1. (1) A Qualified Entity shall determine whether an entity with which it enters into an agreement to pass through STIF funds is a Sub-Recipient or a contractor according to the criteria set forth in this rule.

2. (2) A person or entity that receives STIF Formula funds from the Qualified Entity is a contractor if the person or entity's relationship with the Qualified Entity possesses characteristics of a procurement relationship. Characteristics of a procurement relationship may include, but are not limited to, that the person or entity:

   1. (a) Provides the goods and services within normal business operations;
   2. (b) Provides similar goods or services to many different purchasers;
   3. (c) Normally operates in a competitive environment;
   4. (d) Provides goods or services that are ancillary to the implementation of the STIF program;
   5. (e) Is not subject to compliance requirements of a state program as a result of the agreement. However, similar requirements may apply for other reasons;
   6. (f) Is expected to deliver a limited service in conformity with the terms of its contract with the Recipient.

3. (3) The Agency may review a Qualified Entity’s determination that an entity is a contractor during the Agency's compliance site review of the Qualified Entity. If the Agency determines that an entity should have been classified as a Sub-Recipient rather than a contractor, the Qualified Entity shall alter its determination.

   1. (a) If the entity that should have been classified as a Sub-Recipient has an agreement to receive STIF funds for a Project in a STIF Plan with an effective date on or after July 1, 2027, then the Qualified Entity must conduct a review of the entity pursuant to OAR 732-042-0050. The Agency may also issue a compliance finding or exercise remedies under the STIF Plan agreement with the Qualified Entity if necessary.
   2. (b) If the entity that should have been classified as a Sub-Recipient has an agreement to receive STIF funds for a Project in a STIF Plan with an effective date prior to July 1, 2027, then the Qualified Entity must follow the Sub-Recipient Accountability procedures included in its STIF Plan pursuant to OAR 732-042-0015(2)(h) for the entity. The Agency may also issue a compliance finding or exercise remedies under the STIF Plan agreement with the Qualified Entity if necessary.
4. (4) A Qualified Entity is responsible for ensuring that a contractor’s use of STIF funds conforms with all relevant rules, statutes, and the terms of its agreement with the contractor.
5. (5) A Qualified Entity shall include provisions in its contract requiring that a contractor permit the Qualified Entity, Agency, the Secretary of State of the State of Oregon, or their authorized representatives, upon reasonable notice, access to all data and records relating to STIF moneys received and to inspect the Projects financed with STIF moneys including, but not limited to, the financial records, physical premises and Capital Assets used to deliver public transportation services.

Statutory/Other Authority

ORS 184.619, 184.758 & 184.761

Statutes/Other Implemented

ORS 184.751-184.766

History

PTD 2-2026, adopt filed 01/22/2026, effective 01/22/2026