Clean Air Improvement Program (CAIP) Guidelines

Summary

OAQDA supports the development of projects that provide beneficial air quality improvements. OAQDA welcomes the opportunity to work with applicants to qualify projects for financing. The CAIP guidelines provide a standardized methodology for project submission, review, and approval. CAIP has been developed as a relaunch for the Program formerly known as the Project Development and Financing Program. With the assistance of our technical, legal, financial and communications advisors, OAQDA is pleased to offer these CAIP Guidelines as a “live” document that will incorporate periodic review and revision to remain relevant to the needs of our constituents statewide. For compliance with OAQDA’s statutory authority, projects are required to meet “air quality facility” project eligibility to qualify for tax exemption and bond issuance. To assist with the submission of projects, included in the table below are details for CAIP program and the application steps, including the evaluation, criteria, monitoring, and reporting requirements. These guidelines provide a common framework; however, the OAQDA retains discretionary authority to make decisions based solely on the statutory purposes stated in Ohio Revised Code Chapter 3706.

Please click on the category below to learn more about each element of the CAIP guidelines, or download the entire program guidelines as a PDF document by clicking here. For general information about this program, please visit our CAIP information page. For any questions or to schedule a meeting with OAQDA staff to explore your project, please email at info@aqda.state.oh.us or by phone at (614) 466-6825. All potential applicants are strongly encouraged to contact OAQDA as early as possible to discuss the eligibility of their project.

Clean Air Improvement Program (CAIP) Guidelines

Per Ohio Revised Code (“ORC”) 3706.01, OAQDA maintains the authority to issue revenue bonds to fund “Air Quality Facilities” as defined in ORC 3706.01(G). The primary purpose of this Program is to support projects that contribute to cleaner air in Ohio by assisting business investment in air quality through the provision of tax exemption and conduit financing for the purchase, construction and/or installation of air quality facilities. It is important to note that while OAQDA will provide an Air Quality Project Certificate pursuant to its statute and these Guidelines, the determination of the amount of real property tax exemption for the Air Quality Facilities, while the Bonds are outstanding, is made by the appropriate county tax officials for the jurisdiction of the project location. OAQDA encourages borrowers to proactively communicate (see Stakeholder Engagement, Section VII.D.) with such tax officials to obtain a full understanding of the tax officials’ application of the property tax exemption.

To apply for financing of eligible projects through OAQDA, developers, small and large businesses, utilities, governments, and institutions can submit an application for review by OAQDA staff for completeness and compliance with the air quality definition per ORC 3706.01 (G). If the application is deemed by OAQDA to be complete and consistent with the legal authority of OAQDA, then it will be evaluated based on the technical, financial, legal, and community economic impacts pursuant to submitted information. To qualify for tax exemption and financing, the submitted facilities must demonstrate the worthiness of the project for consideration by the OAQDA board members. After the presentation to OAQDA board, a decision is made as to whether a project can utilize bond financing through OAQDA and receive the related tax exemption benefits associated with such financings.

OAQDA’s debt issuance process is governed by the Guidelines for Issuance of Bonds as amended and approved originally by the board on October 8, 2019. Subsequent amendments were approved on August 11, 2020. Within these guidelines are general rules and requirements for debt issuance that all debt issued with OAQDA support must adhere to in order to receive the tax and financing benefits associated with the Program’s financings. Please see Appendix B for a copy of these Guidelines for Issuance of Bonds.

OAQDA Financing Process

As a conduit bond issuer, OAQDA qualifies projects for tax exemptions if the projects contribute to better air quality, are deemed Air Quality Facilities by OAQDA, and meet the Program guidelines outlined herein. Property owners, developers, and their representatives may submit applications for projects that are eligible under existing law. Upon review, if the project is approved for financing through OAQDA, the qualifying project components determined to constitute an Air Quality Facility can receive exemption from the following taxes:

A. Sales and Use Tax
All tangible personal property, comprising an Air Quality Facility, that is purchased or acquired specifically for the approved project is exempt from the state and local sales and use tax levied on the transfer or sale of that tangible personal property. The bond must be issued prior to the date of purchase or when the property is acquired for the sales and use tax exemption to be effective. Sales tax rates vary by county as counties are authorized to levy additional, permissive sales taxes. The Air Quality Project Certificate is issued by OAQDA to the property owner and the Ohio tax commissioner for their use in applying the appropriate tax exemption. In most cases, the property owner can provide the Air Quality Project Certificate to their vendors for the eligible equipment and materials to apply the exemption. OAQDA staff and/or the assigned bond counsel can be a resource to address questions. Please also refer to the Ohio Department of Taxation1 and local jurisdiction where purchases will be made for specifics on the sales and use taxes within that jurisdiction.

