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OREGON BUSINESS DEVELOPMENT DEPARTMENT
DIVISION 135
BROWNFIELDS REDEVELOPMENT LOAN FUND
123-135-0000
Purpose
The purpose of these rules is to implement the Brownfields Redevelopment Fund created in 1997 through Chapter 738 Oregon Laws 1997 and amended by Chapter 96 Oregon Laws 2001. The purpose of the Brownfields Redevelopment Fund is to enhance the availability of resources through program development, grant proposals and other appropriate methods necessary to determine and facilitate the funding of environmental actions on properties that are brownfields.
Stat. Auth.: ORS 285A.075
Stats. Implemented: ORS 285A.185 & 285A.188
Hist.: EDD 2-2001, f. & cert. ef. 2-1-01; EDD 8-2001(Temp), f. & cert. ef. 11-15-01 thru 5-14-02; EDD 10-2002(Temp), f. & cert. ef. 5-15-02 thru 11-11-02; Administrative correction 11-29-02; EDD 18-2002, f. & cert. ef. 12-10-02; OBDD 7-2010, f. 3-30-10, cert. ef. 4-1-10
123-135-0010
Policy
It is the policy of the Oregon Business Development Department to promote sustainability and assist rural or distressed communities with local development priorities. Facilitating environmental cleanup consistent with a polluter-pays principle and the redevelopment of brownfields furthers this policy. The benefits of redeveloping brownfields include: promoting economic development; enabling efficient land use; minimizing the construction of new service infrastructure; facilitating the resolution of environmental justice issues; and protecting environmental and human health.
Stat. Auth.: ORS 285A.075
Stats. Implemented: ORS 285A.185 & 285A.188
Hist.: EDD 2-2001, f. & cert. ef. 2-1-01; EDD 8-2001(Temp), f. & cert. ef. 11-15-01 thru 5-14-02; EDD 10-2002(Temp), f. & cert. ef. 5-15-02 thru 11-11-02; Administrative correction 11-29-02; EDD 18-2002, f. & cert. ef. 12-10-02; OBDD 7-2010, f. 3-30-10, cert. ef. 4-1-10
123-135-0020
Definitions
For the purposes of these rules additional definitions may be found in Procedural Rules, OAR 123-001. As used in this division, the following terms shall have the following meaning unless otherwise indicated:
(1) "Bridge Loan" means a loan that will be repaid in full at the end of a short-term, twelve (12) to twenty four (24) months in length as determined at time of award or upon request within one year of award, following loan closing;
(2) "Brownfield" means real property where expansion or redevelopment is complicated by actual or perceived environmental contamination as defined in ORS 285A.185(1);
(3) "Capacity Building" involves conducting necessary studies that support the evaluation of a site or sites and incorporates cleanup activities for a site or sites with or without an identified redevelopment use but within zoning parameters to meet the buildable lands needs of a municipality;
(4) "Collateral" means property subject to a security interest or security agreement as defined in ORS 79.1050;
(5) "Contribution" means cash, a reduction in land sale price, a donation of real property or personal services of value; or some other like act that offsets the benefit of receiving sums from the Fund that are conveyed on a recipient or site owner who is a potentially responsible party for a release of a hazardous substance or is potentially liable for the cost of cleanup at the site according to ORS 465.255;
(6) "Environmental Action" means activities undertaken to:
(a) Determine if a release has occurred, if the release, or potential release, poses a significant threat to human health or the environment, or if additional remedial actions may be required at the site;
(b) Conduct a remedial investigation and a feasibility study;
(c) Plan for remedial action or removal action; or
(d) Conduct a remedial action or removal action at a site.
