73rd OREGON LEGISLATIVE ASSEMBLY--2005 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 3046
A-Engrossed
House Bill 3328
Ordered by the House June 6
Including House Amendments dated June 6
Sponsored by Representative WITT; Representatives ANDERSON,
BROWN, BRUUN, BUCKLEY, DALLUM, GARRARD, JENSON, KOMP, KRUMMEL,
LIM, MARCH, ROSENBAUM, SUMNER
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.
Directs State Department of Energy to investigate means to
reduce energy consumption in state-owned or state-funded
buildings and school district buildings.
Requires department to prepare plan for submission to
Seventy-fourth Legislative Assembly for making state-owned or
state-funded buildings and school district buildings more energy
efficient and installing renewable energy systems.
{ - Appropriates moneys from General Fund to department for
preparation of plan. - }
Directs department to encourage public bodies to apply for
funding to implement energy efficiency and renewable energy
projects.
{ - Requires contractors and subcontractors working on
certain energy efficiency and renewable energy projects to
utilize apprenticeship programs and develop relationships with
apprenticeship preparation programs. - }
Expands definition of 'eligible state agency' to include all
public bodies for purposes of statutes relating to small scale
local energy projects.
A BILL FOR AN ACT
Relating to energy projects; creating new provisions; and
amending ORS 470.050, 470.060 and 470.150.
Whereas energy efficiency measures are cost-effective ways to
substantially reduce the utility costs of public agencies and
school districts; and
Whereas investment in energy efficiency projects and renewable
energy projects will reduce the load on existing energy sources,
minimizing power outages and reducing dependency on nonrenewable,
expensive and polluting energy sources during peak demand
periods; and
Whereas an increase in renewable energy development will
jump-start Oregon's transition to renewable energy use, create
local family-wage jobs, reduce emissions that lead to global
warming, improve public health, strengthen energy security,
increase energy dependability and reduce vulnerability to price
spikes due to a volatile energy market; and
Whereas the goal of the State of Oregon is to reduce by 15
percent the energy consumption of state government buildings and
school district buildings by 2015 through energy efficiency and
renewable energy projects; now, therefore,
Be It Enacted by the People of the State of Oregon:
SECTION 1. { + (1) The State Department of Energy shall
investigate cost-effective means of reducing peak load energy
consumption and overall energy use in state-owned or state-funded
buildings and facilities, including school district buildings. In
conducting this investigation, the department shall:
(a) Examine existing energy efficiency and renewable energy
programs and identify underutilized program strategies; and
(b) Perform comprehensive and customized energy audits on
state-owned or state-funded buildings and school district
buildings that will determine where system upgrades should be
made to reduce energy use and realize energy savings, to the
extent that funds are available. The audits shall identify energy
consumption patterns, climatic factors, conditions of existing
energy systems and areas needing energy efficiency improvement.
(2) Based on the results of the department's investigation
under subsection (1) of this section, the department shall
prepare a revenue-neutral plan that describes:
(a) Recommendations for increasing the energy efficiency of and
the use of renewable energy sources;
(b) The maximum amount of renewable energy measures that can be
taken while retaining the revenue-neutral nature of the plan; and
(c) Recommendations for implementing the energy efficiency and
renewable energy measures.
(3) The department shall present the plan to the Seventy-fourth
Legislative Assembly. + }
SECTION 2. { + The State Department of Energy shall encourage
public bodies, as defined in ORS 174.109, to apply for small
scale local energy project loans pursuant to ORS chapter 470 and
to apply for any other state or federal funding available for
projects implementing energy efficiency or renewable energy
measures. + }
SECTION 3. ORS 470.050 is amended to read:
470.050. As used in this chapter, unless the context requires
otherwise:
(1)(a) 'Alternative fuel project' means a fleet of vehicles
that are modified or acquired directly from a factory and that:
(A) Use an alternative fuel including electricity, ethanol,
gasohol with at least 10 percent denatured alcohol content,
hydrogen, hythane, methane, methanol, natural gas, propane or any
other fuel approved by the Director of the State Department of
Energy; and
(B) Produce lower or equivalent exhaust emissions or are more
energy efficient than vehicles fueled by gasoline.
(b) 'Alternative fuel project' may include a facility,
including a fueling station, necessary to operate an alternative
fuel vehicle fleet.
