Current through Register Vol. 63, No. 9, September 1, 2024
(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.
Stat. Auth.: ORS 183 & ORS 541
Stats. Implemented: ORS
541.730 & ORS
541.770
