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DEPARTMENT OF ENVIRONMENTAL QUALITY

 

DIVISION 54
CLEAN WATER STATE REVOLVING FUND PROGRAM

340-054-0005
Purpose
(1) The rules in this division establish
procedures and requirements for the funding of projects and activities that enhance,
protect or restore water quality through the Water Pollution Control Revolving Fund,
called the Clean Water State Revolving Fund.
(2) This division:
(a) Assists a public agency
to obtain financing for a project that enhances, protects or restores water quality.
(b) Ensures the loan application
and funding processes, procedures and requirements are clear.
(c) Promotes loan affordability
by offering below-market interest rates.
(d) Ensures perpetuity of
the CWSRF for reliability of project funding.
Stat. Auth.: ORS 468.020 & 468.440
Stats. Implemented: ORS 468.423
– 468.440
Hist.: DEQ 2-1989, f. &
cert. ef. 3-10-89; DEQ 3-1995, f. & cert. ef. 1-23-95; DEQ 10-2003, f. &
cert. ef. 5-27-03; DEQ 11-2012, f. & cert. ef. 12-14-12; DEQ 9-2015, f. &
cert. ef. 10-16-15
340-054-0010
Definitions
The following definitions apply to this
rule division:
(1) “Applicant”
means a public agency that has applied for a CWSRF loan under this division.
(2) “Borrower”
means a public agency that has signed a CWSRF loan agreement with DEQ.
(3) “Change order”
means a written order and supporting information from a borrower to a borrower’s
contractor authorizing an addition, deletion or revision in the work within the
scope of the contract documents, including any required adjustment in contract price
or time.
(4) “Checklist of application
requirements” means a list that DEQ provides of all documents an applicant
must submit to DEQ under this division.
(5) “Clean Water Act”
or “CWA” means the federal Water Pollution Control Act, 33 U.S.C.¦1251
– ¦1387.
(6) “Clean Water State
Revolving Fund” or “CWSRF” means the Water Pollution Control Revolving
Fund established under ORS 468.427.
(7) “Construction”
means the erection, installation, expansion or improvement of a wastewater or stormwater
facility, nonpoint source control activity or estuary management project, and includes
the demolition of an obsolete facility.
(8) “Cross-cutting
authorities” means requirements of federal laws and Executive Orders that
apply to projects and activities funded under the CWSRF program.
(9) “Default”
means the failure to pay principal, interest or annual fees, or to comply with other
CWSRF loan terms or provisions, and includes the filing of bankruptcy or other written
admission of an inability to satisfy a borrower’s obligations under a CWSRF
loan.
(10) ”DEQ” means
the Oregon Department of Environmental Quality.
(11) “Design”
means preparing engineering drawings and specifications for the proposed construction,
and may include pre-design activities.
(12) “EPA” means
the U.S. Environmental Protection Agency.
(13) “Estuary management”
means implementing actions identified in a Comprehensive Conservation Management
Plan developed for a designated national estuary.
(14) “Federal loans”
are loans DEQ designates yearly in its Intended Use Plan that represent projects
that are funded with monies directly made available by the federal capitalization
grant for the associated federal fiscal year.
(15) “Local community
loan” means a loan, the proceeds of which a public agency uses to establish
a local financial program that will fund an eligible nonpoint source control or
estuary management activity.
(16) “Maintenance”
means regularly scheduled work performed to repair, replace or upgrade equipment
in a facility, or to prevent or correct a failure or a malfunction of a wastewater
or stormwater facility, nonpoint source control or estuary management project.
(17) “Natural infrastructure”
means the use of natural form and ecosystem function to restore or augment a project’s
intended water quality benefits.
(18) “Nonpoint source”
has the meaning given in ORS 468B.005.
(19) “Nonpoint source
control” means implementation of a nonpoint source control activity under
section 319 of the Clean Water Act and 40 C.F.R. ¦35.3115(b) that is included
in the 2014 Oregon Nonpoint Source Management Program Plan.
(20) “Operation”
means the control of wastewater collection system pumping stations and wastewater
facility treatment unit processes, the control of equipment and processes of stormwater
facilities, nonpoint source control and estuary management projects, and the financial
and personnel management, records, laboratory control, process control, safety,
and emergency planning for these facilities and projects.
(21) “Planning”
means monitoring, data collection and measurement, evaluation, analysis, security
evaluations, report preparation, environmental review, public education and review
process and any other activity leading to a written plan for providing a wastewater
or stormwater facility, nonpoint source control or estuary management project intended
to remediate an existing or anticipated water pollution problem, but does not include
the preparation of detailed bid documents for construction.
(22) “Point source”
has the meaning given in ORS 468B.005.
(23) “Principal forgiveness”
means additional subsidization that allows a borrower to repay only a specified
portion of the loan principal.
(24) “Project”
means the activities or tasks identified in a loan application or a loan agreement
for which a borrower may expend or obligate funds.
(25) “Public agency”
has the meaning given in ORS 468.423.
(26) “Ready to proceed”
means, in regard to a project, that a loan applicant’s project details have
been published in the Intended Use Plan under OAR 340-054-0025(3)–340-054-0025(5)
and the applicant has met all loan requirements set out in OAR 340-054-0022.
(27) “Replacement”
means obtaining and installing equipment, accessories or appurtenances necessary
for the ongoing operation of a wastewater or stormwater facility, nonpoint source
control or estuary management project in order to maintain a facility or project
for the purpose for which it was designed and constructed during its useful life,
but does not mean the replacement of a facility or project at the end of its useful
life.
(28) “Small community”
means a public agency serving a population of 10,000 or less.
(29) “Sponsorship option”
means DEQ’s financing mechanism that allows a public agency with the authority
to finance and implement a wastewater facility project and an eligible nonpoint
source control or estuary management activity to be financed through one combined
CWSRF application.
(30) “Stormwater”
means water runoff from a precipitation event, snowmelt runoff, and surface runoff
and drainage.
(31) “Sustainability”
means the long term reliability and viability of finance, operations, environmental
performance or technology, or the use of natural infrastructure.
(32) “Treatment works”
has the meaning given in ORS 468.423.
(33) “Wastewater”
has the meaning given for “sewage” in ORS 468B.005.
(34) “Wastewater collection
system” means publicly owned pipelines, conduits, pumping stations, force
mains and any other related structures, devices or equipment used to convey wastewater
to a wastewater treatment facility.
(35) “Wastewater facility”
means a wastewater collection system or wastewater treatment facility.
(36) “Wastewater treatment
facility” means a publicly owned device, structure or equipment used to treat,
neutralize, stabilize, reuse or dispose of wastewater and treatment residuals.
(37) “Water quality
standards” means the surface water standards established in OAR 340-041 and
the minimum groundwater protection requirements established in OAR 340-040.
[Publications: Publications referenced
are available from the agency.]