B. Real Property Tax
Exemption applies to the value of real estate improvement, which is a result of the Air Quality Facility approved by OAQDA and applied to the related portion of property taxes. This exemption is available during a period equivalent to the term of financing for bonds approved by and issued through OAQDA, but only while the bonds are outstanding. OAQDA issues the Air Quality Project Certificate to the property owner, and local county auditor for their use in applying the appropriate tax exemptions. Pursuant to these Guidelines, OAQDA will provide an Air Quality Project Certificate, however, the real property tax exemption is subject to application by the appropriate county tax officials for the jurisdiction of the project location. Agreements between the property owner and local entities for payment-in-lieu-of-taxes, if any, are developed and administered between these parties in mutual agreement, which can accompany the project application when submitted and evaluated by OAQDA. Local community impact is a key factor in the consideration of project applications. The term of financing, which establishes the project eligibility period for real property tax exemption, shall not exceed the useful life of the installed equipment. This is the term that will be provided in the Air Quality Project Certificate issued by OAQDA.

C. Exemption on Interest Paid on Bonds
In addition, the interest paid on the bonds issued by OAQDA will be exempt from Ohio income and certain other taxes and may, under certain circumstances, be exempt from federal income taxes, but only as set forth in the opinion of bond counsel delivered on the date of issuance of the bonds.

OAQDA has developed a matrix which highlights the key areas of evaluation during the application review process. The matrix is meant to highlight the categories (Technical, Financing, Impact, and Accountability) that the OAQDA board has set as the main areas of focus for projects seeking tax exemption and financing assistance through OAQDA. The main categories have subcategories that are addressed in more detail throughout these Guidelines.

Technical Criteria



A two-step process has been established to facilitate the successful submission of complex projects. Applicants are encouraged to contact the OAQDA staff early in their development process to facilitate communication of project details. Please see Appendix J for the Air Quality Facility Application. To address the variety of project types that may qualify as Air Quality Facilities, OAQDA has established the following categories to determine whether a project is simple or complex:

A. Simple Project generally means a project that has fewer improvement measures, has a willing lender ready to participate with the source of capital for the project and will purchase the OAQDA bond as a private placement, and has met other criteria described herein. If the applicant is able to complete the entire requirements sections of the application for its initial submission, then the project will typically be considered simple.

B. Complex Project refers to a project that has a greater number of improvement measures, is working on securing financing or interested in a public offering and needs additional time to meet the criteria described herein before final approval. In addition, applications that require additional engineering and scoping to meet the necessary technical requirements, after their initial submission, will be treated as complex projects for the purpose of OAQDA evaluation.

Complex project applications will be considered through a two-step process:

1) Pre-Application submission will provide information on the basic facility, owner, and project parameters in order to initiate a conversation with OAQDA staff. This step will determine a working understanding between the applicant and OAQDA of the qualifying project components based on generally expected outcomes, prior to a fully scoped engineering of the project. With this understanding, the applicant will have identified the eligible improvements needed to continue with a full engineering analysis AND understanding of a tax impact analysis necessary for engagement with local taxing entities (see Stakeholder Engagement, Section VII.D.). A successful pre-application may facilitate the consideration of an Inducement Resolution by OAQDA to confirm the preliminary approval and agreed upon expectations and terms for the project components, borrower, level of local impact, and other parameters for the Air Quality Facility to be successful. Additionally, information required for full application approval will be identified in this step. The Pre-Application will be comprised of partial information necessary for a full application. Please see Appendix J, Application for identification of items required for Pre-Application submission.

