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DEPARTMENT OF ENERGY

 

DIVISION 110
THE SMALL SCALE LOCAL ENERGY LOAN PROGRAM  

330-110-0005
Purpose, Statutory Authorization, Policy
(1) The purpose
of these rules is to provide procedures for the Small Scale Local Energy Loan Program
and standards and criteria for projects to be met by applicants. These rules are
authorized by ORS 469.040, 470.080 and 470.140.
(2) It is
the goal and policy of the Oregon Department of Energy and the Small Scale Local
Energy Project Advisory Committee that these rules and the loan program:
(a) Encourage
diversity in projects;
(b) Develop
and maintain a loan portfolio that is reasonably balanced across market sectors
and project and borrower types; and
(c) Fund
energy projects that support the Department’s goal for energy efficiency,
generation and security without regard to energy source.
Stat. Auth.: ORS
469 & 470.140

Stats. Implemented:
ORS 470.050 - 470.310

Hist.: DOE
12-1980, f. & ef. 12-16-80; DOE 4-1984, f. & ef. 3-6-84; DOE 2-1986, f.
& ef. 3-4-86; DOE 2-1998, f. & cert. ef. 9-30-98; DOE 7-2004, f. & cert.
ef. 12-20-04; DOE 13-2012, f. & cert. ef. 12-20-12
330-110-0010
Definitions
As used in ORS Chapter 470 and in these
rules, the following definitions apply:
(1) "Adequate security" means
the pledge of real or personal property given to secure a loan against loss or credit
enhancement, guaranty or other security of value authorized by ORS 470.170, given
as assurance that the loan will be paid.
(2) "Alternative fuel project"
means sub-sections (a) and (b):
(a) The purchase of a fleet
of vehicles that are modified or acquired directly from a factory and that:
(A) Use an alternative fuel
including electricity, gasohol with at least twenty percent denatured alcohol content,
hydrogen, hythane, methane, methanol, natural gas, propane, biodiesel or any other
fuel approved by the Director; and
(B) Produce lower exhaust
emissions or are more energy efficient than those fueled by gasoline.
(b) A facility, including
a fueling station, necessary to operate alternative fuel vehicles.
(3) "Alternative Fuel Vehicle
Revolving Fund Program" means the loan program established by Oregon Laws 2013,
chapter 774, sections 1 through 7 for public bodies defined in ORS 174.109 and federally
recognized Indian tribes in Oregon.
(4) "Applicant" means a loan
program applicant.
(5) “Application”
means a completed loan application on a Department-approved form that contains all
required information, is dated and signed by an authorized representative of the
applicant, and is accompanied by the required documentation and the application
and underwriting fees. The term “application” includes all documentation
submitted in conjunction with a loan application, whether at the time of original
submission of the loan application or later and all modifications of the application
that was originally submitted.
(6) "Biomass" means plant
and animal matter, but not fossil fuels.
(7) "Cogeneration" means
the sequential production of electrical or mechanical energy and useful thermal
energy from a primary source including but not limited to oil, natural gas or biomass.
Cogeneration must qualify under the Small Scale Local Energy Loan Program Technical
Requirements.
(8) "Committee" means the
Small Scale Local Energy Project Advisory Committee.
(9) "Conservation measure"
means a system, component of a system, mechanism or series of mechanisms, support
service or combination thereof that:
(a) Reduces the use of energy
at the project site;
(b) Directly avoids the loss
of energy in the transmission of energy;
(c) Conserves energy used
in transportation with the energy savings being substantially in Oregon;
(d) Is a cogeneration project;
or
(e) Increases the production
or efficiency of or extends operating life of a system or project otherwise described
in OAR 330-110-0010, including but not limited to restarting a dormant project.
(10) "Conventional fuels"
means purchased electricity or fossil fuels.
(11) "Creditworthy" means,
in regard to an applicant, able to repay its debts as they become due, as evidenced
by a satisfactory credit history, sufficient financial resources or other indication
of financial strength as approved by the Department.
(12) “Delinquent account”
means a loan that has not been paid in accordance with the terms of the underlying
loan documents.
(13) "Demonstration project"
means a project that showcases new or improved technologies or designs that promise
cost-effective production or conservation of energy if adopted by the marketplace.
(14) "Department" means Oregon
Department of Energy.
(15) "Director" means the
Director of the Department or designee.
(16) "Energy need" means
any of the energy demands forecasted by the Department under ORS 469.070 and the
need to save energy to cut costs.
(17) “Financial feasibility”
means that:
(a) The primary repayment
source for the loan has been identified, the applicant is creditworthy and the project
is financially viable; and
(b) Adequate security is
offered to provide a secondary source of repayment.
(18) "Financial statement"
means a report of a person’s financial operations or condition including but
not limited to balance sheets, statements of financial condition, statements of
financial position, income statements, statement of earnings, statements of revenues
and expenses, statements of profit and loss, statements of operations, statements
of retained income, statements of cash flows, statements of changes in financial
position, pro forma statements, aging reports and any accounting reports, reviews,
audits, tax returns or other financial information submitted as, or as a part of,
a representation of financial condition in a Department approved format using Generally
Accepted Accounting Principles (GAAP).
(19) "Fleet" means two or
more vehicles used for commercial or governmental purposes primarily operated in
Oregon.
(20) "Interim loan" means
a disbursement of a program loan for the purpose of paying for pre-construction
and other approved project costs prior to permanent funding.
(21) "Loan contract" means,
in addition to the meaning set forth in ORS 470.050, the loan agreement and all
other documentation required by the Director to make a loan or change its terms
