1. (1) The Department shall issue a loan guarantee confirmation letter of 80 percent of the loan principal, not to exceed $80,000, to a commercial lending institution for a loan to provide UST project work where:

   1. (a) A loan guarantee certificate has been issued to the loan applicant;
   2. (b) The loan guarantee does not provide a guarantee for work other than UST project work;

   3. (c) The interest rate is fixed and the loan is amortized with equal payments over the term of the loan.

      NOTE: To assure that funds are available from the UST Compliance and Corrective Action Fund (USTCCA Fund) to pay loan guarantees during the life of the loan, it is necessary for most loans to have equal payments over the term of the loan. The Department, however, recognizes that the lending policies may differ between commercial lending institutions and may differ between individual loans, particularly during construction. The Department expects that equal loan payments will start after construction is complete. The Department is willing to consider other loan arrangements and other loan repayment schedules subsequent to the initial loan, such as multiple loans and loan refinancing where USTCCAF monies are available to pay loan guarantees, upon default, in full. Each new loan arrangement may be approved by the Department on a case by case basis. The final maturity date of the loan may not exceed 20 years from the initial note date.

   4. (d) The maturity date of the loan does not exceed 20 years from the initial loan closing date;
   5. (e) The commercial lending institution has approved the loan, subject to receiving the loan guarantee confirmation letter from the Department; and

   6. (f) The loan applicant or the commercial lending institution has provided the terms of the loan to the Department. The terms of the loan shall include but are not limited to:

      1. (A) Amount of loan principal;
      2. (B) Amount and period of payment;
      3. (C) Fixed interest rate; and
      4. (D) The term of the loan from the initial note date.

2. (2) The loan guarantee shall terminate on the first to occur of:

   1. (a) Thirty days after loan maturity date, including all extensions or renewals by the lender or extensions caused by the Department.

      NOTE: For example, if the initial note has a five year maturity date, it’s maturity date may be extended beyond five years, but not past 20 years. The loan guarantee will terminate 30 days after the new maturity date. All of the above rules apply to any extension of the maturity date.

   2. (b) Upon payment of the loan guarantee to the commercial lending institution; or
   3. (c) When the loan guarantee provided by the Department is replaced by a loan guarantee provided by the U.S. Small Business Administration (SBA).

3. (3) The commercial lending institution shall notify the Department promptly when a loan guaranteed by the Department is paid in full or if the guarantee is replaced with a SBA loan guarantee for the same purpose.

   NOTE: Because SBA loans provide a more complete guarantee (SBA guarantees can include costs outside of UST project work and a 90 percent guarantee), the Department encourages transfer of loan guarantees to the SBA. It is expected that the SBA will agree to provide their loan guarantee (takeout the loan) after corrective action and UST construction work is complete, approximately six months after the Department issues the original loan guarantee.

4. (4) The payment of the loan guarantee is subject to monies being allocated and being available from the Underground Storage Tank Compliance and Corrective Action Fund throughout the term of the loan.

Statutory/Other Authority

ORS 466.706 - 466.895 & 466.995

Statutes/Other Implemented

OL 1989 & Ch. 1071

History

DEQ 14-1992, f. & cert. ef. 6-11-92
DEQ 29-1991(Temp), f. 12-18-91, cert. ef. 12-20-91