Current through Register Vol. 63, No. 9, September 1, 2024
Funding for the Community Drinking Water Enhancement and
Protection Fund comes from the General Fund and from Lottery Revenue Bonds.
Eligible costs for each fund source are specified in this section. Lottery
Revenue Bonds shall not be used for loan repayment.
(1) Drinking Water Source Protection Grants
may be applied towards costs related to:
(a)
Acquiring lands from willing sellers for the purposes in ORS
448.370;
(b) Entering into real covenants,
Conservation Easements, or similar agreements for the purposes of ORS
448.370, which are defined as
Protective Instruments in these rules; and
(c) Repaying a loan used to finance a Project
to protect, restore, or enhance lands consistent with OAR 695-048-0100(1)(a) or
(b). If a Project involves the payoff of a Grantee's loan used to finance the
acquisition of a Protective Instrument, and the loan is forgivable in part, the
Grantee cannot be reimbursed by OWEB for the forgiven portion of the
loan.
(2) Use of Lottery
Revenue Bond funds deposited into the Community Drinking Water Enhancement and
Protection Fund may only be applied to a Project for acquisition of Protective
Instruments that include the protection, restoration, or enhancement of lands
for the benefit of drinking water source accomplished through the following: an
estate in fee simple absolute, Conservation Easement, or other legal agreements
drafted to run with the land and survive in perpetuity.
(3) Eligible costs for Projects under OAR
695-048-0100(1)(a) or (b) that are funded with Lottery Revenue Bonds deposited
into the Community Drinking Water Enhancement and Protection Fund must be only
"capital expenditures" for federal income tax purposes as defined by
26 C.F.R. §
1.150-1(b). This term
includes both capitalized and capitalizable expenditures. Eligible costs
include:
(a) The purchase price associated
with the Protective Instrument.
(A) The
purchase price shall be based on an appraisal and review appraisal completed in
accordance with applicable appraisal standards, including the Uniform Standards
of Professional Appraisal Practice for an estate in fee simple absolute and
Conservation Easement acquisitions.
(B) Other methods of substantiating the
purchase price conducted by an independent third-party entity may be accepted
at the discretion of OWEB for all other Protective
Instruments.
(b) The
staff and contractor costs incurred as part of the acquisition process related
to the Protective Instrument. Staff and contractor costs (labor hours) must be
documented and tracked to the Project and capitalizable to the asset.
(c) The cost of due diligence activities
associated with acquisition of the Protective Instrument after the specific
property has been identified and that are capitalizable to the asset, including
appraisal or other method of substantiating the purchase price, environmental
site assessment, survey, title review, consultant fees, and other customary due
diligence activities.
(d) The cost
of baseline inventory preparation documenting the natural and human
characteristics and conditions of the specific property at the time of
acquisition. The cost of the baseline inventory must be capitalizable to the
asset.
(e) Discrete legal costs
incurred by the Water Supplier that are specific to the acquisition of the
asset, and capitalizable to the asset. Legal costs (labor hours) must be
documented and tracked. General in-house legal costs that are related to the
overall management or policy of the entity are not eligible.
(f) Closing fees, including recording and
title insurance costs. Pre-payments, such as those that fund the escrow account
for insurance, taxes, or interest payments, are not eligible.
(g) For the costs in OAR
695-048-0100(3)(a)-(f) to be eligible for reimbursement by OWEB, costs must
have been incurred no earlier than 60 days prior to the issuance of the Lottery
Revenue Bonds.
(4)
Eligible costs for Projects under OAR 695-048-0100(1)(a)-(c) that are funded
with General Funds deposited into the Community Drinking Water Enhancement and
Protection Fund include:
(a) The purchase
price associated with the Protective Instrument.
(A) The purchase price shall be based on an
appraisal and review appraisal completed in accordance with applicable
appraisal standards, including but not limited to the Uniform Standards of
Professional Appraisal Practice for an estate in fee simple absolute and
Conservation Easement acquisitions.
(B) Other methods of substantiating the
purchase price conducted by an independent third-party entity may be accepted
at the discretion of OWEB for all other Protective Instruments.
(b) The interest on bridge loans
needed to close on the Protective Instrument prior to when funding will be
available for distribution through the program.
(c) The staff and contractor costs incurred
as part of the Protective Instrument acquisition process related to the
property.
(d) The cost of due
diligence activities, including appraisal or other method of substantiating the
purchase price, environmental site assessment, survey, title review, consultant
fees, and other customary due diligence activities.
(e) The cost of baseline inventory
preparation documenting the natural and human characteristics and conditions of
the specific property at the time of the acquisition of the Protective
Instrument.
(f) The legal fees
incurred by the Water Supplier related to the Project. General in-house legal
costs that are related to the overall management or policy of the entity are
not eligible.
(g) The closing fees,
including recording and title insurance costs.
(h) The cost of developing a Long-Term
Management Plan to meet program requirements.
(i) Indirect costs of the Grantee, dependent
on available funding.
(j) For the
costs in OAR 695-048-0100(4)(a)-(i) to be eligible for reimbursement by OWEB,
costs must have been incurred no earlier than 18 months before the applicable
Drinking Water Source Protection Grant application deadline.
Statutory/Other Authority: ORS
448.370(7)
Statutes/Other Implemented: ORS
448.370 -
448.380