Stat. Auth.: ORS 468.020
& 468.440
Stats. Implemented: ORS 468.423
– 468.440
Hist.: DEQ 2-1989, f. &
cert. ef. 3-10-89; DEQ 30-1990, f. & cert. ef. 8-1-90; DEQ 1-1993, f. &
cert. ef. 1-22-93; DEQ 3-1995, f. & cert. ef. 1-23-95; DEQ 10-2003, f. &
cert. ef. 5-27-03; DEQ 3-2010(Temp), f. & cert. ef. 5-4-10 thru 10-29-10; DEQ
13-2010, f. & cert. ef. 10-27-10; DEQ 11-2012, f. & cert. ef. 12-14-12;
DEQ 2-2014, f. 1-28-14, cert. ef. 2-3-14; DEQ 9-2015, f. & cert. ef. 10-16-15
340-054-0011
Authorized Fund Uses
DEQ will use the CWSRF only to:
(1) Make loans to eligible
borrowers identified in the Intended Use Plan developed under OAR 340-054-0025;
(2) Fund loan reserves specified
in OAR 340-054-0036;
(3) Purchase bonds or acquire
other debt obligations incurred after March 7, 1985 as provided in OAR 340-054-0071;
(4) Pay CWSRF program administration
costs to the extent federal and state law allow;
(5) Earn interest on fund
accounts;
(6) Establish reserves for
bonds issued by the state for use by the fund; or
(7) Pay principal and interest
of bond obligations sold to benefit the fund.
Stat. Auth.: ORS 468.020 & 468.440
Stats. Implemented: ORS 468.423–468.440
Hist.: DEQ 11-2012, f. &
cert. ef. 12-14-12; DEQ 2-2014, f. 1-28-14, cert. ef. 2-3-14; DEQ 9-2015, f. &
cert. ef. 10-16-15
Clean Water State Revolving Fund
Loans
340-054-0015
Eligible Projects and Activities
A public agency may apply for a CWSRF
loan up to 100 percent of the cost of a water quality project or the project related
costs for the following project types:
(1) To any municipality or
intermunicipal, interstate, or State agency to construct publicly owned treatment
works.
(2) Implementing a management
program established under section 319 of the Clean Water Act.
(3) Developing and implementing
a comprehensive conservation and management plan under section 320 of the Clean
Water Act.
(4) Constructing, repairing,
or replacing decentralized wastewater treatment systems that treat municipal wastewater
or domestic sewage.
(5) Measures to manage, reduce,
treat, or recapture stormwater or subsurface drainage water.
(6) To any municipality or
intermunicipal, interstate, or State agency for measures to reduce the demand for
publicly owned treatment works capacity through water conservation, efficiency,
or reuse.
(7) Developing and implementing
watershed projects meeting the criteria set forth in section 122 of the Clean Water
Act.
(8) To any municipality or
intermunicipal, interstate, or State agency for measures to reduce the energy consumption
needs for publicly owned treatment works.
(9) For reusing or recycling
wastewater, stormwater, or subsurface drainage water.
(10) For measures to increase
the security of publicly owned treatment works.
Stat. Auth.: ORS 468.020 & 468.440
Stats. Implemented: ORS 468.423
- 468.440
Hist.: DEQ 2-1989, f. &
cert. ef. 3-10-89; DEQ 30-1990, f. & cert. ef. 8-1-90; DEQ 1-1993, f. &
cert. ef. 1-22-93; DEQ 3-1995, f. & cert. ef. 1-23-95; DEQ 10-2003, f. &
cert. ef. 5-27-03; DEQ 11-2012, f. & cert. ef. 12-14-12; DEQ 9-2015, f. &
cert. ef. 10-16-15
340-054-0022
Loan Application Requirements
(1) Application submittal. DEQ will
notify interested parties at least annually of the opportunity to submit applications
for a CWSRF loan. An eligible public agency may submit a CWSRF loan application
to DEQ at any time.
(2) Consideration for funding.
DEQ will consider an applicant for funding only if its project is included in the
Intended Use Plan and all application requirements in this division are met.
(3) All CWSRF loans. An applicant
must submit the following to DEQ:
(a) A complete application
on the applicable DEQ form;
(b) Documents specified in
the DEQ checklist of application requirements;
(c) Audited financial statements
for the three years prior to the application date and the applicant’s current
budget, unless waived in writing by DEQ;
(d) Evidence the applicant
has the authority to undertake the project including, but not limited to, evidence
of a loan approval resolution or similar authorization for signing a loan agreement
and establishing a loan reserve account;
(e) Evidence the applicant
has authority to collect and pledge the revenue offered as repayment for a CWSRF
loan, repay a loan and, where applicable, the ability to ensure ongoing operation
and maintenance of the proposed wastewater or stormwater facility, nonpoint source
control or estuary management project. DEQ may require an applicant to meet the
following criteria for a revenue-secured loan described under OAR 340-054-0065(2):
(A) An applicant’s
revenue stream is not at risk from undue dependence upon a limited portion of the
system’s customer base or a pattern of delinquent payment from that portion
of the system’s customer base, and
(B) An applicant must have
the ability to collect from delinquent customers;
(f) Pre-award compliance
review report or other evidence DEQ requires showing compliance with federal nondiscrimination
requirements;
(g) For projects serving
two or more public agencies, the executed inter-agency agreements, contracts or
other legally binding instruments necessary for financing, construction and operation
of the proposed project. The documents must be satisfactory to DEQ for determining
an adequate pledge of security;
(h) Evidence of resolution,
ordinance or other authorization approving bonds secured by sewer or other revenue
sources if required by DEQ;
(i) Official statement of
recently issued bonds if required by DEQ;
(j) A DEQ-approved certification
that the requirements for the cost and effectiveness analysis and the subsequent
project selection are completed as required by section 602(b)(13) of the CWA;
(k) Any other information
DEQ requests as necessary to complete the loan application.
(4) Local community loan.
In addition to the requirements in section (3) of this rule, an applicant applying
for a CWSRF local community loan must submit the following to DEQ:
(a) A description of how
the project will implement a nonpoint source control activity or estuary management
effort.
(b) A projected cash flow
statement based on anticipated number of local loans, their repayment schedule,
amount and timing of department disbursement and amount and timing of repayments
to DEQ.
(c) Unless waived by DEQ,
evidence of a user charge system or other source of revenue if the applicant will
be securing and repaying the loan with sewer system revenues.
(d) Unless waived by DEQ,
demonstration of compliance with applicable federal environmental cross-cutting
authorities.
(e) Documentation that demonstrates
compliance with the land use requirements in OAR 340-018-0050.
(f) DEQ approved plans and
specifications as required under OAR chapter 340, division 52.
(g) An environmental determination
obtained from DEQ for a nonpoint source pollution control (CWA ¦ 319) or estuary
management (CWA ¦ 320) project that are construction and treatment works as
defined in ORS 468.423. The environmental determination must meet the following
conditions:
(A) An applicant must provide
all necessary documentation to support DEQ’s review of the entire projects’
potential environmental impacts and include an analysis of a no action alternative
and other reasonable alternatives considered.
(B) Project construction
must begin within five years of the environmental determination.
(h) If an applicant does
not obtain an environmental determination as specified in subsection (4)(g) of this
section, an applicant may submit to DEQ, and DEQ may accept, an environmental determination
made by another agency that meets the following conditions:
(A) The project scope must
be essentially unchanged from that accepted by the other agency.
(B) The other agency’s
determination must have been made within the previous five years.
(C) The federal environmental
cross-cutting authorities have been met and documented.
(5) All design or construction
loans. In addition to the requirements in section (3) of this rule, an applicant
applying for a CWSRF design or construction loan must submit the following to DEQ:
(a) Unless waived by DEQ,
evidence of a user charge system or other source of revenue if the applicant will
be securing and repaying the loan with sewer system revenues.