(7) "Environmental Insurance" means a specific form of casualty insurance based on industry custom standards. Policies such as, but not limited to, cleanup cost caps, secured creditor on impaired property, or pollution legal liability are examples of environmental insurance;
(8) "Environmental Justice" means community based issues, concerns, or problems resulting from the disparate effects caused by the placement and/or proximity of facilities that negatively impact minority or low-income populations;
(9) "Environmental Service Professional" means an entity that has the necessary experience, capacity, expertise, or is otherwise certified to conduct environmental actions;
(10) "Facility" means any building, structure, installation, equipment, pipe or pipeline including any pipe into a sewer or publicly owned treatment works, well, pit, pond, lagoon, impoundment, ditch, landfill, storage container, above ground tank, underground storage tank, motor vehicle, rolling stock, aircraft, or any site or area where a hazardous substance has been deposited, stored, disposed of, or placed, or otherwise come to be located and where a release has occurred or where there is a threat of a release, but does not include any consumer product in consumer use or any vessel. Facility has the meaning given in ORS 465.200;
(11) "Fund" means the Brownfields Redevelopment Fund;
(12) "Hazardous Substance" has the meaning given in ORS 465.200;
(13) "Institutional Controls" has the meaning given in ORS 465.315 and OAR 340-122-0115(32);
(14) "Municipality" means an Oregon city, county, the Port of Portland created by ORS 778.010, a county service district organized under ORS Chapter 451, a district as defined in 198.010, a tribal council of a federally recognized Indian tribe in Oregon, an airport district organized under ORS 838, or any other municipal corporation or quasi-municipal corporation.
(15) "Non-Profit" means an organization certified under sections 501(c)(2) through (4) and (6) through (8) and (10) of the Internal Revenue Code;
(16) "Person" means any individual, association of individuals, company, joint venture, partnership, or corporation;
(17) "Project" and "Project Description" means the resulting combination of the site, the proposed activities to be performed, the proposed or likely redevelopment use, and any other information stated in the Fund application;
(18) "Prospective Purchaser Program" refers to ORS 465.327 and associated administrative rules;
(19) "Release" (as in release of a hazardous substance) has the meaning given in ORS 465.200;
(20) "Scope of Work" means a detailed plan to perform in part or in whole an environmental action. Scopes of work shall be drafted by an environmental service professional;
(21) "Site" means the parcel or parcels of real property on which the funded activities will be performed;
(22) "Site Characterization" means determining and delineating the boundaries of the plume(s) of contamination and/or determining the status of the contamination such as whether it is migrating or crossing from one media to another, such as from soil to water, at the site. This review provides a level of detail comparable to a "preliminary assessment" (PA) as described in OAR 340-122-0072 and may be comparable to a "Phase II Environmental Site Assessment" under ASTM Standard E 1903;
(23) "Site Investigation" means a historic use investigation of the site involving, but not limited to, the analysis of aerial photos, public and private records, personal interviews, and other documents and data sources to determine the likelihood of a release of a hazardous substance at the site or facility. This review provides a level of detail comparable to a "Phase I" review under ASTM Standards E1527 and 1528 and is often a desktop review without any sampling;
(24) "Site Sampling" means systematically obtaining and analyzing representative samples from the site of relevant media such as soil and water to determine the presence of and/or the concentration of the contamination and/or identify the specific substances or compounds comprising the contamination. Sampling is a critical component of the "preliminary assessment" (PA) conducted under OAR 340-122-0072 or the ASTM "Phase II" under E-1903;
(25) "Term Loan" means a loan to be paid over a period of years, usually ten (10) to fifteen (15), with a rate of interest;
(26) "Voluntary Cleanup Program" relates to ORS 465.325 and associated administrative rules.
Stat. Auth.: ORS 285A.075
Stats. Implemented: ORS 285A.185 & 285A.188
Hist.: EDD 2-2001, f. & cert. ef. 2-1-01; EDD 8-2001(Temp), f. & cert. ef. 11-15-01 thru 5-14-02; EDD 10-2002(Temp), f. & cert. ef. 5-15-02 thru 11-11-02; Administrative correction 11-29-02; EDD 18-2002, f. & cert. ef. 12-10-02; EDD 3-2007(Temp), f. & cert. ef. 8-10-07 thru 2-5-08; Administrative correction 2-22-08; EDD 18-2008, f. & cert. ef. 6-4-08; OBDD 7-2010, f. 3-30-10, cert. ef. 4-1-10
123-135-0030
Applicant Eligibility
(1) Any person, non-profit, or municipality is eligible to make application to the Department for assistance from the Fund as long as they are not subject to exclusion by ORS 285A.188(3)(a).