(2) 'Applicant' means an applicant for a small scale local
energy project loan.
(3) 'Committee' means the Small Scale Local Energy Project
Advisory Committee created under ORS 470.070.
(4) 'Cooperative' means a cooperative corporation organized
under ORS chapter 62.
(5) 'Director' means the Director of the State Department of
Energy appointed under ORS 469.040.
(6) 'Eligible federal agency' means a federal agency or public
corporation created by the federal government that proposes to
use a loan for a small scale energy project. 'Eligible federal
agency' does not include a federal agency or public corporation
created by the federal government that proposes to use a loan for
a small scale energy project to generate electricity for sale.
(7) 'Eligible state agency' means a { - state officer, board,
commission, department, institution, branch or agency of the
state whose costs are paid wholly or in part from funds held in
the State Treasury - } { + public body, as defined in ORS
174.109, and any federally recognized Indian tribe + }.
(8) 'Loan' includes the purchase or other acquisition of
evidence of indebtedness and money used for the purchase or other
acquisition of evidence of indebtedness.
(9) 'Loan contract' means the evidence of indebtedness and all
instruments used in the purchase or acquisition of the evidence
of indebtedness. For eligible federal { + agencies + } or { +
eligible + } state agencies { - or municipal corporations that
are tax exempt entities - } , a loan contract may include a lease
purchase agreement with respect to personal property.
(10) 'Loan fund' means the Small Scale Local Energy Project
Loan Fund created by Article XI-J of the Oregon Constitution.
(11) 'Municipal corporation' has the meaning given in ORS
297.405 and also includes any Indian tribe or authorized Indian
tribal organization or any combination of two or more of these
tribes or organizations acting jointly in connection with a small
scale local energy project.
(12) 'Oregon business' means a sole proprietorship,
partnership, company, cooperative, corporation or other form of
business entity that is organized or authorized to do business
under Oregon law for profit.
(13) 'Recycling project' means a facility or equipment that
converts solid waste, as defined in ORS 459.005, into a new and
usable product.
(14) 'Small business' means:
(a) An Oregon business that is:
(A) A retail or service business employing 50 or fewer persons
at the time the loan is made; or
(B) An industrial or manufacturing business employing 200 or
fewer persons at the time the loan is made; or
(b) An Oregon subsidiary of a sole proprietorship, partnership,
company, cooperative, corporation or other form of business
entity for which the total number of employees for both the
subsidiary and the parent sole proprietorship, partnership,
company, cooperative, corporation or other form of business
entity at the time the loan is made is:
(A) Fifty or fewer persons if the subsidiary is a retail or
service business; and
(B) Two hundred or fewer if the subsidiary is an industrial or
manufacturing business.
(15) 'Sinking fund' means the Small Scale Local Energy Project
Administration and Bond Sinking Fund created in ORS 470.300.
(16)(a) 'Small scale local energy project' means:
(A) Any system, mechanism or series of mechanisms located in
Oregon that uses renewable resources including, but not limited
to, solar, wind, geothermal, biomass, waste heat or water
resources to produce energy including heat, electricity and
substitute fuels to meet a local community or regional energy
need in this state;
(B) Any system, mechanism or series of mechanisms located in
Oregon that conserves energy, including energy used in
transportation;
(C) A recycling project;
(D) An alternative fuel project;
(E) An improvement that increases the production or efficiency
of, or extends the operating life of, a system or project
otherwise described in this subsection, including but not limited
to restarting a dormant project. No improvement that is a
hydroelectric project shall exceed five megawatts of electric
generating capacity; or
(F) Any project that falls within the items described in
subparagraphs (A) to (E) of this paragraph that is added to, or
becomes part of, an existing project that falls within the items
described in subparagraphs (A) to (E) of this paragraph, whether
or not the existing project was originally financed under this
chapter, together with any refinancing necessary to remove prior
liens or encumbrances against the existing project.
(b) A small scale local energy project may conserve energy or
produce energy by generation or by processing or collection of a
renewable resource.
SECTION 4. ORS 470.060 is amended to read:
470.060. (1) Any individual who is a resident of Oregon, an
Oregon business, a nonprofit or public cooperative, a nonprofit
corporation, an eligible federal agency, an eligible state agency
{ - , - } { + or + } a public corporation created by the state
{ - or a municipal corporation - } may file with the State
Department of Energy an application to obtain loan funds for a
small scale local energy project as provided in this chapter.
