123-099-0060 Agreements (1) After approval of an application for a program loan award for a Project and conditional notice, the Department shall promptly begin preparation and negotiation of an Agreement with the Project Sponsor. The Department conducts a financial review on approved applications in accordance with prudent lending practices, including ability to service debt if a forgivable condition default requires a forgivable loan to be repaid. (2) Agreements for program loans: (a) Shall set the maximum amount of financial assistance (loan amount); (b) Include a provision that the obligation of the state under the Agreement is contingent on the availability of moneys in the Industrial Lands Loan Fund for the amount of financial assistance; (c) Shall include a provision that grants the Department a lien on, or a security interest in, collateral to secure repayment of a loan made to the Project Sponsor, in a form and amount determined by the Department; (d) Shall provide the terms for forgiveness if the program loan is a forgivable loan; (e) Shall provide terms for loan repayment by the Project Sponsor, including a schedule of payments of principal and interest and the manner for determining when loan payments are delinquent. If the Department determines a Forgivable Loan fails to meet its conditions for forgiveness, loan repayment shall start on December 1 following such determination; (f) Shall provide terms for repayment of a forgivable loan if the terms and conditions for forgiveness are not met during the term of the loan. Repayment terms may include full repayment and partial repayment obligations, including repayment obligations that are prorated. If a repayment is required, interest shall be imposed on the loan proceeds; (g) Shall provide for a maturity date for the loan. Forgivable loans for project planning may be made for a term not to exceed 3 years after the Agreement execution date. Forgivable loans for development projects may be made for a term of years not to exceed the useful life of the contracted project or up to 10 years after the Agreement execution date, as agreed to by the Department. Repayable loans for development projects may be made for a term of years not to exceed the useful life of the contracted project or 30 years from the date of project completion, whichever is less; (h) Shall set an interest rate and start date for interest accrual on the loan that is determined by the Department at the time of award, based on market conditions for similar debt. The Department shall forgive repayment of accrued interest if the terms of forgiveness for a program forgivable loan are met; (i) May provide for a reasonable extension of the maturity dates provided in the Agreement for making any repayment in emergency or hardship circumstances, if approved by the Department; (j) Shall include an approved budget for allowable costs of Program funds; (k) Shall provide terms for loan proceeds disbursements, which shall be made in compliance with the approved budget, and which may be in a single payment or in multiple, conditional payments. The Project Sponsor must submit each disbursement request for the loan on a Department-provided or Department-approved disbursement request form for Department review and approval. Loan proceeds shall be disbursed to approved Project Sponsors: (A) on an expense reimbursement or costs-incurred basis; or (B) upon Project Sponsor’s request and approval from the Department, loan proceeds may be disbursed as an advanced payment for approved budgeted costs to be incurred. Advanced payments may be for partial or full amounts of budgeted costs. Expenditure reports and invoices shall be required to verify that any advance payments were used for approved allowable costs; (l) Shall provide prevailing rate of wage requirements; (m) Shall provide for a covenant of a term of years for the completed project (not including planning projects) to be directly owned or operated by the Project Sponsor or the subject of a management contract or an operating agreement to which the Project Sponsor is a party; (n) Shall provide for terms of breach and default of the Agreement and remedies for breach or default, including the right to withhold any amounts otherwise due to the Project Sponsor; and (o) Shall contain such other terms and conditions as the Department requires. Statutory/Other Authority: ORS 285A.075 Statutes/Other Implemented: OR Laws 2023 ch. 25 History: OBDD 33-2023, adopt filed 12/20/2023, effective 12/20/2023