(2) Eligibility under OAR 123-135-0030 shall also be determined based on the status of compliance with enforcement actions against the applicant by the Oregon Department of Environmental Quality.
(3) If the applicant is not the land owner and the site is owned by a person that is excluded by OAR 123-135-0030(1), the application will not be accepted unless the applicant provides documentation adequately demonstrating how the funded activities will facilitate a transfer in ownership of the site to a person not subject to the exclusion.
(4) An applicant who is a responsible party for a release of a hazardous substance or is liable for the cost of cleanup at the project site according to ORS 465.255, must provide some form of contribution to the project to be eligible.
(5) An applicant that makes willful misrepresentations regarding applicant eligibility on a Fund application may be subject to the remedies described in OAR 123-135-0090.
(6) Applicant must have the authority and ability to enter into a contract with the Department.
Stat. Auth.: ORS 285A.075
Stats. Implemented: ORS 285A.185 & 285A.188
Hist.: EDD 2-2001, f. & cert. ef. 2-1-01; EDD 8-2001(Temp), f. & cert. ef. 11-15-01 thru 5-14-02; EDD 10-2002(Temp), f. & cert. ef. 5-15-02 thru 11-11-02; Administrative correction 11-29-02; EDD 18-2002, f. & cert. ef. 12-10-02; OBDD 7-2010, f. 3-30-10, cert. ef. 4-1-10
123-135-0040
Project Eligibility
(1) Projects may contain non-residential underground storage tanks. Superfund sites on the National Priorities List are not eligible. Reimbursable project activities include, but are not limited to:
(a) Site investigation;
(b) Site sampling;
(c) Site characterization;
(d) Review, compilation and analysis of study data into a report;
(e) Feasibility studies;
(f) Plans for remedial action or removal;
(g) Conducting of a remedial action or removal at a site; or
(h) Regulatory oversight fees.
(2) Projects on sites that contain or are proposed to contain only privately owned single family residential dwelling(s) or privately owned multi-family dwelling(s) are not eligible for Fund assistance unless substantial public benefit can be demonstrated.
(3) Projects on sites that contain or are proposed to contain mixed use development such as a structure or structures that contain combined commercial and residential uses are eligible if:
(a) A written endorsement for the project from the local jurisdiction is included with the application;
(b) The project will provide a substantial public benefit; or
(c) The project is part of a downtown or mixed use center redevelopment.
(4) The Department will determine if a project will have substantial public benefit.
[Publications: Publications referenced are available from the agency.]
Stat. Auth.: ORS 285A.075
Stats. Implemented: ORS 285A.185 & 285A.188
Hist.: EDD 2-2001, f. & cert. ef. 2-1-01; EDD 8-2001(Temp), f. & cert. ef. 11-15-01 thru 5-14-02; EDD 10-2002(Temp), f. & cert. ef. 5-15-02 thru 11-11-02; Administrative correction 11-29-02; EDD 18-2002, f. & cert. ef. 12-10-02; EDD 8-2006, f. 10-30-06, cert. ef. 10-31-06; OBDD 7-2010, f. 3-30-10, cert. ef. 4-1-10
123-135-0050
Application Requirements
(1) Applications that include capacity building, site sampling and/or site characterization must discuss in their project description how the funded activities will contribute or lead to cleanup and/or redevelopment of the site.
(2) Applications that include a site characterization must discuss in the project description how the funded activities will contribute or lead to a remediation plan or a No Further Action Determination by the Oregon Department of Environmental Quality.
(3) Applications that include a remedial or removal action or plan must identify the proposed redevelopment use in the project description and must provide documentation that demonstrates how the proposed redevelopment use is attainable.
(4) Applications that include a remedial or removal action or plan must discuss in the application how the plan or action will comply with state cleanup law and will contribute to the proposed redevelopment. The Department may ask the applicant to provide documentation that demonstrates how compliance or how progress towards the proposed redevelopment will be achieved.
(5) Applications that include a remedial or removal action but do not identify a redevelopment use as described in OAR 123-135-0050(4) are eligible if the project is for capacity building. Written endorsement for the capacity building project must be obtained from the local jurisdiction and be included in the application if the applicant is not a municipality.