and conditions.
(22) "Local community or
region" means one or more energy users in Oregon.
(23) "Municipal corporation"
has the meaning assigned to that term by ORS 470.050.
(24) "Person" means a natural
person or a validly existing entity that is duly organized under the laws of a state,
including but not limited to a partnership.
(25) "Preference" means,
in any choice between financially feasible projects or applicants, preference under
ORS 470.080 and these rules.
(26) “Primary repayment
source” means the business revenues produced by the borrower of a loan that
is or will be used to pay the debt service on a loan.
(27) "Program" means the
Small Scale Local Energy Loan Program.
(28) "Project" has the meaning
given to “small scale local energy project” in ORS 470.050; including
systems or devices that implement one or more conservation measures, use renewable
resources to meet a local community or regional energy need in Oregon or are recycling
or alternative fuel projects. The project may produce heat, electricity, mechanical
action or alternative fuels. A project may also be an improvement that increases
the production or efficiency of or extends the operating life of a system or device
or project otherwise described in these rules, including but not limited to restarting
a dormant project. A project also:
(a) Must be primarily in
Oregon but can have a minor contiguous component in a neighboring state, or in the
case of energy conservation the project can provide substantial benefits to Oregon.
The components located in Oregon should exceed 70 percent of the portion of the
project cost financed by the program;
(b) Can directly or indirectly
conserve energy or enable the conservation of energy or use or enable the use of
a renewable resource, by the applicant or another person, to produce energy, as,
for example, power transmission or conditioning, energy storage or smart metering;
and
(c) Can directly or indirectly
reduce the amount of energy needed in the construction and operation of a facility,
including the manufacture and transportation of construction materials, but the
project or components must meet acceptable sustainability practices established
in the Small Scale Local Energy Loan Program Technical Requirements.
(29) "Qualified" means, in
regard to an applicant, able and eligible under the law to apply for a loan and
enter into a loan contract.
(30) "Recycling project"
means a facility or equipment that conserves energy by converting solid waste, as
defined in ORS 459.005, into a new and usable product.
(31) "Renewable resource"
means solar, wind, geothermal, biomass, waste heat or water resource.
(32) "Security value" means
the value assigned by the Department, based upon an internal review or an appraisal
by a qualified third party acceptable to the Department, to the project or security
being offered as collateral for a loan.
(33) "Small business" has
the meaning given in ORS 470.050.
(34) "Small Scale Local Energy
Loan Program Technical Requirements" means the specific technical requirements of
the Department for certain projects. An application will be subject to the Technical
Requirements in effect on the date the Department receives a complete application.
(35) "Usable life" of a project
means the number of years that a project can likely function without major repair
or replacement.
(36) "Waste heat" means produced
but unused heat that can be applied to an energy need.
Stat. Auth.: ORS 469 & 470.140
Stats. Implemented: ORS 470.050
- 470.310
Hist.: DOE 12-1980, f. &
ef. 12-16-80; DOE 2-1981(Temp), f. & ef. 6-3-81; DOE 6-1982, f. & ef. 4-21-82;
DOE 2-1983, f. & ef. 5-16-83; DOE 3-1983(Temp), f. & ef. 9-20-83; DOE 4-1984,
f. & ef. 3-6-84; DOE 2-1986, f. & ef. 3-4-86; DOE 4-1988, f. & cert.
ef. 7-26-88; DOE 1-1991(Temp), f. & cert. ef. 6-10-91; DOE 3-1991, f. &
cert. ef. 12-3-91; DOE 1-1993, f. & cert. ef. 1-27-93; DOE 1-1994, f. &
cert. ef. 4-1-94; DOE 2-1998, f. & cert. ef. 9-30-98; DOE 7-2004, f. & cert.
ef. 12-20-04; DOE 1-2006, f. & cert. ef. 4-3-06; DOE 13-2012, f. & cert.
ef. 12-20-12; DOE 4-2013, f. & cert. ef. 12-12-13
330-110-0012
Small Scale Local Energy Project
Advisory Committee Appointments, Term and Term Limit, Renewal, Member Removal
(1) Committee Appointment Process. As
committee vacancies arise, the department will issue a committee member opening
announcement.
(a) Applicants must complete
an Oregon executive appointments interest form.
(b) The department may conduct
in-person interviews, perform a background check and consult with current committee
members.
(c) An applicant may be invited
to attend a committee meeting.
(d) Department staff will
submit a written recommendation to the director.
(e) The director will consider
the recommendation and make the final determination, in accordance with ORS 470.070(2).
(f) If selected, the director
will issue a signed letter of appointment and the applicant must accept within ten
days.
(2) Committee Member Term;
Term Limit.
(a) A committee member serves
for a four-year term.
(b) A member’s term
starts on the date of appointment and until a successor is appointed and qualified.
(c) No committee member may
serve more than two terms.
(3) Committee Renewal Process.
Upon the recommendation of the committee, the director will review and may reappoint
committee members for a second term.
(4) Committee Member Removal.
The director may remove a committee member for any of the following:
(a) For any cause that is
counter to the interests of the citizens of this state or the goals and mission
of the committee, loan program or department.
(b) Upon missing three scheduled
committee meetings in a 12-month period, the director may remove a committee member.
The department schedules six committee meetings a year.
Stat. Auth.: ORS 469.040 & 470.140
Stats. Implemented: ORS 470.050
- 470.815
Hist.: DOE 2-2014, f. &
cert. ef. 3-7-14; DOE 6-2014, f. & cert. ef. 9-30-14
330-110-0015
Eligible
Costs
Subject to these
rules, a loan may be approved to pay for:
(1) The cost
of buying, building and installing a project;
(2) Audit,
study, commissioning and design costs; and
(3) Reserves,
interest, staff training and site preparation costs.
Stat. Auth.: ORS
469 & 470.140