(b) Unless waived by DEQ,
demonstration of compliance with applicable federal environmental cross-cutting
authorities for a construction project.
(c) An environmental determination
obtained from DEQ for a construction project of a treatment works as defined in
ORS 468.423, including a nonpoint source pollution control (CWA ¦ 319) or estuary
management (CWA ¦ 320) project that are construction and treatment works as
defined in ORS 468.423. The environmental determination must meet the following
conditions:
(A) An applicant must provide
all necessary documentation to support DEQ’s review of the entire projects’
potential environmental impacts and include an analysis of a no action alternative
and other reasonable alternatives considered.
(B) Project construction
must begin within five years of the environmental determination.
(d) If an applicant does
not obtain an environmental determination as specified in subsection (5)(c) of this
section, an applicant may submit to DEQ, and DEQ may accept, an environmental determination
made by another agency that meets the following conditions:
(A) The project scope must
be essentially unchanged from that accepted by the other agency.
(B) The other agency’s
determination must have been made within the previous five years.
(C) The federal environmental
cross-cutting authorities have been met and documented.
(e) Documentation that demonstrates
compliance with the land use requirements in OAR 340-018-0050.
(f) For a construction-only
loan, DEQ-approved plans and specifications for the project as OAR chapter 340,
division 052 requires.
(g) If the estimated cost
of a project is in excess of $10 million, a value engineering study satisfactory
to DEQ done prior to beginning construction. The study must be a specialized cost
control technique specifically applicable to the wastewater treatment facility design
identifying cost savings that can be made without sacrificing project reliability
or efficiency.
(6) Design or construction
loan for a point source project. In addition to the requirements in sections (3)
and (5) of this rule, an applicant applying for a CWSRF design or construction loan
for a point source project must submit the following to DEQ:
(a) An engineered planning
document in the form of either a facility plan or project pre-design report that
provides a comprehensive evaluation of environmental factors, engineering alternatives
and financial considerations affecting the project area. This document must adequately
describe the effectiveness and suitability of the proposed project to address the
identified water quality problem. An applicant must have DEQ review and approve
this document before signing a design or construction loan.
(b) Evidence of a sewer use
ordinance or equivalent authority that prohibits:
(A) New connections from
inflow sources into the wastewater collection system; and
(B) Wastewater introduced
into the wastewater collection system containing toxics or other pollutants in amounts
or concentrations that have the potential of endangering public safety, adversely
affecting the project or precluding the selection of the most cost-effective alternative
for the project.
(c) When a public agency
applies for a wastewater facility construction loan that includes a sponsorship
option, complete information about the nonpoint source control or estuary management
activity on the applicable application form. DEQ will only consider a sponsorship
option if a nonpoint source control or estuary management activity is included as
part of the entire project scope.
(7) Design or construction
loan for a nonpoint source project. In addition to the requirements in sections
(3) and (5) of this rule, an applicant applying for a CWSRF design or construction
loan for a nonpoint source project must submit an engineered planning report to
DEQ. The report must define the water quality problem and specify actions an applicant
will implement to correct the problem.
(8) Federal loans. In addition
to the applicable requirements in sections (3)–(7) of this rule, a loan designated
as a federal loan must meet the requirements for federally funded projects in accordance
with the Clean Water Act Title VI and EPA’s January 6, 2015 memo “Interpretive
Guidance for Certain Amendments in the Water Resources Reform and Development Act
to Titles I, II, V, and VI of the Federal Water Pollution Control Act.”
Stat. Auth.: ORS 468.020 & 468.440
Stats. Implemented: ORS 468.423
– 468.440
Hist.: DEQ 10-2003, f. &
cert. ef. 5-27-03; DEQ 11-2012, f. & cert. ef. 12-14-12; DEQ 9-2015, f. &
cert. ef. 10-16-15
340-054-0025
Intended Use Plan (IUP) and Project
Priority List
(1) IUP development. DEQ will annually
develop and submit an IUP to EPA as described in the CWA ¦ 606 and 40 C.F.R.
¦35.3150. DEQ will update the IUP as specified in section (2) of this rule.
The IUP will describe how DEQ proposes to fund projects through the CWSRF and will
include a project priority list that numerically ranks all eligible applications
received.
(2) IUP update.
(a) Except as specified in
subsection (b) of this section, DEQ will update the annual IUP and project priority
list at least every four months or when DEQ receives five eligible applications,
whichever timeframe is shorter, and will submit the updated plan to EPA.
(b) If DEQ does not receive
an eligible application during a four month period and determines the project priority
list does not need to be updated, DEQ will not update the IUP.
(3) IUP public notice. DEQ
will provide public notice and 30 days for the public to comment on a proposed draft
IUP.
(a) DEQ will notify all new
applicants of their project application ranking on the project priority list when
DEQ develops and updates an annual IUP.
(b) An applicant may ask
DEQ to reevaluate their project application’s score and ranking on the proposed
project priority list or to make other changes to an IUP during the public comment
period.
(c) DEQ will consider and
respond to all comments submitted during the public comment period before finalizing
an IUP.
(4) Project priority list
development. DEQ will include an eligible project under OAR 340-054-0015 on the
project priority list if an applicant submits a completed application on a DEQ-
approved form.
(5) Project priority list
ranking. DEQ will numerically rank all eligible proposed project applications based
on the point sum from the criteria specified in OAR 340-054-0026 and 340-054-0027.
(a) Except as specified in
subsection (b) of this section, DEQ will evaluate each criterion in OAR 340-054-0026
and 340-054-0027 on a point scale from one to five as follows:
(A) One point = No or very
low likelihood.
(B) Two points = Low or in
some minor way.
(C) Three points = Moderate
to significant likelihood.
(D) Four points = High likelihood.
(E) Five points = Very high
likelihood.
(b) DEQ will evaluate criteria
1c, 1d, 2b, 2c, 2d, 2e, and 3d in OAR 340-054-0026 and criterion 5 in OAR 340-054-0027
by doubling the point scale specified in subsection (a) of this section.
(6) Removal of application
from the project priority list.
(a) DEQ may retain an applicant’s
ranked project on the project priority list in an IUP for up to 36 months while
an applicant pursues all applicable CWSRF financing requirements specified in this
division.
(b) After DEQ initially includes
a ranked project on the project priority list, an applicant must submit to DEQ an
annual written project status report to remain on the project priority list.
(c) DEQ may provide one six-month
extension to an applicant asking to remain on the project priority list beyond the
36-month limit. An applicant asking for an extension must submit to DEQ a written
project status report on the applicant’s project progress and an updated time
frame indicating when the applicant will complete all CWSRF financing requirements.
(d) DEQ will provide written
notice to an applicant before removing the applicant’s project from the project
priority list.
(e) DEQ will remove a project
from the project priority list if:
(A) An applicant does not
submit an annual written project status report as subsection (b) of this section
requires;
(B) An applicant does not
ask for a six-month extension beyond the 36-month limit and submit the project status
report as subsection (c) of this section requires;
(C) DEQ determines the project
scope changed from the original ranked application;
(D) DEQ determines a project
does not meet eligibility requirements;
(E) An applicant does not
require CWSRF financing; or
(F) An applicant asks to
be removed from the project priority list.
(f) If DEQ removes a project
from the project priority list as specified in paragraph (e)(A through C) of this
section, an applicant may resubmit to DEQ a loan application for an eligible project
that DEQ will evaluate under section (5) of this rule.
