Current through Register Vol. 24-06, March 15, 2024
(1)
Purpose. The purpose of
oversight remedial action loans is to supplement local government funding and
funding from other sources to meet the recipient share requirements for
oversight remedial action grants under WAC
173-322A-320. The loans are
intended to encourage and expedite the cleanup of hazardous waste sites and to
lessen the impact of the cleanup cost on ratepayers and taxpayers.
(2)
Types of loans. There are
two different types of oversight remedial action loans, a standard loan and an
extraordinary financial hardship loan. The two types of loans have different
project eligibility requirements and different terms and conditions for
repayment based upon the applicant's ability to repay the loan.
(a)
Standard loan. A standard
loan is a loan that includes the terms and conditions for repayment.
(b)
Extraordinary financial hardship
loan. An extraordinary financial hardship loan is a loan that includes
deferred terms and conditions for repayment. Deferred terms and conditions may
not be indefinite. Any such loan must be approved by the director or
designee.
(3)
Project eligibility. For the purposes of this loan, a project
consists of remedial actions conducted under an order or decree at a single
hazardous waste site. A project may extend over more than one biennium. To be
eligible for a loan, a project must meet all of the following requirements:
(a) The applicant must have an oversight
remedial action grant for the project under WAC
173-322A-320; and
(b) The applicant must demonstrate the
following to the department's satisfaction. The department may require an
independent third-party financial review to support the demonstration:
(i) For a standard loan, the applicant's
financial need for the loan and ability to repay the loan; or
(ii) For an extraordinary financial hardship
loan, the applicant's financial need for the loan, inability to repay the loan
under present circumstances, and ability to repay the loan in the
future.
(4)
Funding priority. The department will assign an oversight remedial
action loan the same priority as the associated oversight remedial action
grant.
(5)
Application
process.
(a)
Project
solicitation. Biennially, the department will solicit project proposals
from local governments to develop its budget and update its ten-year financing
plan for remedial action grants and loans. The department may update its
ten-year financing plan as needed during the biennium. Project proposals must
be submitted on forms provided by the department and include sufficient
information to make the determinations in (c) of this subsection. For
multibiennial projects, proposals must be updated biennially. To be considered
for inclusion in the department's budget for remedial action grants and loans,
project proposals and updates should be submitted by the dates published by the
department.
(b)
Application
submittal. Applications must be submitted on forms provided by the
department and include sufficient information to make the determinations in (c)
and (d) of this subsection. For multibiennial projects, an application must be
submitted before each biennium for which additional funds are requested.
Completed applications should be submitted by the dates published by the
department.
(c)
Project
evaluation and ranking. Project proposals and applications will be
reviewed by the department for completeness and evaluated to determine:
(i) Project eligibility under subsection (3)
of this section. If the department determines the applicant meets the
eligibility requirements for an extraordinary financial hardship loan, then the
department may, upon the approval by the director, provide such a loan to the
applicant instead of a standard loan; and
(ii) Funding priority under subsection (4) of
this section.
(d)
Agreement development. The department will make funding decisions
only after funds have been appropriated. After deciding to fund an eligible
project, the department will negotiate with the applicant the scope of work and
budget for the loan and develop the agreement. The department will consider:
(i) Funding priority under subsection (4) of
this section;
(ii) Cost eligibility
under subsections (6) and (7) of this section;
(iii) Allowable funding under subsection (8)
of this section; and
(iv)
Availability of state funds and other funding sources.
(e)
Fund management. The
department may adjust funding levels or fund additional eligible projects
during a biennium if additional funds should become available.
(6)
Cost eligibility.
The eligible costs for oversight remedial action loans shall be the same as the
eligible costs for oversight remedial action grants under WAC
173-322A-320(5).
(7)
Retroactive cost
eligibility. The eligibility of retroactive costs for oversight remedial
action loans shall be the same as the eligibility of retroactive costs for the
oversight remedial action grants under WAC
173-322A-320(6).
(8)
Funding by department. The
department may provide the recipient of an oversight remedial action loan for
up to one hundred percent of the recipient share under WAC
173-322A-320(7)(b).
The loan shall be used by the recipient to supplement local government funding
and funding from other sources to meet the recipient share
requirement.
(9)
Repayment by
recipient. The terms and conditions for repayment of a loan shall be
specified in the loan agreement.
(a)
Standard loans. For a standard loan, the following terms and
conditions shall apply. Additional terms and conditions may be specified in the
loan agreement.
(i)
Repayment periods
and interest rates.(A) If the
repayment period is less than or equal to five years, the interest rate shall
be thirty percent of the average market rate.
(B) If the repayment period is more than five
years and less than or equal to twenty years, the interest rate shall be sixty
percent of the average market rate.
(ii)
Interest accrual. Interest
shall accrue on each disbursement as it is paid to the recipient.
(b)
Extraordinary financial
hardship loans. For an extraordinary financial hardship loan, the
repayment terms and conditions specified in (a) of this subsection may be
adjusted or deferred. Deferred terms and conditions are dependent on periodic
review of the recipient's ability to pay. Terms and conditions may not be
deferred indefinitely.