Stats. Implemented:
ORS 470.080

Hist.: DOE
12-1980, f. & ef. 12-16-80; DOE 6-1982, f. & ef. 4-21-82; DOE 2-1983, f.
& ef. 5-16-83; DOE 3-1983(Temp), f. & ef. 9-20-83; DOE 4-1984, f. &
ef. 3-6-84; DOE 2-1986, f. & ef. 3-4-86; DOE 4-1988, f. & cert. ef. 7-26-88;
DOE 1-1994, f. & cert. ef. 4-1-94; DOE 2-1998, f. & cert. ef. 9-30-98; DOE
7-2004, f. & cert. ef. 12-20-04; DOE 13-2012, f. & cert. ef. 12-20-12
330-110-0016
Ineligible
Costs
(1) Loans funded
from proceeds of tax-exempt bonds may not pay capital costs incurred prior to bond
issuance unless the Department has adopted a reimbursement resolution declaring
an intent to reimburse capital costs that are paid after or no more than 60 days
prior to such resolution.
(2) Except
as allowed in ORS 470.050, the proceeds of a loan may not be used to pay for parts
of a project that are not consistent with energy production using renewable resources
or energy conservation or that do not qualify as an alternative fuel project or
recycling project, or do not meet a sustainability standard set out in the Small
Scale Local Energy Loan Program Technical Requirements, unless the project is found
by the Director to be a demonstration project.
(3) The proceeds
of a loan may only be used to pay for projects or components of a project that have
longer than a 12 month simple payback. For the purposes of this subsection, "component"
means a part of a project that ordinarily saves or produces energy by itself and
that costs more than ten percent of total, estimated project costs.
Stat. Auth.: ORS
469 & 470.140

Stats. Implemented:
ORS 470.080

Hist.: DOE
1-1994, f. & cert. ef. 4-1-94; DOE 2-1998, f. & cert. ef. 9-30-98; DOE 7-2004,
f. & cert. ef. 12-20-04; DOE 1-2006, f. & cert. ef. 4-3-06; DOE 13-2012,
f. & cert. ef. 12-20-12
330-110-0025
Application
(1) The Department
may provide an initial review and advise whether a project appears to qualify for
loan financing by the program. The Department's advice, however, does not constitute
a loan approval or any other binding commitment. The Department requires that an
application be submitted and the required fees be paid if a potential applicant
wishes to apply for a loan after an initial review.
(2) An application
must be made on Department approved forms and in a manner set by the Department.
(3) The Department
may request an applicant's social security number in accordance with provisions
of the Privacy Act of 1974.
Stat. Auth.: ORS
469 & 470.140

Stats. Implemented:
ORS 470.060 & 470.080

Hist.: DOE
12-1980, f. & ef. 12-16-80; DOE 6-1982, f. & ef. 4-21-82; DOE 2-1983, f.
& ef. 5-16-83; DOE 4-1984, f. & ef. 3-6-84; DOE 2-1986, f. & ef. 3-4-86;
DOE 2-1998, f. & cert. ef. 9-30-98; DOE 7-2004, f. & cert. ef. 12-20-04;
DOE 13-2012, f. & cert. ef. 12-20-12
330-110-0030
Application
Review Process
(1) In reviewing
an application for financing by the program, the Department may require an applicant
to submit further documentation to determine whether a loan should be made. If the
Department fails to receive any items requested of the applicant within fourteen
days after making its request in writing, the loan request may be denied. If the
loan request is denied and the applicant still desires to make a loan application,
the applicant must submit a new application and pay again any fees and charges applicable
to loan applications that are described in OAR 330-110-0055.
(2) Application
review and appeal must conform to ORS 470.080 to 470.100 and OAR 330-105.
(3) Loan
approval or denial is communicated to an applicant in writing. A Department issued
approval expires on the expiration date stated in the approval, or if no date is
given, 60 days after the date of the approval. If the loan is not closed prior to
the date the approval expires, an applicant must submit a new application and pay
the fees and charges applicable to a new loan application. Any substantial change,
including but not limited to, a change in financial position, project scope or the
ownership of applicant, prior to the expiration of the approval, may result in the
voiding of the loan approval and require submission of a new loan application.
(4) The Department
may require a third party project and financial feasibility study in form and substance
acceptable to the Department as a condition of approval on a loan. Applicant must
pay the cost of a third party study.
(5) Findings
under ORS 470.090 are for the benefit of the Department for lending purposes only.
They do not endorse the project, its design or its parts. They offer no assurance
of any kind to any person or entity, including the applicant, for any purpose.
Stat. Auth.: ORS
469 & 470.140

