71st OREGON LEGISLATIVE ASSEMBLY--2001 Regular Session
 
NOTE:  Matter within  { +  braces and plus signs + } in an
amended section is new. Matter within  { -  braces and minus
signs - } is existing law to be omitted. New sections are within
 { +  braces and plus signs + } .
 
LC 925
 
                         House Bill 2149
 
Ordered printed by the Speaker pursuant to House Rule 12.00A (5).
  Presession filed (at the request of Governor John A. Kitzhaber,
  M.D., for Department of Environmental Quality)
 
 
                             SUMMARY
 
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure as
introduced.
 
  Establishes linked deposit program in Department of
Environmental Quality to encourage nonpoint source pollution
control projects and other projects to improve water quality.
Allows department to use moneys in Water Pollution Control
Revolving Fund to finance linked deposits placed with lenders.
Directs department to enter into agreements with lenders to lend
moneys at below-market rates based on linked deposits. Allows
department to use moneys in Water Pollution Control Revolving
Fund to assist other public agencies with loans to private
parties for specified purposes.
 
                        A BILL FOR AN ACT
Relating to Water Pollution Control Revolving Fund; creating new
  provisions; and amending ORS 468.423, 468.429, 468.433 and
  468.440.
Be It Enacted by the People of the State of Oregon:
  SECTION 1.  { + Section 2 of this 2001 Act is added to and made
a part of ORS 468.423 to 468.440. + }
  SECTION 2.  { + (1) There is created within the Department of
Environmental Quality a linked deposit program. Through the
program a linked deposit is placed by the department with a
lender upon agreement of the lender to provide a low-interest
loan to a person seeking to perform a nonpoint source pollution
control project or to design or construct privately owned
treatment works.
  (2)(a) Persons seeking to borrow funds through the linked
deposit program shall apply to the department for certification.
  (b) If the department determines that the project for which
financing is sought will meet the requirements of this section
and any rules adopted by the Environmental Quality Commission
under ORS 468.440, and will improve the water quality of the
state, the department shall certify to a lender that the borrower
is eligible for a linked deposit loan.
  (c) After applying all usual lending standards to determine the
creditworthiness of the borrower, if a lender approves the linked
deposit loan, the department shall, subject to the availability
of funds and the rules established for the linked deposit
program, enter into an agreement under which the amount, term and
 
schedule of payment of principal and interest on the linked
deposit is determined.
  (d) Upon receiving the linked deposit from the department, the
lender shall execute a loan commitment with the borrower.
  (3) A linked deposit is not a pledge of credit of the State of
Oregon and is not a debt of the state. The state is not liable to
any lender for the payment of the principal or interest on a
linked deposit loan except to the extent that the state must
honor any contractual obligations to the lender.
  (4)(a) Moneys deposited through a linked deposit are exempt
from ORS 293.265.
  (b) Moneys deposited and held by a lender under a contract of
deposit shall remain public funds that are subject to the
collateralization requirements of ORS chapter 295.
  (c) Except for the provisions of ORS 279.053, ORS chapter 279
shall not apply to contracts or agreements established under this
section with borrowers or lenders. + }
  SECTION 3. ORS 468.423 is amended to read:
  468.423. As used in ORS 468.423 to 468.440:
  (1) 'Fund' means the Water Pollution Control Revolving Fund
established under ORS 468.427.
   { +  (2) 'Lender' means an insured institution, as defined in
ORS 706.008, that agrees to receive linked deposits from the
Department of Environmental Quality.
  (3) 'Linked deposit' means a deposit that earns income below
the prevailing market rate for equivalent deposits and is placed
by the department with a lender.
  (4) 'Linked deposit loan' means a loan that is provided at a
below-market interest rate to be used for the purpose of
financing nonpoint source pollution control projects or the
design or construction of privately owned treatment works.
  (5) 'Nonpoint source pollution control project' means a project
that incorporates best management practices, on-site systems,
streamflow preservation and augmentation or streambank
modifications.
  (6) 'Person' means an individual, corporation, partnership or
association. + }
    { - (2) - }   { + (7) + } 'Public agency' means any state
agency, incorporated city, county, sanitary authority, federally
recognized Indian tribal government, county service district,
sanitary district, metropolitan service district or other special
district authorized or required to construct water pollution
control facilities.
   { +  (8) 'Streambank modifications' means measures to prevent,
reduce or eliminate water pollution from nondiscrete sources,
including but not limited to fencing, erosion controls and
vegetative cover. + }
    { - (3) - }   { + (9) + } 'Treatment works' means:
  (a) The devices and systems used in the storage, treatment,
recycling and reclamation of municipal sewage or industrial
wastes of a liquid nature, necessary to recycle or reuse water at
the most economical cost over the estimated life of the
works. 'Treatment works' includes:
  (A) Intercepting sewers, outfall sewers, sewage collection
systems, pumping power and other equipment, and any appurtenance,
extension, improvement, remodeling, addition or alteration to the
equipment;
  (B) Elements essential to provide a reliable recycled water
supply including standby treatment units and clear well
facilities; and
  (C) Any other acquisitions that will be an integral part of the
treatment process or used for ultimate disposal of residues
resulting from such treatment, including but not limited to land
used to store treated waste water in land treatment systems prior
to land application.
 