Stat. Auth.: ORS 468.020
& 468.440
Stats. Implemented: ORS 468.423 –
468.440
Hist.: DEQ 2-1989, f. &
cert. ef. 3-10-89; DEQ 30-1990, f. & cert. ef. 8-1-90; DEQ 1-1993, f. &
cert. ef. 1-22-93; DEQ 3-1995, f. & cert. ef. 1-23-95; DEQ 10-2003, f. &
cert. ef. 5-27-03; DEQ 1-2009(Temp), f. 4-27-09, cert. ef. 5-1-09 thru 10-27-09;
DEQ 7-2009, f. & cert. ef. 10-28-09; DEQ 3-2010(Temp), f. & cert. ef. 5-4-10
thru 10-29-10; DEQ 13-2010, f. & cert. ef. 10-27-10; DEQ 11-2012, f. & cert.
ef. 12-14-12; DEQ 9-2015, f. & cert. ef. 10-16-15
340-054-0026
CWSRF Project Ranking Criteria for
Non-planning Loans
(1) Category 1. Water quality standards
and public health considerations.
(a) Does the project improve
water quality by addressing water quality parameters including, but not limited
to: temperature, dissolved oxygen, contaminated sediments, toxic substances, bacteria
or nutrients?
(b) Does the project ensure
that a facility currently in compliance, but at risk of noncompliance, maintains
compliance?
(c) Does the project address
noncompliance with water quality standards, public health issues or effluent limits
related to surface waters, biosolids, water reuse or groundwater?
(d) If the project is not
implemented, is a water quality standard likely to be exceeded or an existing exceedance
likely to worsen?
(2) Category 2. Watershed
and health benefits.
(a) Does the project improve
or sustain aquatic habitat supporting native species or state or federally threatened
or endangered species?
(b) Does the project address
a water quality or public health issue within a federally designated wild and scenic
river or sole source aquifer, state designated scenic waterway, the Lower Columbia
River or Tillamook Bay estuary, a river designated under OAR 340-041-0350, or a
significant wetland and riparian area identified and listed by a local government?
(c) Does the project support
implementation of a total maximum daily load (TMDL) allocation, a department water
quality status and action plan or designated groundwater management area declared
under ORS 468B.180?
(d) Does the project provide
performance-based water quality improvements supported by monitoring and reasonable
assurance that the project will continue to function over time?
(e) Does the project integrate
or expand sustainability or the use of natural infrastructure, or use approaches
including, but not limited to, water quality trading, that are not specified in
subsections (f) through (i) of this section of the rule?
(f) Does the project incorporate
or expand green stormwater infrastructure including, but not limited to, practices
that manage wet weather and that maintain and restore natural hydrology by infiltrating,
evapotranspiring, harvesting or using stormwater on a local or regional scale?
(g) Does the project incorporate
or expand water efficiency including, but not limited to, using improved technologies
and practices to deliver equal or better services with less water, such as conservation,
reuse efforts or water loss reduction and prevention?
(h) Does the project incorporate
or expand energy efficiency including, but not limited to, using improved technologies
and practices to reduce energy consumption of water quality projects, use energy
in a more efficient way or to produce or utilize renewable energy?
(i) Does the project incorporate
or expand environmentally innovative projects including, but not limited to, demonstrating
new or innovative approaches to deliver services or manage water resources in a
more sustainable way?
(3) Category 3. Other considerations.
(a) Does the project include
a long-term planning effort that addresses financial, managerial or technical capability,
or asset planning that ensures the project will be maintained?
(b) Does the project include
a significant on-going educational or outreach component?
(c) Does the project incorporate
other resources including, but not limited to, in-kind support, other funding sources
or a partnership with a governmental, tribal or non-governmental organization?
(d) Does the project address
a small community’s water quality improvement or restoration need?
(e) Does the project include
a sponsorship option?
Stat. Auth.: ORS 468.020 & 468.440
Stats. Implemented: ORS 468.423
- 468.440
Hist.: DEQ 11-2012, f. &
cert. ef. 12-14-12; DEQ 9-2015, f. & cert. ef. 10-16-15
340-054-0027
CWSRF Project Ranking Criteria for
Planning Loans
Will the scope of the planning effort:
(1) Include more than one
water quality benefit, pollutant or restoration effort?
(2) Include sustainability?
(3) Take advantage of an
opportunity with respect to timing, finances, partnership or other advantageous
opportunity?
(4) Include financial, managerial
or technical capability aspects of the project?
(5) Include integrating natural
infrastructure and built systems?
(6) Demonstrate applicant
cost effectiveness by considering three or more project alternatives such as optimizing
an existing facility, regional partnership or consolidation?
Stat. Auth.: ORS 468.020, 468.440
Stats. Implemented: ORS 468.423
- 468.440
Hist.: DEQ 11-2012, f. &
cert. ef. 12-14-12; DEQ 9-2015, f. & cert. ef. 10-16-15
340-054-0036
Reserves, CWSRF General Fund and
Project Funding
(1) Allocation to reserves and CWSRF
general fund. DEQ will allocate available CWSRF funds in a state fiscal year first
to the small community, planning and green project reserves, and then to the CWSRF
general fund based on the following amounts:
(a) A maximum of 25 percent
of the total available CWSRF funds to the small community reserve.
(b) A maximum of $3 million
to the planning reserve.
(c) An amount at least equal
to the minimum required by the federal capitalization grant to the green project
reserve.
(d) Amount of funds remaining,
after allocation to the reserves as specified in subsections (a) through (c) of
this section of the rule, to the CWSRF general fund.
(2) Project funding increase.
(a) DEQ will offer a funding
increase to a borrower for an existing project based on the original project priority
list ranking before offering a loan to an applicant for a new project loan if:
(A) Funds are available in
the CWSRF; and
(B) The borrower submits
a written request to DEQ for additional funding, has the legal authority to borrow
the increased loan amount and has the financial capability to repay the increased
loan amount.
(b) Any funding increase
DEQ awards to a borrower will be in an amount specified in section (3) of this rule
and will be done by increasing the amount of the borrower’s existing loan
or by DEQ making an additional loan to the borrower at the current interest rate.
(3) Project funding allocation.
(a) During a state fiscal
year DEQ will assign a project to an appropriate reserve, to the CWSRF general fund
or to both.
(b) Based on availability
of funds in the CWSRF at the time of allocation, DEQ will allocate an amount to
a borrower in project priority list rank order that:
(A) Is not more than the
greater of $2.5 million or 15 percent of the total available CWSRF funds in a state
fiscal year. DEQ may allocate additional funds if funds are available after allocating
the maximum amount under subsection (b)(A) of this section of the rule to each borrower
who requested project funding in a state fiscal year;
(B) Is not more than the
greater of $750,000 or 25 percent of the small community reserve, until all eligible
small community requests have been allocated;
(C) Is not more than $250,000
of the planning reserve; and
(D) Only finances the portion
of a project funded under the green project reserve that DEQ determines meets federal
requirements for green infrastructure, water or energy efficiency improvement, or
other environmentally innovative activities as defined by EPA requirements.
(c) During a state fiscal
year DEQ will allocate funding for a new design or construction project loan from
the CWSRF general fund if the project is not funded from a reserve.
(d) DEQ will allocate in
project priority list rank order available funding from the CWSRF general fund for
a small community or planning project that was not allocated from their respective
reserves, or allocated less than the total loan amount requested.
