732-042-0040 Capital Asset Requirements (1) Recipients shall ensure Satisfactory Continuing Control of a Capital Asset purchased or leased in whole or part with STIF funding throughout its useful life or until disposition. (2) Recipients shall inventory Capital Assets purchased or leased in whole or part with STIF moneys. The inventory will include a description of the Capital Asset, date of purchase or lease, purchase price, amount of STIF moneys contributed to the purchase or lease, the source of other funds, the authorized use, the Recipient or Sub-Recipient using the Capital Asset, and the condition of the asset. (a) If Capital Asset is a vehicle, the inventory must include the size of vehicle, the total number of passenger seats, the total number of ADA stations, the total number of seats when all ADA stations are deployed, the current mileage, and its current condition. (b) If Capital Asset is an improvement to real property, such as a facility, building, or transit shelter, the inventory must include the location of the Capital Asset and its current condition. (3) Vehicles may be replaced using STIF funding if: (a) Public Transportation Service Provider holds clear title to the vehicle(s) being replaced. Salvage titles will not be accepted. (b) The vehicle(s) has met the useful life guidelines established by Agency. (c) The vehicle has not been previously replaced. (4) To be eligible to receive STIF Formula Fund moneys to acquire revenue vehicle(s) for the expansion of transit service, a Qualified Entity shall demonstrate in its STIF Plan that the Recipient or Sub-Recipient who will acquire the Capital Asset has committed to continually use the vehicle for the approved purpose for the useful life of the vehicle(s). (5) To be eligible to receive STIF moneys for a real property Capital Asset, such as a transit facility, bus barn, maintenance facility, land, or administration building, a Qualified Entity shall demonstrate in its STIF Plan one or more of the following: (a) Recipient or Sub-Recipient ownership of the property upon which the Capital Asset will be located; (b) Recipient or Sub-Recipient possession of an executed lease agreement for the property location that will be in place for the useful life of the Capital Asset; (c) Recipient or Sub-Recipient possession of an executed lien on the property for the useful life of the Capital Asset; (d) In the case of a Project which will utilize property owned by a local city, county or government, an executed intergovernmental agreement with the property owner guaranteeing ongoing use for the duration of the useful life of the Capital Asset; or (e) In the case of a Project to purchase land, an option to purchase the land identified in the Project. (6) Qualified Entities shall: (a) Establish useful life standards for Capital Assets acquired pursuant to their STIF Plans which meet or exceed the duration of those established by the Agency. (b) Use the Agency's published procedures or substantially similar procedures and ensure that Sub-Recipients use the same procedures for the disposition of Capital Assets acquired with STIF Formula Fund moneys. (c) Retain the net proceeds from a sale or other disposition of a Capital Asset to reinvest in a future STIF Plan capital Project or return the net proceeds to the Agency. Net proceeds are the asset's original value less disposal proceeds, depreciation, and disposal costs. If non-STIF funds were used in the original purchase, then only the proportion representing STIF Formula Fund contribution to the purchase are subject to this rule. (d) Establish written procedures to ensure that a Capital Asset is maintained in safe operating condition. (e) Maintain insurance coverage, or require Sub-Recipients to maintain insurance coverage, that meets or exceeds the standards in ORS 806.070. (f) Ensure that vehicles purchased in whole or in part with STIF Formula Fund moneys are titled with the Oregon Department of Transportation Driver and Motor Vehicle Services Division pursuant to ORS 803.045 and supporting rules, with the Agency listed as the primary security interest holder, subject to the following additional requirements: (A) If the vehicle is registered in the name of a Sub-Recipient receiving the vehicle, and the Sub-Recipient is not a Qualified Entity or Public Transportation Service Provider, then the Qualified Entity or Public Transportation Service Provider must be listed on the vehicle title as the secondary security interest holder. (B) If the vehicle was purchased with federal funds in addition to STIF Formula Fund moneys, and the federal funding source requires the vehicle to be titled otherwise than provided in this rule, then the federal titling requirements prevail. (7) A Recipient shall notify the Agency of the sale, transfer or other disposition of a Capital Asset purchased with STIF Formula Fund moneys and shall report the use of proceeds, if any, from the sale to the Agency. (8) A Recipient may transfer its interest in a Capital Asset to an asset of equal or greater value if the transfer is proposed in a STIF Plan which is approved by the Commission. (9) When the Agency is a security interest holder in a Capital Asset, the Agency may exercise all of the rights provided to a secured lien holder under Oregon law, including without limitation, the ability to take control or possession of the Capital Asset if it determines either: (a) That the asset is not being used for the purpose described in a STIF Plan under which it was funded in whole or part by STIF Formula Fund moneys; or (b) If, during a compliance audit conducted pursuant to OAR 732-040-0015, the Agency determines the asset is not being maintained in a state of good operational repair. (10) A Qualified Entity may file an appeal as described in OAR 732-040-0050 if the Agency takes action under section (9) of this rule with respect to a Capital Asset funded in whole or part by STIF Formula Fund moneys originally distributed to the Qualified Entity. Statutory/Other Authority: ORS 184.619, 184.658 & 184.761 Statutes/Other Implemented: ORS 184.751-184.766 History: PTD 5-2020, amend filed 09/23/2020, effective 09/23/2020 PTD 1-2018, adopt filed 06/26/2018, effective 07/01/2018