(6) The sum of funding requested in the Fund application must be consistent with the scope and scale of work in the project description compared with an industry custom standard. If the amount requested is inconsistent with the scope and scale of work in the project description, the Department may work with the Applicant and Oregon Department of Environmental Quality to adjust the amount of the award or the scope and scale of work in the project description.
(7) If OAR 123-135-0030(4) or (5) applies, the necessary information regarding property transfer and/or contribution must also be included in the application.
Stat. Auth.: ORS 285A.075
Stats. Implemented: ORS 285A.185 & 285A.188
Hist.: EDD 2-2001, f. & cert. ef. 2-1-01; EDD 8-2001(Temp), f. & cert. ef. 11-15-01 thru 5-14-02; EDD 10-2002(Temp), f. & cert. ef. 5-15-02 thru 11-11-02; Administrative correction 11-29-02; EDD 18-2002, f. & cert. ef. 12-10-02; OBDD 7-2010, f. 3-30-10, cert. ef. 4-1-10
123-135-0065
Application Considerations and Processing
(1) Applications may be submitted to the Department at any time. The Department shall not process an incomplete Fund application. Applications are complete when all relevant requirements of this Division are met.
(2) The Department can waive application requirements in order to make an application completion determination if it is demonstrated that such a waiver would serve to further the goals and objectives of the Fund and would not violate any statutory requirements.
(3) The Department may request additional information about the project that is not listed in this division if necessary to facilitate application processing.
(4) When evaluating an application, the Department shall consider the following:
(a) The extent to which real or perceived contamination prevents the property from being fully utilized;
(b) The need for providing public assistance, after considering the difficulty of obtaining financing from other sources or of obtaining financing at reasonable rates and terms;
(c) The degree to which redevelopment of the property provides opportunity for achieving protection of human health or the environment by reducing or eliminating the contamination of the property and for contributing to the economic health and diversity of the area;
(d) The probability of the success of the intended use or the degree to which redevelopment of the property provides a public purpose following remediation of the property;
(e) Compliance with the land use plan of the local government with jurisdiction over the property;
(f) Endorsement from the local government with jurisdiction over the property.
(5) In the event of a shortage of funds, priority will be given to projects that provide significant economic benefit such as the creation of manufacturing or traded sector jobs and the Department may, at its discretion, consider other factors that demonstrate substantial public benefit.
(6) No more than sixty percent (60%) of the total amount of the Fund in any biennium shall be awarded to persons who are liable with respect to the site under ORS 465.255. The sixty percent (60%) limitation will be calculated at the beginning of each biennium and will be applied to the total, non-obligated, funds available in the Fund. Only awards to recipients that caused or contributed to the contamination at a site shall be included in the sixty percent (60%) calculation.
(7) Department approval of an application may contain conditions which will become part of the funding agreement.
(8) The Department will conduct a financial review on complete applications in accordance with prudent lending practices. Conditions of an loan award such as requiring collateral or other security; requiring a co-signer or guarantor; or obtaining an environmental insurance policy may be required in order to provide additional securities to mitigate credit deficiencies.
(9) The Department may request additional information from the applicant to facilitate a funding decision.
Stat. Auth.: ORS 285A.075
Stats. Implemented: ORS 285A.185 & 285A.188
Hist.: OBDD 7-2010, f. 3-30-10, cert. ef. 4-1-10
123-135-0080
Loan Agreement Conditions
(1) Loans do not require match. Applicants 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, recording or filing fees.
(2) The Department shall set the interest rate for municipal and non-municipal loan recipients at the time of award based on subsidy need, credit risk, and other appropriate considerations.
(3) Interest accrual, repayment and disbursement schedules, and other necessary conditions shall be stated in the loan agreement.
(4) Bridge loans shall have a maximum term of one (1) year from the beginning of loan disbursement unless the loan recipient requests an extension.
(a) Upon receipt of a request for extension, the maximum term of the extension shall not exceed one (1) additional year. If a bridge loan is not repaid within the approved period, a rate of interest may be applied from the date of first disbursement.