(4) Reallocation of reserve
funds.
(a) DEQ may reallocate funds
between small community and planning reserves and the CWSRF general fund unless
demand exceeds available funds.
(b) DEQ will not reallocate
funds remaining in the green project reserve to the CWSRF general fund.
(5) Sponsorship option allocation.
DEQ will determine the total amount of CWSRF funds to be allocated at a reduced
interest rate through the sponsorship option in each state fiscal year.
Stat. Auth.: ORS 468.020, 468.440
Stats. Implemented: ORS 468.423
- 468.440
Hist.: DEQ 11-2012, f. &
cert. ef. 12-14-12; DEQ 9-2015, f. & cert. ef. 10-16-15
340-054-0056
CWSRF Loan Use Conditions
(1) Clean Water Act plans. DEQ will
only provide a loan to a project that is consistent with plans developed under sections
303(e), 319 or 320 of the Clean Water Act.
(2) Refinancing a long-term
loan. DEQ will not provide a loan that will be used for refinancing a long-term
loan or other debt obligations.
(3) Refinancing an interim
loan. DEQ may provide a loan to refinance an interim loan or self-generated funds
used to pay DEQ-approved project costs if the borrower:
(a) Provides DEQ with a written
notice of intent to apply for long-term financing;
(b) Wants to proceed with
the project using interim financing or self-generated funds; and
(c) Agrees to proceed at
its own risk whether or not the CWSRF is available to provide long-term financing.
(4) Interim financing. DEQ
may provide short-term, construction period financing for an eligible project if
the following conditions are met:
(a) The CWSRF’s liquidity
is sufficient to provide financing without adversely affecting the amount and timing
of disbursements needed for prior obligations;
(b) The borrower has a legally
enforceable obligation for long-term project financing satisfactory to DEQ; and
(c) The loan agreement for
interim financing will stipulate DEQ is not obligated to provide long-term financing
for the project.
Stat. Auth.: ORS 468.020, 468.440
Stats. Implemented: ORS 468.423
- 468.440
Hist.: DEQ 11-2012, f. &
cert. ef. 12-14-12; DEQ 9-2015, f. & cert. ef. 10-16-15
340-054-0060
Loan Agreement and Conditions
DEQ will include conditions in a loan
agreement that are applicable to the type of project being financed, including,
but not limited to, the following:
(1) Timely use of loan funding.
DEQ may cancel a loan agreement if a borrower fails to begin using loan proceeds
within two years after signing a loan agreement.
(2) Accounting. A borrower
must maintain all CWSRF project accounts as separate accounts and must use accounting,
audit and fiscal procedures that conform to Generally Accepted Governmental Accounting
Standards and the requirements of the Governmental Accounting Standards Board.
(3) Records retention. A
borrower must retain project files and records for six years after project performance
affirmative certification or project completion as determined by DEQ or such longer
period as applicable state or federal law requires. A borrower must also retain
financial files and records for three years after the loan is repaid in full.
(4) Wage requirements.
(a) A borrower for construction
of a treatment works project must comply with all provisions of the Davis-Bacon
Act, as amended, 40 U.S.C. ¦¦3141 to 3144 and 3146, as detailed in section
513 of the Clean Water Act. Wage rates must be based on the wage requirements of
the Davis Bacon Act or the prevailing wage rate requirements for public works projects
under ORS 279C.800 to 279C.870 and OAR 839-025-0000 to 839-025-0540, whichever is
higher.
(b) A borrower for a project
not specified in subsection (a) of this section of the rule must comply with the
prevailing wage rate requirements under ORS 279C.800 to 279C.870 and OAR 839-025-0000
to 839-025-0540.
(5) Construction materials.
A borrower for construction of a treatments works project must ensure that all of
the iron and steel products used in the project are produced in the United States
as required by section 608 of the Clean Water Act.
(6) Debarment and suspension.
A borrower must comply with Subpart C of 2 C.F.R part 180, Responsibilities of Participants
Regarding Transactions Doing Business with Other Persons and Subpart C of 2 C.F.R
part 1532, Responsibilities of Participants Regarding Transactions.
(7) Engineering documents.
If a borrower uses CWSRF financing to construct a wastewater facility subject to
OAR 340-052, it must submit to DEQ plans and specifications, operation and maintenance
manuals, inspection and certification of proper construction, and any other applicable
documentation OAR 340-052 and 340-054-022 require.
(8) Inspections and progress
reports.
(a) A borrower must have
a qualified inspector under the direction of a registered civil, mechanical or electrical
engineer, as appropriate, conduct on-going inspections during the construction phase
of a wastewater facility subject to OAR 340-052 to ensure the project complies with
approved plans and specifications. DEQ or its representative may enter property
the borrower owns or controls to conduct interim inspections. DEQ may require progress
reports sufficient to determine compliance with approved plans and specifications
and with other loan agreement provisions.
(b) DEQ may request review
and analysis of construction plans from relevant agencies or offices to ensure the
project plans not subject to department review under OAR 340-052 support the successful
implementation and completion of the project. A borrower must allow inspections
by appropriately qualified persons during project construction or implementation
to ensure the project as constructed conforms to project plans and other provisions
of the loan agreement.
(9) Loan amendments.
(a) DEQ will not require
a loan amendment for changes in project work that are consistent with project objectives
and within the loan scope and funding level.
(b) DEQ will execute a loan
amendment if:
(A) DEQ awards a borrower
an increase in the original approved loan amount at any time during the project;
(B) The borrower requests
a decrease in the original loan amount at any time during the project or completes
the project and does not request disbursement of all loan proceeds; or
(C) DEQ determines a borrower
must meet additional federal or state requirements for CWSRF financing.
(10) Change orders. DEQ may
approve or reject a change order based on the loan eligibility of the project modification
and on engineering value under OAR 340-052-0015. A borrower must submit a change
order to DEQ for engineering and financial review:
(a) When any change order
is executed, and
(b) Prior to executing any
change order that exceeds $100,000 or will alter project performance.
(11) Project performance
certification for a wastewater facility. A borrower must submit to DEQ, within a
timeframe DEQ specifies, project performance documents to verify whether the facility
meets performance and operational requirements and specifications which the project
was planned, designed and built to achieve. The documents may include, but are not
limited to, construction certification, performance evaluation report or performance
certification.
(12) Eligible construction
costs. DEQ will disburse loan funds for construction costs limited to work that
complies with plans, specifications, change orders and addenda DEQ reviewed or approved.
(13) Adjustments. DEQ may
at any time review and audit requests for payment and make adjustments for eligibility,
math errors, items not built or bought, unacceptable construction or other discrepancies.
(14) Contract and bid documents.
A borrower must submit a copy of the awarded contract and bid documents to DEQ,
including a tabulation of all bids received.
(15) Architectural and engineering
services. Contractors for program management, construction management, feasibility
studies, preliminary engineering design, design, engineering, surveying, mapping,
or architectural related services for federal loans must be selected as provided
in ORS 279C.110 and OAR 137-048-0220.
(16) Audit.
(a) If DEQ requests it, a
borrower must submit audited financial statements to DEQ each year until the loan
is repaid.