  (b) Any other method or system for preventing, abating,
reducing, storing, treating, separating or disposing of municipal
waste, storm water runoff, industrial waste or waste in combined
storm water and sanitary sewer systems.
  (c) Any other facility that the Environmental Quality
Commission determines a public agency must construct or replace
in order to abate or prevent surface or ground water pollution.
  SECTION 4. ORS 468.429 is amended to read:
  468.429. (1) The Department of Environmental Quality shall use
the moneys in the Water Pollution Control Revolving Fund to
provide financial assistance:
  (a) To public agencies for the construction or replacement of
treatment works.
   { +  (b) To public agencies for the financing of loans to
private property owners to implement nonpoint source pollution
control projects. + }
    { - (b) - }   { + (c) + } For the implementation of a
management program established under section 319 of the federal
Water Quality Act of 1986 relating to the management of nonpoint
sources of pollution.
    { - (c) - }   { + (d) + } For development and implementation
of a conservation and management plan under section 320 of the
federal Water Quality Act of 1986 relating to the national
estuary program.
  (2) The department may also use the moneys in the Water
Pollution Control Revolving Fund for the following purposes:
  (a) To buy or refinance the treatment works' debt obligations
of public agencies if such debt was incurred after March 7, 1985.
  (b) To guarantee, or purchase insurance for, public agency
obligations for treatment works' construction or replacement if
the guarantee or insurance would improve credit market access or
reduce interest rates, or to provide loans to a public agency for
this purpose.
  (c) To pay the expenses of the department in administering the
Water Pollution Control Revolving Fund, to make transfers to the
Water Pollution Control Administration Fund, or to pay other
departmental costs including expenses of the program described in
ORS 468.433 (2).
   { +  (d) To establish a linked deposit program to provide
loans to borrowers to control nonpoint source pollution or to
design or construct privately owned treatment works. + }
  (3) If amounts are advanced to the Water Pollution Control
Revolving Fund from the Pollution Control Fund under ORS 468.220
(1), the department shall transfer from the Water Pollution
Control Revolving Fund to the Pollution Control Sinking Fund
amounts sufficient to pay the bonds that funded the advance.
  SECTION 5. ORS 468.433 is amended to read:
  468.433. (1) In administering the Water Pollution Control
Revolving Fund, the Department of Environmental Quality shall:
  (a) Allocate funds for loans in accordance with procedures
adopted by rule by the Environmental Quality Commission.
  (b) Use accounting, audit and fiscal procedures that conform to
generally accepted government accounting standards { +  and that
ensure that moneys advanced from the Pollution Control Fund under
ORS 468.220 are not used for the linked deposit program + }.
  (c) Prepare any reports required by the federal government as a
condition to awarding federal capitalization grants.
  (d) Seek to maximize the ability of the Water Pollution Control
Revolving Fund to operate on a self-sustaining basis and maintain
a perpetual source of treatment works financing { +  and linked
deposit program financing + }.
  (2) If amounts are advanced to the Water Pollution Control
Revolving Fund from the Pollution Control Fund under ORS 468.220
(1), the department shall develop and administer a program
designed to loan amounts in the Water Pollution Control Revolving