(b) A bridge loan recipient may be converted to a term loan. If a loan is converted, a rate of interest shall be applied from the date of first disbursement.
(5) The Department will set terms of repayment with consideration to the applicant’s ability to repay, credit worthiness, economic benefit of the project, and use of proceeds as defined in the project. The maximum term of a loan shall not exceed 20 years from the date of loan closing.
(6) A term loan may convert to a bridge loan with the approval of the Department as long as the maximum bridge loan term of two (2) years has not passed from the date of loan closing.
(7) If the project includes other funding in the form of loan(s) obtained from a financial institution, the Department may subordinate the Fund loan to the financial institution loan(s) if appropriate.
(8) The Department has the discretion to establish loan terms that differ from those enumerated in OAR chapter 123, division 135 as long as it furthers the goals and objectives of the program.
(9) For loan funded projects, the total loan amount shall not exceed the final total project cost.
[Publications: Publications referenced are available from the agency.]
Stat. Auth.: ORS 285A.075
Stats. Implemented: ORS 285A.185 & 285A.188
Hist.: EDD 2-2001, f. & cert. ef. 2-1-01; EDD 8-2001(Temp), f. & cert. ef. 11-15-01 thru 5-14-02; EDD 10-2002(Temp), f. & cert. ef. 5-15-02 thru 11-11-02; Administrative correction 11-29-02; EDD 18-2002, f. & cert. ef. 12-10-02; OBDD 7-2010, f. 3-30-10, cert. ef. 4-1-10
123-135-0087
Grant Contract Conditions
(1) Municipal and eligible non-profit organization applicants may be eligible for grants. Determination of grant eligibility will be made by the Department at the time of award and may be based on subsidy need, credit risk, economic benefit, and other appropriate considerations. The Department has the discretion to impose conditions on the grant. Conditions shall be part of the grant contract, and if appropriate, the Department may require the recipient to demonstrate or document how the conditions have or will be met before funds are disbursed in whole or in part.
(2) All grant awards require some level of match. The level of match required will be determined based upon the liability considerations associated with the applicant and may have some portion waived if the applicant acquired the property according to ORS 465.327.
(3) For municipal and qualifying non-profit organization grant recipients, acceptable grant match includes cash, in-kind services, or other contributions of measurable value.
(4) For municipal and qualifying non-profit organization grant recipients that are not potentially liable for having caused or contributed to the release of contamination at the site and for which the project is located in or benefits a designated economically distressed community, the grant match is ten percent (10%) of the total award.
(5) For municipal and qualifying non-profit organization grant recipients that are not potentially liable for having caused or contributed to the release of contamination at the site and for which the project is not located in or does not benefit a designated economically distressed community, the grant match is twenty percent (20%) of the total award.
(6) Municipal and qualifying non-profit organization applicants that are potentially liable because the applicant’s conduct lead to or contributed to the release of contamination at the site receiving the environmental action are subject to a one to one (1:1) or 100% of award match requirement. Match must be in cash.
(7) Grant awards cannot exceed the final total project cost less the required match with a maximum award of $60,000. For grant funded projects with a match ratio of one to one (1:1), the final grant award shall not exceed fifty percent (50%) of the total final project cost or a maximum award of $60,000.
(8) If the environmental action at the site was funded with a condition requiring repayment of the grant the grant award must be repaid with any net profits generated from the resale of the site if that sale occurs within five (5) years after the completion of the environmental action. The repayment amount is the lesser of either the net profits or the amount of the grant award. Net profits equal the resale price less the sum of the purchase price and the required match for the project. In the case of properties resold by a county after property tax foreclosure, net profits equal the sum of the outstanding property tax, required match, and eligible expenses incurred by the County prior to award that are related to conducting environmental actions on the property.
(9) The Department shall make available technical assistance grants to municipalities for capacity building. Technical assistance grants may not exceed $25,000 per municipality. Technical assistance grants shall not be subject to financial review. Technical assistance grants shall require a 10% match which may include case, in-kind services or other contributions of measurable value.
(10) Notwithstanding applicant and project eligibility, the amount of a grant award shall be based on the availability of grant funds at the time of the award. The grant capacity of the Fund is determined by the Department based on a percentage of biennial allocations. The Department has the discretion to make grant awards less than the amount requested in the application if it is necessary to ensure grant capacity until the next allocation to the Fund by the Commission.