Stats. Implemented:
ORS 470.080 - 470.100

Hist.: DOE
12-1980, f. & ef. 12-16-80; DOE 6-1982, f. & ef. 4-21-82; DOE 2-1983, f.
& ef. 5-16-83; DOE 4-1984, f. & ef. 3-6-84; DOE 2-1986, f. & ef. 3-4-86;
DOE 4-1988, f. & cert. ef. 7-26-88; DOE 2-1998, f. & cert. ef. 9-30-98;
DOE 7-2004, f. & cert. ef. 12-20-04; DOE 13-2012, f. & cert. ef. 12-20-12
330-110-0035
Findings
by the Director
(1) To approve an
application for a loan, the Director must make the following findings:
(a) The project
is consistent with preservation and enhancement of the environment. Factors may
include whether the project saves conventional fuel, makes efficient use of a renewable
resource, reduces greenhouse gas emissions or promotes sustainability.
(b) The plan
for the project assures its timely completion, quality and adequate funding. Funding
includes adequate working capital and reserves.
(c) The project
meets the goals of the Department.
(d) The applicant
has certified as part of the application that the applicant is in compliance with
applicable state and local regulations. If requested, the applicant must provide
compliance documentation. Failure to disclose any issues regarding compliance or
any issues of non-compliance may result in denial of an application by the Department.
(e) Any other
findings required by ORS 470.090.
(2) The Director
may deny a loan to any applicant that restricts membership, sales or services on
the basis of any of the protected classes listed in ORS 659A.003.
(3) The Director
may deny a loan because other sources of funding are inadequate.
(4) The Director
may limit the size or number of loans made by the program.
Stat. Auth.: ORS
469 & 470.140

Stats. Implemented:
ORS 470.090

Hist.: DOE
12-1980, f. & ef. 12-16-80; DOE 6-1982, f. & ef. 4-21-82; DOE 2-1983, f.
& ef. 5-16-83; DOE 3-1983(Temp), f. & ef. 9-20-83; DOE 4-1984, f. &
ef. 3-6-84; DOE 1-1985, f. & ef. 1-2-85; DOE 2-1986, f. & ef. 3-4-86; DOE
4-1988, f. & cert. ef. 7-26-88; DOE 1-1994, f. & cert. ef. 4-1-94; DOE 2-1998,
f. & cert. ef. 9-30-98; DOE 7-2004, f. & cert. ef. 12-20-04; DOE 13-2012,
f. & cert. ef. 12-20-12
330-110-0036
Public Health,
Safety, and Environmental Issues
(1) The policy of
the Department is:
(a) To accept
the findings of local, state and federal agencies that license or permit projects
to be built or run; and
(b) To avoid
influencing any of those agencies to approve or deny a license or a permit.
(2) Each
applicant must provide information demonstrating that the proposed project will:
(a) Obtain
each local, state and federal permit and license that applies to a project;
(b) Comply
with the express terms and conditions of each permit and license;
(c) Comply
with all state, federal and local laws and regulations that apply to the project;
and
(d) Obtain
a favorable land use decision from the city or county where the project will be
built.
(3) The Department
may issue a loan approval based on the applicant's representation or promise that
each license and permit has been or will be obtained in a timely manner. If the
applicant fails to obtain any required license or permit in a timely manner, the
Department will revoke the loan or approval.
(4) The licensing
or permitting agency must confirm in writing if any license or permit named in these
rules is not required. Such confirmation is not needed for conservation measures
for which the Department has already confirmed that such a license or permit in
not required.
(5) Waterpower
developers must comply with the following:
(a) A project
on a navigable stream or connecting to a utility must obtain a license or exemption
from the Federal Energy Regulatory Commission;
(b) A license
or permit to use water for power must be obtained from the Water Resources Commission;
and
(c) The requirements
of the Northwest Power and Conservation Council's Columbia Basin Fish and Wildlife
Program.
(6) Geothermal
developers must obtain a geothermal well permit from the Department of Geology and
Mineral Industries or a permit to use ground water from the Water Resources Commission.
(7) Biomass
cogeneration developers must obtain an air contaminant discharge permit, a waste
discharge permit and a solid waste disposal permit from the Department of Environmental
Quality.
Stat. Auth.: ORS
469 & 470.140