Fund to public agencies, so the loan repayments are sufficient to
pay the bonds that funded the advance, and to further the
policies established in ORS 468.425. In connection with the
program, the department may:
  (a) Establish one or more accounts in the Water Pollution
Control Revolving Fund, make covenants for the benefit of
bondowners regarding the deposit of amounts into those accounts
and the use of amounts in those accounts and pledge or reserve
all or a portion of the amounts in the Water Pollution Control
Revolving Fund to pay bonds issued to fund advances to the Water
Pollution Control Revolving Fund under ORS 468.220 (1).
  (b) Establish requirements for loans made from the Water
Pollution Control Revolving Fund to assure that:
  (A) Adequate funds are available in the Water Pollution Control
Revolving Fund to permit payment of bonds that funded advances to
the Water Pollution Control Revolving Fund; and
  (B) Adequate funds will be available in the Water Pollution
Control Administration Fund to pay for costs of the program and
costs of operating the Water Pollution Control Revolving Fund.
  (c) Exercise any remedies available to the department in
connection with defaults on loans of advanced funds to public
agencies.
  (d) Take any other action reasonably necessary to develop the
program and provide for the payment of bonds issued to fund
advances to the Water Pollution Control Revolving Fund.
  (3) The department may make loans to finance treatment works
that are funded in part from advances or grants to the Water
Pollution Control Revolving Fund, and in part from funds
available under ORS 468.220 (1). These loans may have a blended
interest rate that reflects their different sources of funding,
and repayments of these loans may be allocated proportionally
between the Water Pollution Control Revolving Fund and the
Pollution Control Sinking Fund.
  SECTION 6. ORS 468.440 is amended to read:
  468.440. (1) The Environmental Quality Commission shall
establish by rule policies for   { - establishing - }  loan terms
 { - and - }  { + , + } interest rates for loans  { + and linked
deposits + } made from the Water Pollution Control Revolving Fund
that   { - assure - }   { + ensure + } that the objectives of ORS
468.423 to 468.440 are met and that adequate funds are maintained
in the Water Pollution Control Revolving Fund to meet future
needs. In establishing   { - the policy - }  { +  such
policies + }, the commission shall   { - take into
consideration - }   { + consider + } at least the following
factors:
  (a) The capability of the project to enhance or protect water
quality.
  (b) The ability of a   { - public agency - }   { + borrower + }
to repay a loan.
  (c) Current market rates of interest.
    { - (d) The size of the community or district to be served by
the treatment works. - }
    { - (e) - }   { + (d) + } The type of project financed.
    { - (f) - }   { + (e) + } The ability of the applicant to
borrow elsewhere.
    { - (g) - }   { + (f) + } Whether advances have been made to
the Water Pollution Control Revolving Fund from the Pollution
Control Fund that must be repaid to the Pollution Control Sinking
Fund.
  (2) The commission may establish an interest rate ranging from
zero to the market rate. The term of a loan may be for any period
not to exceed 20 years.
  (3) The commission may adopt rules to implement the program to
loan amounts in the Water Pollution Control Revolving Fund to
public agencies as set forth under ORS 468.433 (2).
 
 
  (4) The commission shall adopt by rule any procedures or
standards necessary  { + or desirable + } to carry out the
provisions of ORS 468.423 to 468.440.
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