OAR 340-178-0030
General Provisions, Interest Rate Payment
(1)
Commercial lending institutions making loans for UST project work may qualify to receive an interest rate payment from the USTCCA Fund.(2)
The interest rate payment shall be paid to the lender quarterly in arrears, and shall equal the difference in finance charges between the borrower’s rate and the lender’s rate. The borrower’s rate shall equal the total finance charges charged to the borrower by the lender during a calendar quarter, including interest on the loan at the rate shown on the reduced interest rate certificate as the borrower’s rate, and interest charged the borrower on any loan fee. The commercial lending institution shall select the method of calculation the lender’s rate from subsection (a) or (b) of this section, and shall notify the Department of the selection prior issuing the loan. Once selected, the lender may not change the method of calculating the lender’s rate. The lender’s rate, as calculated in subsections (a) and (b) of this section, shall be deemed to equal the total finance charges which would have been charged to the borrower during the calendar quarter by the lender, including interest on the loan and any loan fee:(a)
Fixed Rate Option. Under the fixed rate option, the lender’s rate shall remain constant throughout the life of the loan. The lender’s rate shall be an annual rate equal to the sum of the ten-year Treasury constant maturities interest rate for the week immediately preceding the date of the initial note, plus the following:(A)
Three percent (3.0%) for loans with a term which does not exceed four years;(B)
Three and one quarter percent (3.25%) for loans with a term which is more than four years and does not exceed eight years;(C)
Three and three quarter percent (3.75%) for loans with a term which is more than eight years and does not exceed 12 years;(D)
Four and one half percent (4.5%) for loans with a term which is more than 12 years and does not exceed 16 years;(E)
Five and one half percent (5.5%) for loans with a term which is more than 16 years and does not exceed 20 years; or(F)
Six and three quarters percent (6.75%) for loans with a term of exactly 20 years.(b)
Adjusted Fixed Rate Option. Under the adjusted fixed rate option, the lender’s interest rate shall adjust, as provided in this subsection:(A)
For a loan with a term which does not exceed three years, the lender’s interest rate shall be equal to the ten year Treasury constant maturities interest rate for the week immediately preceding the initial date of the loan, plus three percent;(B)
Where a loan has a term of more than three years and does not exceed six years, a new lender’s interest rate shall be calculated by adding three percent to the ten year Treasury constant maturities interest rate for the week immediately preceding the start of the fourth year but in no case shall the lender’s interest rate be more than one percentage point above or below the lender’s interest rate calculated in paragraph (2)(b)(A) of this rule;(C)
Where a loan has a term of more than six years and does not exceed nine years, a new lender’s interest rate shall be calculated by adding three percent to the ten year Treasury constant maturities interest rate for the week immediately preceding the start of the seventh year but in no case shall the lender’s interest rate be more than one percentage point above or below the lender’s interest rate calculated in paragraph (2)(b)(B) of this rule;(D)
Where a loan has a term of more than nine years and does not exceed 12 years, a new lender’s interest rate shall be calculated by adding three percent to the ten year Treasury constant maturities interest rate for the week immediately preceding the start of the tenth year but in no case shall the lender’s interest rate be more than one percentage point above or below the lender’s interest rate calculated in paragraph (2)(b)(C) of this rule;(E)
Where a loan has a term of more than 12 years and does not exceed 15 years, a new lender’s interest rate shall be calculated by adding three percent to the ten year Treasury constant maturities interest rate for the week immediately preceding the start of the 13th year but in no case shall the lender’s interest rate be more than one percentage point above or below the lender’s interest rate calculated in paragraph (2)(b)(D) of this rule;(F)
Where a loan has a term of more than 15 years and does not exceed 18 years, a new lender’s interest rate shall be calculated by adding three percent to the ten year Treasury constant maturities interest rate for the week immediately preceding the start of the 16th year but in no case shall the lender’s interest rate be more than one percentage point above or below the lender’s interest rate calculated in paragraph (2)(b)(E) of this rule;(G)
Where a loan has a term of more than 18 years and does not exceed 20 years, a new lender’s interest rate shall be calculated by adding three percent to the ten year Treasury constant maturities interest rate for the week immediately preceding the start of the 19th year but in no case shall the lender’s interest rate be more than one percentage point above or below the lender’s interest rate calculated in paragraph (2)(b)(F) of this rule.(c)
The ten-year Treasury constant maturities interest rate means the rate of that name as indicated in Federal Reserve statistical release H.15. Federal Reserve statistical release H.15 is released each Monday and is available on the Bloomberg data system. The ten-year Treasury constant maturities interest rate for each week may be obtained from the Department.(3)
A commercial lending institution may be paid for interest if:(a)
The borrower pays the annual rate shown on the reduced interest rate certificate;(b)
The loan is amortized with equal payments over the term of the loan.(c)
The loan maturity date does not exceed 20 years from the initial closing date;(d)
The borrower has received a reduced interest rate confirmation letter; and(e)
The loan applicant or the commercial lending institution has provided the terms of the loan to the Department. The terms of the loan include but are not limited to:(A)
Amount of loan;(B)
The interest rate calculated in section (2) of this rule;(C)
Reduced interest rate to the borrower; and(D)
The term of the loan from the initial note date.(4)
Only one reduced interest rate certificate may be issued to each facility location. Individual tanks at a facility location with multiple tanks are not eligible for a separate interest rate certificate per tank.(5)
Interest rate payments are limited to loans for UST project work where the loan is provided by a commercial lending institution.(6)
An interest rate payment may be paid on loans provided by a commercial lending institution that are not guaranteed by the Department where the borrower has received a reduced interest rate certificate from the Department.(7)
The commercial lending institution shall bill the Department for the interest rate reimbursement each calendar quarter.(8)
An applicant may receive a reduced interest rate certificate at more than one facility location.(9)
An interest rate payment may not be made on grant funds, described in OAR 340, division 175.(10)
The payment of the interest rate reimbursements is subject to monies being allocated and being available from the Underground Storage Tank Compliance and Corrective Action Fund.
Source:
Rule 340-178-0030 — General Provisions, Interest Rate Payment, https://secure.sos.state.or.us/oard/view.action?ruleNumber=340-178-0030.