Stats. Implemented:
ORS 470.090 & 470.150

Hist.: DOE
1-1985, f. & ef. 1-2-85; DOE 2-1986, f. & ef. 3-4-86; DOE 4-1988, f. &
cert. ef. 7-26-88; DOE 1-1994, f. & cert. ef. 4-1-94; DOE 2-1998, f. & cert.
ef. 9-30-98; DOE 7-2004, f. & cert. ef. 12-20-04; DOE 13-2012, f. & cert.
ef. 12-20-12
330-110-0040
Loan Limits, Security, and Conditions
(1) The Director may limit the term
and amount of any loan or loan approval. The Director may deny any application or
set such terms and conditions in regard to any loan or loan approval as needed to
assure a sound loan or to protect the fiscal integrity of the program.
(2) A loan secured by real
property must be secured by a first lien on such real property in favor of the State
of Oregon and must not exceed eighty percent of the security value of such real
property. The real property that is collateral for the loan must have been appraised
by a licensed appraiser, county assessor or Department appraiser, at the discretion
of the director, no longer than six months prior to the date of the loan approval.
The Department will consider junior liens only on a case-by-case basis.
(3) If a loan to a municipal
corporation will be repaid from project income, the security package for the loan
may include the project income.
(4) A loan to a state agency,
an eligible federal agency or a public corporation may be secured by project income,
in addition to the facility or equipment that make up the project, by a lease purchase
contract or by other income or security in accordance with ORS 470.170. State agencies,
eligible federal agencies or public corporation borrowers must provide resolutions
or other official action of borrower's governing body approving the loan and the
other matters contemplated by the loan documents, and of all other documents evidencing
any other necessary action by Applicant’s governing body.
(5) The Department generally
requires an unconditional and absolute guaranty of the owners or the principal shareholder
of the borrower or that of a person having sufficient resources to satisfy the borrower’s
repayment obligation for the loan should the borrower default.
(6) The Director may consider
savings in operation and maintenance costs in estimating the annual project cost
savings. The Director may also, when calculating the estimated savings in fuel costs,
consider reasonably expected increases in the cost of fuel.
(7) A project that primarily
produces energy for sale must have:
(a) Secure sources of supply
and contracts for the sale of output;
(b) Projected income, net
of operating expenses and maintenance costs, of at least 125 percent of annual debt
service for each year of the loan; and
(c) An identified secondary
source of repayment apart from the project income.
(8) Unless the Director finds
that mitigating financial factors warrant otherwise, a loan to a business for a
project that saves or produces energy for use on site, is an alternative fuel project
or is an energy-saving recycling project may be made only:
(a) Upon an identifiable
and reasonable primary repayment source and the pledge of adequate security;
(b) For less than 80 percent
of the security value of real property on which the Department has a first lien,
the Department will consider junior liens on a case-by-case basis;
(c) To a business that has
made a profit after taxes for at least the two years immediately preceding the loan
application; and
(d) To a business that has
a ratio of current assets to current liabilities of at least 1.75 to 1 and a ratio
of total debt to owner's equity of no more than 2 to 1. The Director may exempt
a business from the requirements of OAR 330-110-0040 if it demonstrates to the satisfaction
of the Director that sound businesses of similar type and size do not normally meet
these standards.
(9) Loan proceeds must be
used for the costs of a small scale local energy project, with the following limitations:
(a) Cost of acquisition of
the project site must not exceed ten percent of the loan amount.
(b) Start-up costs must not
exceed three percent of the loan amount.
(c) Reserves must not exceed
fifteen percent of the loan amount.
(10) The loan proceeds of
an alternative fuel project may only be used for the following purposes:
(a) Incremental costs of
the project that are beyond the reasonable estimated minimum costs to construct
or install a similar project without alternative fuel features. Incremental costs
do not include the cost of equipment or devices that, in standard industry practice,
are used to dispense gasoline or, in the case of vehicles, equipment or devices
that use gasoline and that also allow use of an alternative fuel without modification.
Alternative fueling stations with underground fuel tanks do not qualify for funding
as alternative fuel projects.
(b) In the case of vehicles,
products and installation of such products approved by and meeting or exceeding
the emission standards of the Department of Environmental Quality.
(11) No more than fifty percent
of loan proceeds may be used to refinance existing debt authorized by ORS 470.050(27)(g)
unless such debt is with the Department. The refinancing must result in a significant
increase in the security value of the loan security.
Stat. Auth.: ORS 469 & 470.140
Stats. Implemented: ORS 470.080,
470.120, 470.150 - 470.155, 470.170 & 470.210
Hist.: DOE 12-1980, f. &
ef. 12-16-80; DOE 6-1982, f. & ef. 4-21-82; DOE 2-1983, f. & ef. 5-16-83;
DOE 3-1983(Temp), f. & ef. 9-20-83; DOE 4-1984, f. & ef. 3-6-84; DOE 2-1986,
f. & ef. 3-4-86; DOE 4-1988, f. & cert. ef. 7-26-88; DOE 1-1993, f. &
cert. ef. 1-27-93; DOE 1-1994, f. & cert. ef. 4-1-94; DOE 2-1998, f. & cert.
ef. 9-30-98; DOE 7-2004, f. & cert. ef. 12-20-04; DOE 13-2012, f. & cert.
ef. 12-20-12; DOE 2-2013(Temp), f. & cert. ef. 6-17-13 thru 12-13-13; DOE 4-2013,
f. & cert. ef. 12-12-13
330-110-0042
Bond Refunding
(1) The Department
must pursue opportunities to refund bonds to reduce interest sums paid by the Department.
(a) When
the Department refunds a bond with tax-exempt bonds, the Department must share,
on an equitable basis, the savings from any refunding with the affected borrowers
in an amount consistent with a finding by the Director that the sinking fund has,
and will continue to have, sufficient funds to make payments required under ORS
470.300(1). Affected borrowers are those whose loans were made with the proceeds
of the refunded bonds.
(b) For the
purposes of OAR 330-110-0042(1), savings from a refunding are shared on an equitable
basis if the Department receives half the savings, and the affected borrowers receive
or split half the savings, net of costs, from a bond refunding. When the Internal
Revenue Code or other law limits the amount of refunding savings the Department
may retain or provide to the affected borrowers, the Department may receive less
or more than half the savings, and the affected borrowers will receive the remainder.
If multiple loans were funded from the proceeds of the refunded bonds, the affected
borrowers will share the savings in proportion with their respective shares of the
proceeds of the refunded bonds that were used to make their loans, adjusted for
the remaining term to maturity of their loans.
(2) Savings
from a bond refunding accrue over the remaining term of the refunded bonds. The
Department will share these savings with affected borrowers by reducing the amount
of their loan payments over the remaining term of the loans. If the accumulated
savings over the remaining term of a loan is less than $15,000 or if the Director
finds that it is in the interest of both the Department and the borrowers, the Department
may reduce the principal amount of the loan by the net present value of the savings,
calculated using a discount rate of the maximum arbitrage yield of the refunding
bonds as defined in Section 148 of the Internal Revenue Code.
(3) The Department
must not refund tax-exempt bonds with taxable bonds, unless the Department is able
to share the savings associated with such a refunding with the borrowers whose loans
are linked to such bonds.
(4) At least
120 days before the date on which the Department intends to issue refunding bonds,
the Department must notify each borrower whose loan was made from the proceeds of
the bonds being refunded and must offer the borrower the opportunity to prepay the
borrower's loan. The Department will request that the borrower notify the Department
of its intent to prepay their loan within 60 days of the date of the notification
or risk losing the opportunity to prepay.
[Publications: Publications
referenced are available from the agency.]
Stat. Auth.:
ORS 469 & 470.140