(2) Applications to obtain funds for a small scale local energy
project shall be made in writing on a form prescribed by the
State Department of Energy. Applications submitted to the State
Department of Energy shall:
(a) Describe the nature and purpose of the proposed small scale
local energy project.
(b) State whether any purposes other than energy production,
but consistent with energy production, will be served by the
proposed small scale local energy project, and the nature of the
other purposes, if any.
(c) Include an evaluation of the potential of the small scale
local energy project to meet local community energy needs.
(d) Include an evaluation of the potential environmental
impacts of the small scale local energy project.
(e) State whether any moneys other than those in the loan fund
are proposed to be used for the development of the proposed small
scale local energy project, and whether any other moneys are
available or have been sought for the project.
(f) Describe the source of funds for repayment of the loan
applied for.
(3) A fee of one-tenth of one percent of the amount of the loan
applied for or $2,500, whichever is less, shall be submitted with
each application. In addition, the applicant may be required to
pay for costs incurred in connection with the application that
exceed the application fee and which the Director of the State
Department of Energy determines are incurred solely in connection
with processing the application. The applicant shall be advised
of any additional costs the applicant must pay before the costs
are incurred.
SECTION 5. ORS 470.150 is amended to read:
470.150. Except as provided in ORS 470.155, if the Director of
the State Department of Energy approves the financing of a small
scale local energy project, the director, on behalf of the state,
and the applicant may enter into a loan contract, secured by a
first lien or by other good and sufficient collateral in the
manner provided in ORS 470.155 to 470.210. For purposes of this
section, the interest of the State Department of Energy under a
lease purchase contract entered into with an eligible federal
{ + agency + } or { + an eligible + } state agency { - or a
municipal corporation - } may constitute good and sufficient
collateral. The contract:
(1) May provide that the director, on behalf of the state, must
approve the arrangements made by the applicant for the
development, operation and maintenance of the small scale local
energy project, using moneys in the loan fund for the project
development.
(2) Shall provide a plan for repayment by the applicant to the
sinking fund of moneys borrowed from the loan fund used for the
development of the small scale local energy project and interest
on those moneys used at a rate of interest the director
determines is necessary to provide adequate funds to recover the
administrative expenses incurred under this chapter. The director
shall set the interest rate at an incremental rate above the
interest rate on the underlying bonds. The incremental rate for
projects proposed by an eligible federal agency shall be greater
than the incremental rate charged to any other governmental
borrower. The repayment plan, among other matters:
(a) Shall provide for commencement of repayment by the
applicant of moneys used for project development and interest
thereon not later than two years after the date of the loan
contract or at any other time as the director may provide. In
addition to any other prepayment option provided in a borrower's
loan agreement, the department shall provide a borrower the
opportunity to prepay the borrower's loan, without any additional
premium, by defeasing such loan to the call date of the bond or
bonds funding the applicable loan, or any refunding bonds linked
to the loan, but such defeasance shall occur only if the director
finds that after the defeasance, the sinking fund will have
sufficient funds to make payments required under ORS 470.300 (1).
(b) May provide for reasonable extension of the time for making
any repayment in emergency or hardship circumstances, if approved
by the director.
(c) Shall provide for evidence of debt assurance of and
security for repayment by the applicant considered necessary or
proper by the director.
(d) Shall set forth the period of loan which shall not exceed
the usable life of the completed project, or 30 years from the
date of the loan contract, whichever is less.
(e) May set forth a procedure for formal declaration of default
of payment by the director, including formal notification of all
relevant federal, state and local agencies; and further, a
procedure for notification of all relevant federal, state and
local agencies that declaration of default has been rescinded
when appropriate.
(3) May include provisions satisfactory to the director for
field inspection, the director to be the final judge of
completion of the project.
(4) May provide that the liability of the state under the
contract is contingent upon the availability of moneys in the
loan fund for use in the planning and development of the project.
(5) May include further provisions the director considers
necessary to ensure expenditure of the funds for the purposes set
forth in the approved application.
(6) May provide that the director may institute an appropriate
action or suit to prevent use of the project financed by the loan
fund by any person who is delinquent in the repayment of any
moneys due the sinking fund.
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