(b) If a borrower expends
$500,000 or more in federal funds (from all sources) in its fiscal year beginning
prior to December 26, 2014, the borrower shall have a single organization-wide audit
conducted in accordance with the Single Audit Act, as amended. If borrower expends
$750,000 or more in federal funds (from all sources) in a fiscal year beginning
on or after December 26, 2014, borrower shall have a single organization-wide audit
conducted in accordance with the provisions of 2 C.F.R. Subtitle B, with guidance
at 2 C.F.R. part 200. Copies of all audits must be submitted to DEQ within 30 days
of completion. If borrower expends less than $500,000 in federal funds in a fiscal
year beginning prior to December 26, 2014, or less than $750,000 in a fiscal year
beginning on or after that date, borrower is exempt from federal audit requirements
for that year. Records must be available to DEQ, the Oregon Secretary of State’s
Office, the federal government and their duly authorized representatives for the
purpose of making audits, examinations and copies.
(17) Default remedies. A
loan agreement must provide adequate remedies for DEQ to enforce the agreement’s
terms. Upon default by a borrower, DEQ may proceed with one or more of the following:
(a) Pursuing any remedy available
to it against the borrower.
(b) Appointing a receiver
at the expense of the borrower to operate the facility that generates the pledged
revenues.
(c) Setting and collecting
utility rates and charges pledged as security for the loan.
(d) Withholding any amounts
otherwise due to the borrower from the State of Oregon and directing such funds
be applied to the debt service and fees due on the CWSRF loan. If DEQ finds the
loan to the borrower is otherwise adequately secured, DEQ may waive this right in
the loan agreement or other loan documentation.
(e) Declaring all or any
part of the indebtedness immediately due and payable.
(18) Release. A borrower
must release and discharge DEQ, its officers, agents and employees from all liabilities,
obligations and claims occurring from project work or under the loan, subject only
to exceptions previously agreed upon in a written contract between DEQ and the borrower.
(19) Effect of document approval
or certification.
(a) DEQ’s review and
approval of facilities plans, design drawings and specifications, or any other documents
by or for DEQ does not relieve a borrower of responsibility to properly plan, design,
build and effectively operate and maintain a wastewater or stormwater facility,
nonpoint source control or estuary management project as required by law, regulations,
permits and good management practices.
(b) DEQ may not be held responsible
for:
(A) Any project costs or
any losses or damages resulting from defects in plans, design drawings and specifications,
or other sub-agreement documents; or
(B) Verifying cost-effectiveness,
cost comparisons or adherence to state procurement regulations.
(20) Reservation of rights.
(a) A borrower is not prohibited
from requiring such assurances, guarantees, indemnity or other contractual requirements
as it deems necessary or prudent from any party performing project work.
(b) This rule does not affect
DEQ’s right to take remedial action, including, but not limited to, administrative
enforcement action and actions for breach of contract against a borrower that fails
to carry out its obligations under OAR chapter 340.
(21) Other provisions and
documentation. DEQ may include other provisions in a CWSRF loan agreement necessary
to meet the Clean Water Act and ORS 468.423 to 468.440. DEQ may require documentation
including, but not limited to, a legal counsel opinion that the loan agreement is
enforceable.
Stat. Auth.: ORS 468.020 & 468.440
Stats. Implemented: ORS 468.423
– 468.440
Hist.: DEQ 2-1989, f. &
cert. ef. 3-10-89; DEQ 31-1989(Temp), f. & cert. ef. 12-14-89; DEQ 30-1990,
f. & cert. ef. 8-1-90; DEQ 1-1993, f. & cert. ef. 1-22-93; DEQ 3-1995, f.
& cert. ef. 1-23-95; Administrative Correction; DEQ 10-2003, f. & cert.
ef. 5-27-03; DEQ 2-2008, f. & cert. ef. 2-27-08; DEQ 11-2012, f. & cert.
ef. 12-14-12; DEQ 9-2015, f. & cert. ef. 10-16-15
340-054-0065
Loan Types, Terms and Interest Rates
(1) Loan types. A CWSRF loan must be
one of the following:
(a) A loan secured by a general
obligation bond, as defined in ORS 287A.001(1).
(b) A loan secured by the
borrower’s pledge of its full faith and credit and taxing power, as described
in ORS 287A.315.
(c) A loan agreement, bond
or other unconditional obligation that meets the requirements specified in section
(2) of this rule.
(d) An alternative loan that
meets the requirements specified in section (3) of this rule.
(2) A revenue secured loan
that must:
(a) Be represented by a properly
executed loan agreement, bonds or other unconditional obligations to pay from specified
revenues that are pledged by the borrower to DEQ. The obligation to pay must include
a pledge of security acceptable to DEQ.
(b) Include a rate provision
that requires the borrower to impose and collect revenues sufficient to pay:
(A) All expenses of operation,
maintenance and replacement of a wastewater or stormwater facility, nonpoint source
control or estuary management project;
(B) All debt service;
(C) All other financial obligations
including, but not limited to, contributions to reserve accounts imposed in connection
with prior lien obligations; and
(D) An amount equal to the
loan’s coverage requirements. This requirement is the product of the coverage
factor times the debt service due in that year on the CWSRF loan. The coverage factor
used must correspond to the coverage factor and reserve percentage selected by the
borrower from subsection (d) of this section of the rule.
(c) Include a debt service
reserve provision requiring the borrower to maintain a pledged reserve dedicated
to the CWSRF loan payment and that meets the following requirements:
(A) The debt service reserve
must be maintained in an amount at least equal to the product of the reserve percentage
listed in subsection (d) of this section of the rule times one half the average
annual debt service during the repayment period based on the repayment schedule
or revised repayment schedule in the loan agreement. The reserve percentage selected
from subsection (d) of this section of the rule must correspond to the coverage
factor selected for the CWSRF loan.
(B) A loan reserve may be
funded with the borrower’s cash, a letter of credit, repayment guaranty or
other third party commitment to advance funds that is satisfactory to DEQ. If DEQ
determines reserve funding imposes an undue hardship on the borrower, DEQ may allow
reserves to be funded with CWSRF loan proceeds.
(d) Comply with the one of
the following coverage factors (net income to debt service) and reserve percentages
(percentage of one-half the average annual debt service):
(A) 1.05:1-100 percent.
(B) 1.15:1-75 percent.
(C) 1.25:1-50 percent.
(D) 1.35:1-25 percent.
(e) Include a requirement
for the borrower to conduct a periodic rate review and adjustment of rates, if necessary,
to ensure estimated revenues in subsequent years are sufficient.
(f) Include a requirement
that if revenues fail to achieve the required rate level, the borrower must promptly
adjust rates and charges to assure future compliance with the rate requirements.
DEQ may determine that failure to adjust rates does not constitute a default if
the borrower transfers unencumbered resources in an amount equal to the revenue
deficiency to the utility system that generates the revenues.
(g) Include a requirement
that if the reserve account is depleted for any reason, the borrower must take prompt
action to restore the reserve to the required minimum amount.
(h) Include a requirement
restricting additional debt appropriate to the borrower’s financial condition.
(i) Prohibit the borrower
from selling, transferring or encumbering any financial or fixed asset of the utility
system that produces the pledged revenues if the borrower is in violation of a CWSRF
loan requirement, or if such sale, transfer or encumbrance may cause a violation
of a CWSRF loan requirement.