Stats. Implemented:
ORS 470.270

Hist.: DOE
2-1998, f. & cert. ef. 9-30-98; DOE 7-2004, f. & cert. ef. 12-20-04; DOE
1-2006, f. & cert. ef. 4-3-06; DOE 13-2012, f. & cert. ef. 12-20-12
330-110-0045
Waiver, Authority
of Administrator
The Director:
(1) May,
in writing, waive any of these rules. The waiver must serve the aims of the program,
not cause financial damage to the program, and not conflict with ORS chapter 470.
(2) May contract
with regulated financial institutions, state or federal agencies or others to provide
services, subsidies or grants to the program.
(3) May take
such steps as are needed to recover loan funds and prevent their misuse, or to prevent
a project from being diverted from its purposes.
(4) May delegate,
in writing, authority to approve, deny or amend loans and to execute bond and loan
documents. A partial release of lien may be granted by the Director upon the written
request of a borrower if the security value of the remaining security is adequate
to secure the loan and meet the security requirements of OAR 330-110-0040. The Director
will consider the creditworthiness and repayment history of the borrower in considering
such a request.
(5) May contract
with a person to operate a project in the event of any default that results in the
Department taking and running the project.
(6) May settle,
modify or release any person from liability for a loan so long as such action does
not damage the program.
(7) May take
any action allowed by law to comply with federal codes and rules on bonding or to
assure the payment of program bonds.
Stat. Auth.: ORS
469 & 470.140

Stats. Implemented:
ORS 470.080 & 470.150

Hist.: DOE
12-1980, f. & ef. 12-16-80; DOE 6-1982, f. & ef. 4-21-82; DOE 2-1983, f.
& ef. 5-16-83; DOE 3-1983(Temp), f. & ef. 9-20-83; DOE 4-1984, f. &
ef. 3-6-84; DOE 2-1986, f. & ef. 3-4-86; DOE 4-1988, f. & cert. ef. 7-26-88;
DOE 2-1998, f. & cert. ef. 9-30-98; DOE 7-2004, f. & cert. ef. 12-20-04;
DOE 13-2012, f. & cert. ef. 12-20-12
330-110-0046
Loan Amendments
The Department may
amend the terms of a loan in accordance with OAR 330-110-0046.
(1) Amendments
may include but are not limited to amending the interest rate or payment amount
in accordance with a bond refunding, changing payment dates or extending maturity
dates.
(2) A borrower
must request a loan amendment in writing. The request must include a detailed explanation
of the amendment requested with information and documentation by the borrower that
demonstrates the need for the amendment.
(3) When
considering a request for a loan amendment, the Department may require the borrower
to submit information it deems necessary to evaluate the request, such as financial
statements, collateral information and valuation.
(4) The Department
will only approve a loan amendment request if the amendment results in a significant
increase in the security value to the loan security or significantly improves the
borrower’s ability to meet its obligations in regard to the loan.
(5) The borrower
will be notified in writing whether or not the Department will agree to the requested
loan amendment.
(6) Approved
loan amendments are subject to a fee of $300 plus additional charges for items listed
in OAR 330-110-0055. Such charges will be estimated or itemized for the borrower.
Stat. Auth.: ORS
469.040 & 470.080, 470.140