[Publications: Publications referenced are available from the agency.]
Stat. Auth.: ORS 285A.075
Stats. Implemented: ORS 285A.185 & 285A.188
Hist.: EDD 18-2002, f. & cert. ef. 12-10-02; OBDD 7-2010, f. 3-30-10, cert. ef. 4-1-10
123-135-0090
Remedies
(1) If, at any time, it is discovered that the applicant or the project violates the applicant eligibility exclusions in OAR 123-135-0030 or the project eligibility exclusions in 123-135-0040. The Department may seek legal remedies against applicants that fail to comply with the requirements governing the fund. Remedies will not be imposed by the Department until the applicant has been notified in writing of deficiencies and has been given a reasonable time to respond and correct the deficiencies noted.
(2) One or more of the following remedies may be imposed by the Department:
(a) Bar a recipient from applying for future Fund assistance;
(b) Revoke an existing Fund award;
(c) Withhold unexpended Fund funds;
(d) Require return of unexpended funds;
(e) Demand immediate repayment of expended funds at a market based rate of interest; or
(f) Withhold other state funds.
Stat. Auth.: ORS 285A.075
Stats. Implemented: ORS 285A.185 & 285A.188
Hist.: EDD 2-2001, f. & cert. ef. 2-1-01; EDD 18-2002, f. & cert. ef. 12-10-02; OBDD 7-2010, f. 3-30-10, cert. ef. 4-1-10
123-135-0100
Subsidies and Waivers
(1) The Department has the discretion to waive interest charges or provide interest rate subsidies in the form of rate reductions and may grant any other form of waiver or subsidy within its authority. The Department shall utilize its discretion to make available interest charge waivers or provide interest rate subsidies following financial evaluation of the complete application taking into consideration the relationship between the project and the needs of the local community; the availability and or leveraging of other sources of funding in the project; and after determining whether the incentive will result in a substantial public benefit.
(2) The department shall waive interest for all bridge loans. The department shall set an interest rate for a bridge loan at the time of application approval in the event the bridge loan becomes a term loan or is not repaid within the allowed time period.
(3) Applicants may request consideration for incentives in the Fund application. The Department shall rule on all incentive requests made in the Fund application at the time of application approval.
(4) Determination of whether or not a project will result in a substantial public benefit will be made on a case-by-case basis by the Department.
(5) The Department may waive non-statutory requirements of this program if it is demonstrated such a waiver would serve to further the goals and objectives of the program.
Stat. Auth.: ORS 285A.075
Stats. Implemented: ORS 285A.185 & 285A.188
Hist.: EDD 2-2001, f. & cert. ef. 2-1-01; EDD 10-2002(Temp), f. & cert. ef. 5-15-02 thru 11-11-02; Administrative correction 11-29-02; EDD 18-2002, f. & cert. ef. 12-10-02; OBDD 7-2010, f. 3-30-10, cert. ef. 4-1-10
123-135-0110
Consultation with Department of Environmental Quality
(1) In accordance with ORS 285A.188(4), the Department shall consult with the Department of Environmental Quality prior to the decision to approve an application. The Department shall provide the Department of Environmental Quality with information about the applicant, property, project description, environmental service professional, and funding amount requested.
(2) The Department of Environmental Quality shall verify within a reasonable period of time whether the applicant is ineligible for funding assistance in accordance with ORS 285A.188(3)(a).
(3) Any recommendations or relevant comments from the Department of Environmental Quality that are submitted to the Department within a reasonable period of time shall be included as part of the application for consideration.
Stat. Auth.: ORS 285A.075
Stats. Implemented: ORS 285A.185 & 285A.188
Hist.: EDD 2-2001, f. & cert. ef. 2-1-01; EDD 10-2002(Temp), f. & cert. ef. 5-15-02 thru 11-11-02; Administrative correction 11-29-02; EDD 18-2002, f. & cert. ef. 12-10-02; OBDD 7-2010, f. 3-30-10, cert. ef. 4-1-10
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