(3) Alternative loans. DEQ
may authorize an alternative loan for a reasonable alternative financing method
if the borrower demonstrates to DEQ’s satisfaction that:
(a) Borrowing money from
the CWSRF through general obligation bonds, revenue bonds or a revenue-secured loan,
as described in subsection(a), (b), (c), or (d) of section (1) of this rule is unduly
burdensome or costly to the borrower; and
(b) The alternative loan
has a credit quality substantially equal to, or better than, the revenue secured
loan credit quality to the borrower. DEQ may consult with a financial advisor and
may charge the borrower reasonable consultation costs to determine if an alternative
loan meets the credit quality requirement.
(4) Interest rates.
(a) Effective date. The interest
rates as specified in this section are effective for all loan agreements executed
on or after January 1, 2013.
(b) Base rate. DEQ will determine
the base rate used in computing the interest rates on all direct loans for a quarter
based on the weekly average of state and local government bond interest rates for
the preceding quarter. This base rate will be the “state and local bonds”
entry reported in “Selected Interest Rates, H.15” posted by the Federal
Reserve from the “Bond Buyer Index” for general obligation bonds (20
years to maturity, mixed quality).
(c) Planning loans. The interest
rate for a planning loan will be equal to 25 percent of the base rate.
(d) Local community loans.
The interest rate for a local community loan will be equal to 50 percent of the
base rate.
(e) Federal loans. DEQ will
determine the interest rate for federal loans. DEQ will not set a rate that exceeds
the highest rate described in Table 2 of this rule.
(f) All other direct loans.
Except as provided in OAR 340-054-0065(10), DEQ will provide the following interest
rates for all other CWSRF loans:
(A) For loans with a maximum
repayment period of up to 20 years, DEQ will provide the following interest rates
as detailed in Table 1 of this rule.
(B) (Effective January 1,
2016) For loans with a maximum repayment period of up to 30 years, DEQ will provide
the following interest rates as detailed in Table 2 of this rule.
Interest rate premiums as
described in Tables 1, 2 in this rule, and Table 3 in OAR 340-054-0072, will be
set so as to safeguard the perpetuity of the fund and will be reevaluated from time
to time.
(g) Sponsorship option. When
a sponsorship option is implemented within the scope of a construction loan, DEQ:
(A) Will calculate the debt
service on the wastewater facility project based on subsection (f) of this section
of the rule;
(B) Will calculate the debt
service on a combined sponsorship loan by reducing the interest rate so the debt
service on the sponsorship loan equals the debt service as calculated in subsection
(g)(A) of this section of the rule; and
(C) May not reduce the resulting
interest rate below one percent.
(h) Bond proceeds for direct
loans. DEQ may use bond proceeds that are matching funds for federal capitalization
grants to fund direct loans at the interest rates listed in this section. Any change
in the source of repayment for matching bonds will not affect this subsection’s
requirements.
(5) Interest accrual and
payment period. Interest accrual begins when DEQ makes the first CWSRF loan disbursement
to a borrower. A borrower must include all outstanding accrued interest with each
loan repayment.
(6) Annual loan fee.
(a) Except as provided in
subsection (b) of this section of the rule, a borrower must pay DEQ an annual loan
fee of 0.5 percent on the unpaid loan balance specified in the payment schedule
in its loan agreement. This annual loan fee is in addition to any other payments
a borrower is required to make under its loan agreement.
(b) DEQ will not charge a
borrower any annual loan fee for a planning loan.
(7) Commencement of loan
repayment. A borrower must begin its loan principal and interest repayments within
one year of the date the facility is operationally complete and ready for the purpose
for which it was planned, designed, and built or DEQ determines that the project
is completed.
(8) Loan term.
(a) A borrower must fully
repay a loan in accordance with a repayment schedule determined by DEQ. DEQ will
consider the useful life of the assets financed when determining the repayment schedule.
The repayment term for:
(A) A planning loan will
not exceed five years;
(B) A local community loan
will not exceed ten years;
(C) All other loans will
not exceed 20 years after project completion; and
(D) Effective January 1,
2016, loan terms will not exceed 30 years after project completion.
(b) DEQ will allow prepayments
at any time without penalty on all CWSRF loans except as specified in section (10)
of this rule.
(c) A loan must be fully
amortized by the maturity date of the loan.
(9) Minor variations in loan
terms. DEQ may authorize minor variations in financial terms of loans described
in this rule to facilitate administration and repayment of a loan.
(10) Leveraged loans.
(a) DEQ may fund loans with
bond proceeds through a leveraged loan program under the following terms and conditions:
(A) Interest rates will be
less than the interest rate paid by the state on bonds sold to fund the leveraged
loans. Rates will be fixed at 65 percent of the base rate.
(B) Loan fees will be calculated
in accordance with section (6) of this rule.
(C) Notwithstanding other
provisions of this rule, DEQ may make changes to the terms and conditions of a leveraged
CWSRF loan to make it marketable. To the maximum extent practicable, the terms and
conditions will be the same as for direct loans.
(b) Bond issuance and related
transaction costs will be paid out of bond proceeds to the extent permitted by law.
(11) Additional subsidization
(principal forgiveness). DEQ may provide additional subsidization in the form of
principal forgiveness to the maximum extent allowed by the federal capitalization
grant and in accordance with the criteria established in this section. A loan with
principal forgiveness is subject to standard interest rates, fees, and loan terms
as defined in this rule.
(a) Eligibility. Except as
specified in subsection (b) of this section of the rule, the following applicants
are eligible for principal forgiveness:
(A) Applicants that are a
municipality or intermunicipal, interstate, or State agency and meet affordability
criteria as specified in subsection (c) of this section of the rule;
(B) Applicants that are a
municipality or intermunicipal, interstate, or State agency with a project, determined
by DEQ, that implements a process, material, technique, or technology to address
water-efficiency and energy-efficiency goals, to mitigate stormwater runoff, or
to encourage sustainable project planning, design, and construction; or
(C) Applicants that are a
municipality or intermunicipal, interstate, or State agency and that do not meet
the requirements of subsection (a)(A) or (a)(B) in this section of the rule but
have individual ratepayers who will experience financial hardship from a rate increase
resulting from financing a project. Applicants qualifying under this section must
have an established ratepayer hardship assistance program. DEQ will review the applicant’s
ratepayer hardship assistance program for duration and effectiveness.
(b) Ineligible Loans. The
following types of loans are not eligible for principal forgiveness:
(A) Loans for projects that
are not ready to proceed;
(B) Loan agreements that
include incentives such as sponsorship option loans;
(C) Interim loans; and
(D) Planning loans, except
for planning loans for projects described in subsection (a)(B) of this section of
the rule.
(c) Affordability Criteria.
DEQ will use the following criteria to determine affordability, with the most weight
added to subsection (c)(A) of this section of the rule:
(A) Distressed as calculated
by the Oregon Distressed Index using the methodology described in OAR 123-024-0031;
and
(B) Negative population trends
as calculated by the annual American Community Survey.
(d) Additional subsidization
allocation amount. DEQ may allocate or adjust the allocation of principal forgiveness
every federal fiscal year as a percentage of the annual federal capitalization grant,
not to exceed the maximum permitted by the federal allocation regulation. DEQ will
determine the maximum allowable annual percentage allocation of principal forgiveness
from time to time to safeguard the perpetuity of the CWSRF.
(e) Award Amount.
(A) Eligible applicants may
receive principal forgiveness for up to fifty percent of their loan but not to exceed
$500,000.
(B) Applicants may only receive
one principal forgiveness award per project.
(f) Award Reserves.