Stats. Implemented:
ORS 470.050 & 470.815

Hist.: DOE
13-2012, f. & cert. ef. 12-20-12
330-110-0047
Loan Forbearance
The Department may
consider forbearance on a loan, but will only consider forbearance if the borrower
is current on its loan payments and is in compliance with the terms of its loan
documents.
(1) If a
borrower is requesting forbearance for its loan, this loan must be current and in
good standing, and have no late charges outstanding, up to and including the date
the forbearance documents are signed.
(2) A borrower
must request forbearance in writing. The request must include a detailed explanation
of the reason for the forbearance request including information and documentation
that demonstrates the need for the forbearance.
(3) When
considering a request for forbearance, the Department may require that the borrower
submit information it deems necessary to evaluate the request, such as financial
statements, collateral information and valuation.
(4) The borrower
will, within thirty days of its request, be notified in writing whether or not the
Department agrees to the loan forbearance request.
(5) The Department
will only approve a forbearance request from a borrower who has submitted a written
plan demonstrating that the temporary suspension or reduction of loan payments will
significantly increase the likelihood of full loan repayment.
(6) The Department
may extend a forbearance agreement beyond the initial forbearance period, if the
circumstances, in the Department’s sole discretion, justify such an extension.
(7) A borrower
requesting forbearance must pay the Department a loan servicing fee that is calculated
on the basis of the borrower’s payment amount and loan balance. Additional
charges may be made for items listed in OAR 330-110-0055(4). Such charges will be
estimated or itemized for the borrower before they are incurred.
(8) Approval
of a forbearance request will not reduce the borrower’s liability to the Department
for the loan.
Stat. Auth.: ORS
469.040 & 470.080, 470.140

Stats. Implemented:
ORS 470.050 & 470.815

Hist.: DOE
13-2012, f. & cert. ef. 12-20-12
330-110-0048
Delinquent
Accounts
Delinquent loans
will be managed in accordance with ORS 470.170 and subject to the Department’s
collection procedures, including but not limited to: (a) written demand, (b) collection
of late fees, (c) acceleration of the amount due, (d) action against a guarantor
or (e) any other legal remedy available to the Department.
Stat. Auth.: ORS
469.040 & 470.080, 470.140

Stats. Implemented:
ORS 470.050 & 470.815

Hist.: DOE
13-2012, f. & cert. ef. 12-20-12
330-110-0055
Fees and
Charges
Pursuant to ORS
470.060, an applicant will pay the Department for costs to review, process and service
a request for a loan. Applicants will pay the following fees and charges:
(1) A non-refundable
application fee as fixed by ORS 470.060. "Application," as used here, includes a
request to assume or transfer or increase an existing loan but does not include
a request for an interim loan made in an application for a permanent loan for a
project. If the Department consults with an applicant on a loan before an application
is submitted the applicant must pay an application fee after the first hour of consultation.
The fee will be applied to the application fee for an application that is submitted
within thirty days of the consultation. If an application is submitted more than
thirty days after the consultation, the applicant must pay a new application fee.
(2) A non-refundable
underwriting fee of $500 or one-half of one percent of the loan request amount,
whichever is greater, but not to exceed $5,000.
(3) A loan
fee of between one and four percent of the loan amount based upon the Director’s
assessment of the risk profile of the project, payable at loan closing.
(4) Charges
for items including, but not limited to credit reports, expert advice, legal fees,
construction inspections, disbursement fees, loan servicing fees and appraisals,
unless charges incurred also benefit another application, in which case the charges
will be divided equitably. Such charges will be estimated or itemized for the applicant
before they are incurred.
(5) A fee
of $500 for each request to release or modify security. Additional charges may be
made for items listed in OAR 330-110-0055(4). Such charges will be estimated or
itemized for the applicant before they are incurred.
(6) The interest
rate set in a binding loan commitment may not be increased without the applicant's
consent except as provided in the loan commitment or the loan documents. The interest
rate for any project proposed by an eligible federal agency must be set in accordance
with ORS 470.150(2). Loan contracts may provide for rates to be adjusted upon issuance
of the bonds whose proceeds fund the loans.
(7) The Department
may offer a fee that combines the fees and charges in OAR 330-110-0055(1) through
(3) and that is equal to or less than the sum of the fees and charges in OAR 330-110-0055(1)
through (3). If offered, a combined fee will apply to any applicant receiving similar
loan terms.
Stat. Auth.: ORS
469 & 470.140

