through (3) and that is equal to or less than the sum of the fees and charges in OAR 330-110-0055(1) through (3). If offered, a combined fee will apply to any applicant receiving similar loan terms.

Stat. Auth.: ORS 469 & 470.140
Stats. Implemented: ORS 470.060 & 470.150
Hist.: DOE 6-1982, f. & ef. 4-21-82; DOE 2-1983, f. & ef. 5-16-83; DOE 4-1984, f. & ef. 3-6-84; DOE 2-1986, f. & ef. 3-4-86; DOE 4-1988, f. & cert. ef. 7-26-88; DOE 1-1994, f. & cert. ef. 4-1-94; DOE 2-1998, f. & cert. ef. 9-30-98; DOE 7-2004, f. & cert. ef. 12-20-04; DOE 1-2006, f. & cert. ef. 4-3-06; DOE 13-2012, f. & cert. ef. 12-20-12

330-110-0060

Alternative Fuel Vehicle Revolving Fund Program; Loan Terms

(1) The department will use the moneys from the Alternative Fuel Vehicle Revolving Fund to provide loans to public bodies defined in ORS 174.109 and federally recognized Indian tribes in Oregon and may use the moneys to pay for the department’s expenses in administering the Alternative Fuel Vehicle Revolving Fund, Alternative Fuel Vehicle Revolving Fund Program and related costs.

(2) The loans must be used to:

(a) Assist in the purchase of new alternative fuel vehicles by providing funding for the incremental cost of purchasing alternative fuel vehicles that exceeds the cost of purchasing vehicles that are not alternative fuel vehicles; or

(b) Convert or modify existing vehicles that use gasoline or diesel to alternative fuel vehicles. A conversion or modification of a motor vehicle must include at least one eligible alternative fuel as described in OAR 330-110-0060(3).

(3) Alternative fuel vehicle means:

(a) A motor vehicle, as defined in ORS 801.360;

(b) That is manufactured or modified to use an alternative fuel, including but not limited to electricity, biofuel, gasohol with at least 20 percent denatured alcohol content, hydrogen, hythane, methane, methanol, natural gas, propane or any other fuel approved by the department;

(c) That produces lower exhaust emissions or is more energy efficient than equivalent equipment fueled by gasoline or diesel;

(d) Registered in Oregon in accordance with ORS 803; and

(e) If a conversion or modification, new equipment is installed by a qualified technician that is compliant with Environmental Protection Agency or California Air Resources Board standards.

(4) The terms and interest rate for these loans will be established by the department to recover the administrative cost of this loan program and to maintain a perpetual source of funding for the Alternative Fuel Vehicle Revolving Fund Program. A loan must be fully amortized not later than six years after the purchase of the new alternative fuel vehicle being financed by the loan or the conversion of a vehicle that uses gasoline or diesel to an alternative fuel vehicle.

(5) The department will convene a review committee to review and prioritize loans, as needed.

(6) The department may list the evaluation criteria for prioritizing loan applications. The department will give priority to loans for conversions or modifications. The additional criteria the department may consider for each vehicle covered by the application include, but are not limited to:

(a) Fuel displacement capacity,

(b) Geographical area or local economic conditions of the home base,

(c) Accelerated repayment schedule,

(d) Age of the vehicle,

(e) Estimated annual mileage,

(f) Gross weight of the vehicle, and

(g) Emissions.

(7) A loan application must be made on department approved forms and in a manner set by the department. An applicant must designate the Alternative Fuel Vehicle Revolving Fund Program in the purpose section of the application. For each vehicle covered by the application, the application must include information needed for prioritization in OAR 330-110-0060(6) plus the following information:

(a) Vehicle Identification Number;

(b) Vehicle make, model, year and description;

(c) Current odometer reading;

(d) Name of titled owner;

(e) Gross vehicle weight;

(f) Fuel economy;

(g) Estimated annual mileage;

(h) Borrowing authority;

(i) Loan repayment information, identifying the dedicated source of revenue for repayment purposes; and

(j) Any other information requested by the department.

(8) Submitting a loan application does not guarantee the department will provide a loan to the applicant.

(9) The proceeds of loans made from the Alternative Fuel Vehicle Revolving Fund may be used for purchases or conversions as described in OAR 330-110-0060(2) no more than 60 days prior to the department receiving the loan application.

(10) No one borrower may obtain a loan for greater than 30 percent of the total available, uncommitted funds in the Alternative Fuel Vehicle Revolving Fund. The department may adjust the allowed percentage for a borrower based on program usage. The department may also set a maximum aggregate amount of all loans outstanding that a single public entity or tribe may have under the Alternative Fuel Vehicle Revolving Fund.

(11) Loans made from the Alternative Fuel Vehicle Revolving Fund will be subject to the department’s underwriting standards and the requirements in OAR Chapter 330, division 110. Loans require final approval by the Director.

(12) An Alternative Fuel Vehicle Revolving Fund borrower must report, on an annual basis for the term of the loan, the following:

(a) Miles driven,

(b) Amount of fuel consumed, and

(c) Other data as described in the loan agreement.

Stat. Auth.: ORS 469.040 & OL 2013, ch. 774, sec. 4, 7
Stats. Implemented: OL 2013, ch. 774, sec. 1 - 7
Hist.: DOE 4-2013, f. & cert. ef. 12-12-13

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