(A) DEQ will reserve seventy
percent of the principal forgiveness allocation for applicants meeting the affordability
criteria in subsection (a)(A) of this section of the rule.
(B) DEQ will reserve thirty
percent of the principal forgiveness allocation for applicants with projects eligible
under subsection (a)(B) of this section of the rule.
(C) At the close of the federal
fiscal year, DEQ may reallocate any unawarded allocation of principal forgiveness
in one reserve to the other reserve, and if after such reallocation unawarded allocation
still remains, to those borrowers that are eligible under subsection (a)(C) of this
section of the rule.
(g) Loan Term. Applicants
eligible for principal forgiveness under the affordability criteria as specified
in subsection (a)(A) of this section of the rule must take the longest term available
for their loan. All other applicants may choose any term permitted in section (8)
of this rule. A borrower may prepay its loan without penalty.
[ED. NOTE:
Tables referenced are not included in rule text. Click here for PDF copy of table(s).]
Stat. Auth.: ORS 468.020
& 468.440
Stats. Implemented: ORS 468.423
– 468.440
Hist.: DEQ 2-1989, f. &
cert. ef. 3-10-89; DEQ 31-1989(Temp), f. & cert. ef. 12-14-89; DEQ 30-1990,
f. & cert. ef. 8-1-90; DEQ 1-1993, f. & cert. ef. 1-22-93; DEQ 3-1995, f.
& cert. ef. 1-23-95; DEQ 10-2003, f. & cert. ef. 5-27-03; DEQ 3-2010(Temp),
f. & cert. ef. 5-4-10 thru 10-29-10; DEQ 13-2010, f. & cert. ef. 10-27-10;
DEQ 11-2012, f. & cert. ef. 12-14-12; DEQ 9-2015, f. & cert. ef. 10-16-15
Purchase and Refinancing of Debt
Obligation
340-054-0071
Debt Obligation Purchase
DEQ may use the CWSRF to buy a public
agency’s debt obligation subject to all of the following limitations:
(1) The debt was incurred
after March 7, 1985.
(2) The debt obligation does
not exceed 20 years except for a bond purchase as specified in OAR 340-054-0072.
(3) DEQ will not use the
purchase of a debt obligation to refinance a pre-existing CWSRF loan or other debt
obligation except as specified in OAR 340-054-0072(5)(b).
Stat. Auth.: ORS 468.020 & 468.440
Stats. Implemented: ORS 468.423
- 468.440
Hist.: DEQ 2-2014, f. 1-28-14,
cert. ef. 2-3-14; DEQ 9-2015, f. & cert. ef. 10-16-15
340-054-0072
Bond Purchase
(1) Application requirements. All application
requirements for a CWSRF loan as specified in OAR 340-054-0022 apply to a bond purchase
under this rule.
(2) Intended Use Plan and
project priority list. All applications for a bond purchase are subject to IUP and
project priority list development in the same manner as specified in OAR 340-054-0025.
(3) Project ranking criteria.
All applicants for a bond purchase will be ranked based on the point sum from the
criteria specified in OAR 340-054-0026 and 340-054-0027.
(4) Reserves, CWSRF general
fund and project funding. DEQ will allocate reserves and CWSRF general funds for
a bond purchase in the same manner as specified in OAR 340-054-0036.
(5) Requirements for a bond
purchase.
(a) Clean Water Act plans.
DEQ will only purchase a bond whose proceeds are used to finance a project that
is consistent with plans developed under sections 303(e), 319 or 320 of the Clean
Water Act.
(b) Refunding an existing
CWSRF loan or debt obligation is not an eligible use of the proceeds of a bond purchase
for treatment works unless all of the following apply:
(A) All of the following
conditions must be met on February 1, 2014:
(i) The public agency’s
existing CWSRF loan or debt obligation for treatment works is not in default.
(ii) The median household
income in the area that the treatment works of the public agency serves is less
than 70 percent of the statewide median household income.
(iii) The public agency’s
existing CWSRF loan or debt obligation for treatment works has a remaining term
of 10 years or greater.
(iv) The public agency’s
existing CWSRF loan or debt obligation for treatment works does not include any
American Recovery and Reinvestment Act funds or provide for principal forgiveness.
(B) The public agency must:
(i) Submit written confirmation
to DEQ by May 1, 2014 that it intends to refinance its existing CWSRF loan or debt
obligation for treatment works with the proceeds of a bond for treatment works issued
by the public agency and purchased by DEQ; and
(ii) Complete the issuance
and sale of the bond for treatment works by February 1, 2016.
(C) When DEQ purchases a
debt obligation to replace an existing CWSRF loan or debt obligation, the amortization
period of the debt obligation may not exceed the lesser of:
(i) The useful life of the
asset, or
(ii) Thirty years minus the
number of years that the existing CWSRF loan or debt obligation has been in repayment.
(D) The interest rate for
the bond for treatment works DEQ purchases as described in subsection (b) of this
section of the rule is determined under subsection (b) of section (7) of this rule.
(c) Refinancing an interim
loan. A public agency may sell a bond to DEQ to refinance an interim loan or reimburse
itself for self-generated funds used to pay DEQ-approved project costs for treatment
works if the public agency meets the conditions in OAR 340-054-0056(3).
(6) Conditions for bond purchase.
The terms, conditions and requirements set out in OAR 340-054-0060 apply to a bond
purchase.
(7) Bond purchase, terms
and interest rates.
(a) Bonds. A bond DEQ purchases
under this rule must be a revenue bond for a term not to exceed 30 years and meet
the requirements specified in OAR 340-054-0065(2).
(b) Interest rates. OAR 340-054-0065(4)(b)
specifies the base rate for a bond purchase. DEQ will provide the following interest
rates for bond purchases:
(A) For bond purchase agreements
for treatment works executed between February 1, 2014 and January 31, 2016, DEQ
will calculate the interest rates in accordance with Table 3 of this section.
(B) For bond purchase agreements
executed on or after February 1, 2016, interest rates will be calculated in accordance
with OAR 340-054-0065(4)(f)(B).
(c) Interest accrual and
payment. OAR 340-054-0065(5) sets the terms for interest accrual and payment for
bond purchases under this rule.
(d) Annual fee. OAR 340-054-0065(6)
specifies the annual fee for a bond purchase.
(e) Commencement of bond
repayment. OAR 340-054-0065(7) prescribes when a public agency must begin principal
and interest repayment for a bond DEQ purchased under this rule.
(f) Term. A public agency
must fully repay bond purchases under this rule in accordance with a schedule DEQ
prescribes. The term of the bond DEQ purchases under this rule will not exceed 30
years after project completion or the useful life of the asset financed by the bond,
whichever is less.
(g) Minor variations in bond
terms. DEQ may, as OAR 340-054-0065(9) specifies, authorize minor variations in
financial terms of a bond purchased under this rule to facilitate administration
and repayment of the bond.
(h) Principal forgiveness.
DEQ may provide principal forgiveness for a bond purchase in the same manner as
for a loan under OAR 340-054-0065(11).
[ED. NOTE:
Tables referenced are not included in rule text. Click here for PDF copy of table(s).]]
Stat. Auth.: ORS 468.020
& 468.440
Stats. Implemented: ORS 468.423
- 468.440
Hist.: DEQ 2-2014, f. 1-28-14,
cert. ef. 2-3-14; DEQ 9-2015, f. & cert. ef. 10-16-15

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