Stats. Implemented:
ORS 470.060 & 470.150

Hist.: DOE
6-1982, f. & ef. 4-21-82; DOE 2-1983, f. & ef. 5-16-83; DOE 4-1984, f. &
ef. 3-6-84; DOE 2-1986, f. & ef. 3-4-86; DOE 4-1988, f. & cert. ef. 7-26-88;
DOE 1-1994, f. & cert. ef. 4-1-94; DOE 2-1998, f. & cert. ef. 9-30-98; DOE
7-2004, f. & cert. ef. 12-20-04; DOE 1-2006, f. & cert. ef. 4-3-06; DOE
13-2012, f. & cert. ef. 12-20-12
330-110-0060
Alternative Fuel Vehicle Revolving
Fund Program; Loan Terms
(1) The department will use the moneys
from the Alternative Fuel Vehicle Revolving Fund to provide loans to private entities
as defined in ORS 469.960, public bodies defined in 174.109 and federally recognized
Indian tribes in Oregon and may use the moneys to pay for the department’s
expenses in administering the Alternative Fuel Vehicle Revolving Fund, Alternative
Fuel Vehicle Revolving Fund Program and related costs.
(2) As defined in ORS 469.960
to be eligible for this loan program, private entities must operate a fleet of motor
vehicles that are based in an area described in 468A.390 or 815.300 and must not
hire fleet drivers who qualify as independent contractors, as defined in 670.600.
(a) The department may use
the address on the vehicle titles, the area the vehicles are operated the majority
of time and other evidence of primary usage location to determine the fleet’s
base. Section (2) does not apply to public bodies or tribes.
(b) Eligible private entities
must certify, on the application form, stating they do not hire fleet drivers who
qualify as independent contractors.
(3) The loans may not be
used for the full purchase or any expense not related to the alternative fuel vehicle
project. Loans must be used to:
(a) Assist in the purchase
of new alternative fuel vehicles by providing funding for the incremental cost of
purchasing alternative fuel vehicles that exceeds the cost of purchasing vehicles
that are not alternative fuel vehicles; or
(b) Convert or modify existing
vehicles that use gasoline or diesel to alternative fuel vehicles. A conversion
or modification of a motor vehicle must include at least one eligible alternative
fuel as described in OAR 330-110-0060(4).
(4) Alternative fuel vehicle
means:
(a) A motor vehicle, as defined
in ORS 801.360;
(b) That is manufactured
or modified to use an alternative fuel, including but not limited to electricity,
biofuel, gasohol with at least 20 percent denatured alcohol content, hydrogen, hythane,
methane, methanol, natural gas, propane or any other fuel approved by the department;
(c) That produces lower exhaust
emissions or is more energy efficient than equivalent equipment fueled by gasoline
or diesel;
(d) Registered in Oregon
in accordance with ORS 803; and
(e) If a conversion or modification,
new equipment is installed by a qualified technician that is compliant with Environmental
Protection Agency or California Air Resources Board standards.
(5) The terms and interest
rate for these loans will be established by the department to recover the administrative
cost of this loan program and to maintain a perpetual source of funding for the
Alternative Fuel Vehicle Revolving Fund Program. A loan must be fully amortized
not later than six years after the purchase of the new alternative fuel vehicle
being financed by the loan or the conversion of a vehicle that uses gasoline or
diesel to an alternative fuel vehicle.
(6) The department will convene
a review committee to review and prioritize loans, as needed.
(7) The department may list
the evaluation criteria for prioritizing loan applications. The department will
give priority to loans for conversions or modifications. The additional criteria
the department may consider for each vehicle covered by the application include,
but are not limited to:
(a) Fuel displacement capacity,
(b) Geographical area or
local economic conditions of the home base,
(c) Accelerated repayment
schedule,
(d) Age of the vehicle,
(e) Estimated annual mileage,
(f) Gross weight of the vehicle,
and
(g) Emissions.
(8) A loan application must
be made on department approved forms and in a manner set by the department. An applicant
must designate the Alternative Fuel Vehicle Revolving Fund Program in the purpose
section of the application and include the required fees. For each vehicle covered
by the application, the application must include information needed for prioritization
in OAR 330-110-0060(6) plus the following information:
(a) Vehicle Identification
Number;
(b) Vehicle make, model,
year and description;
(c) Current odometer reading;
(d) Name of titled owner;
(e) Gross vehicle weight;
(f) Fuel economy;
(g) Estimated annual mileage;
(h) Borrowing authority;
(i) Loan repayment information,
identifying the dedicated source of revenue for repayment purposes; and
(j) Any other information
requested by the department.
(9) Submitting a loan application
does not guarantee the department will provide a loan to the applicant.
(10) The proceeds of loans
made from the Alternative Fuel Vehicle Revolving Fund may be used for purchases
or conversions as described in OAR 330-110-0060(2) no more than 60 days prior to
the department receiving the loan application.
(11) No one borrower may
obtain a loan for greater than 30 percent of the total available, uncommitted funds
in the Alternative Fuel Vehicle Revolving Fund. The department may adjust the allowed
percentage for a borrower based on program usage. The department may also set a
maximum aggregate amount of all loans outstanding that a single public entity or
tribe may have under the Alternative Fuel Vehicle Revolving Fund.
(12) Loans made from the
Alternative Fuel Vehicle Revolving Fund will be subject to the department’s
underwriting standards and the requirements in OAR Chapter 330, division 110. Loans
require final approval by the Director.
(13) Pursuant to ORS 469.964
as amended by Oregon Laws 2014, chapter 38, section 4, the department may charge
fees for Alternative Fuel Vehicle Revolving Fund loan applications. Applicants will
pay the following fees and charges:
(a) For loan amounts of $100,000
or more:
(A) A non-refundable application
fee of 0.1 percent of the amount of the loan applied for up to $2,500.
(B) A non-refundable underwriting
fee of $500 or 1.5 percent of the loan request amount, whichever is greater, but
not to exceed $10,000.
(C) Charges for items including,
but not limited to credit reports, expert advice, legal fees, construction inspections,
disbursement fees, loan servicing fees and appraisals, unless charges incurred also
benefit another application, in which case the charges will be divided equitably.
Such charges will be estimated or itemized for the applicant before they are incurred.
(b) For loan amounts up to
$100,000, refer to the department’s Loan Fee Chart for a fee that combines
the fees and charges described in this section and that is equal to or less than
the sum of the fees and charges described in this section.
(c) A charge for the cost
of each request to release or modify security.
(14) An Alternative Fuel
Vehicle Revolving Fund borrower must report, on an annual basis for the term of
the loan, the following:
(a) Miles driven,
(b) Amount of fuel consumed,
and
(c) Other data as described
in the loan agreement.
Stat. Auth.: ORS 469.040 469.963 &
469.966
Stats. Implemented: ORS 469.960
- 469.966
Hist.: DOE 4-2013, f. &
cert. ef. 12-12-13; DOE 7-2014, f. 10-10-14, cert. ef. 1-1-15

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