690-090-0040 Closing of the Loan (1) Arrangements for repayment of a loan shall be made by the applicant and the director. (2) The loan contract shall set forth the repayment schedule. The repayment schedule shall: (a) Include the amortization of the principal plus interest and provide for full repayment of the loan within 30 years or the life of the project, from the date of the first payment, whichever occurs first; and (b) Provide for commencement of repayment by the applicant of moneys used for construction and interest thereon not later than two years after the date of the loan contract or at such other time as the director may provide. (3) The loan contract shall be a binding legal document between the applicant and the director stating the terms of the loan including: (a) The purpose of the loan describing the project and location; (b) The amount of the loan and payment schedule; (c) The description of real property to serve as collateral for the loan; and (d) A statement allowing the director to inspect the project to ensure that the developer complies with conditions for which the money was loaned. This shall remain in effect for the length of the contract. (e) Agreement by the borrower to provide all information necessary to conform to the Federal Secondary Market Disclosure Rules or any other federal rules or regulations, including payment of any penalty for noncompliance, and to the full extent permitted by law, payment of compensation to the program for any costs, expenses or liability incurred by the program as a result of the borrower’s noncompliance. (4) In loans to irrigation districts that are effected through the department’s purchase of bonds issued by a district, the loan contract shall: (a) Contain a covenant that the district shall not redeem, call or otherwise retire the purchased bonds prior to the agreement date or dates of maturity without the prior written consent of the director, which the director may grant or withhold at the director’s sole discretion. (b) Contain a covenant by which the district agrees to make, levy and collect annual assessments under ORS 545.381 and other applicable law, and to charge and collect revenues, as applicable, sufficient to pay when due all indebtedness or obligations of the district, including those owed to the department. (c) Require a written opinion of the irrigation district’s legal counsel, addressed to the director, that the district is authorized to make covenants required by this subsection and that the covenants are valid obligations of the district, enforceable in accordance with their terms, subject only to applicable bankruptcy, insolvency, reorganization, moratorium or other laws generally affecting creditor’s rights, by the application of judicial discretion and principles of equity in appropriate cases, and common law and statutes affecting the enforceability of contractual obligations generally. (d) Contain a covenant by which the district expressly waives, as authorized with respect to bonds of the district by ORS 545.683, any requirement that the director shall submit to the district a voucher or accept any performance of the district’s obligations that is different from that required under the bonds and loan contract. (e) Provide that in the case of default or delinquency of the district in the performance of any of its obligations under the bonds and/or loan contract, the director need not make any claim or demand as a condition to the institution of appropriate enforcement proceedings and that the district shall submit to the jurisdiction of the circuit court for the County of Marion in any such action, including but not limited to any application for a writ of mandamus to require the district’s board of directors to make, levy and collect sufficient annual assessments to satisfy the district’s obligations. (5) The loan contract shall include provisions for early prepayment of the loan that are consistent with the terms of the bonds and related bond documents used to fund the loan, comply with the State Treasurer’s debt management policies and do not expose the commission or program to undue risk of financial loss. (6) If the water developer is unable to continue the existing loan contract due to temporary hardship, the director may agree to a modification of the loan contract, at the discretion of the director and within the limitations imposed by statute and bond issue documents. (7) The ownership of a water development project shall not be assigned or transferred without the prior written approval of the director and the loan security filed pursuant to OAR 690-090-0030 shall remain in full force and effect notwithstanding any subsequent assignment or transfer without such prior written approval. The director may, in exchange for granting an assignment or transfer, increase the rate of interest charged on the loans as provided by ORS 541.730. (8) The borrower may not, in any manner, assign, cancel or transfer any interest in any water right associated with the project without the written consent of the director. Statutory/Other Authority: ORS 183 & 541 Statutes/Other Implemented: ORS 541.730 & 541.770 History: WRD 3-1997, f. & cert. ef. 4-15-97 WRD 15-1988, f. & cert. ef. 9-20-88 WRD 8-1986, f. & ef. 6-18-86 WRD 9-1982, f. & ef. 8-9-82 WRD 1-1982, f. & ef. 1-11-82 WRD 1-1978, f. & ef. 2-13-78