Oregon Administrative Rules › Chapter 123 - OREGON BUSINESS DEVELOPMENT DEPARTMENT › Division 99 - Industrial Lands Loan Fund › Section 123-099-0060 - Agreements

Current through Register Vol. 63, No. 7, July 1, 2024
(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.