2) Full Application submission will include the fully engineered project scope to prepare the technical details necessary for identification of all expected air quality improvements in compliance with the technical guidelines as discussed herein. In many cases, the pre-application submission can be amended with the outstanding supplemental details in order to reach a complete application for final approval. For example, information on the discussions with impacted local government and identification of the lender(s) shall be submitted at this time. Upon final approval of the full application, OAQDA’s bond counsel will prepare the bond resolution for board consideration to authorize the conduit debt issuance. OAQDA staff will assess and guide applicants on navigating the steps either through the simple or complex process. Based on the status and level of information gathered in the application process, the Executive Director will make the determination for a project’s application to appear on the agenda at an OAQDA Board Meeting for consideration of approval.

Air Quality Facility projects will be considered on a case-by-case basis for the improvements that have not yet been installed. Projects shall receive approval by the OAQDA Board before construction is initiated or completed. However, the Program may allow a “look-back” period of up to 60 days from the date of the OAQDA approval of an inducement resolution. The “look-back” may allow for inclusion of eligible pre-construction expenses consistent with the approved project(s) definition.




1. https://www.tax.ohio.gov/sales_and_use.aspx

The issuance of OAQDA bonds involves a variety of participants to ensure the validity of the bonds issued based on the performance of the project to serve as an air quality facility per Chapter 3706 and as determined by the approval of the OAQDA board members. Having a clear understanding of the role of each person, including advisors and attorneys, is essential to the process and will help make it easier to document and close each bond issue. Please refer to Appendix I, Bond Transaction Financing Team, for an identification of the roles of each participant in the process.

Note: As authorized by the OAQDA board members, the Executive Director serves as the primary and first point of contact for each OAQDA bond issue. The Executive Director may delegate duties to certain participants involved in the process, but is expected to be involved in communications throughout the process and should also be informed as to the progress of the transaction and any issues or problems that may arise. The Executive Director oversees the Financing Team and is its point person.

The Technical Guidelines for the Program are meant to provide a framework that will be used for the technical review and evaluation of applications, including any technical requirements that need to be met by the applicant during the process. The process involves several stages that are aligned with the typical development of projects and are intended to leverage existing information that may be produced for the successful design, construction, commissioning, and operation of projects. All interested parties are encouraged to contact OAQDA regarding their project to identify the best course of action for application submission. Appendices D through H provide detailed Program Technical Requirements that should be consulted to complete project submission requirements.

A. Application Submission
In general, the application submission must provide sufficient information for OAQDA to determine if the project qualifies for financing under these Guidelines. The ultimate decision of whether a project qualifies is the OAQDA Board. To accomplish this, the project must contribute to improved air quality to be deemed an Air Quality Facility by OAQDA. Applications meeting the Program Guidelines are subject to OAQDA review and final approval. Currently, these Guidelines include the following project types:
Appendix D: Whole Building Projects Technical Requirements
Appendix E: New Construction Component Isolation Projects Technical Requirements
Appendix F: Retrofit Component Isolation Projects Technical Requirements
Appendix G: Renewable Energy Generation Projects Technical Requirements
Appendix H: Criteria Pollutant / Greenhouse Gas Reduction / Solid Waste Disposal Projects Technical Requirements: criteria pollutant/greenhouse gas reduction/environmental benefits

B. Project Review
The project review process for a project begins with a code-compliance review of the proposed project to ensure that the project meets the minimum thresholds as described in Section V, C. Once a project successfully completes this stage of the review there is a review of the monitoring plan and other applicable project plans, such as construction and commissioning. Successful completion of all these plans is then followed by reports submitted regarding the construction, commissioning, and occupancy permit. Then, the monitoring plan will commence regarding the project’s performance.

C. Minimum Thresholds
All project applications should address the following minimum thresholds as it relates to the type of project being submitted for consideration, including:

1) Minimum Building Energy Codes. All whole-building projects and component isolation projects (new or retrofit) shall be designed and constructed to exceed the energy efficiency standards adopted by the Ohio Board of Building Standards in rules 4101:1-13-01 and 4101:1-35-01 of the Ohio Administrative Code according to the following standards:

a. Whole Buildings – must achieve a combined 50% energy savings above baseline

b. Component Isolation – must achieve a combined 15% energy savings above baseline (as measured in new or retrofit types) across all individual energy measures. However, each individual energy measure shall exceed existing building energy codes to qualify.

2) Federal Energy Efficiency Standards. New equipment installed in whole-building energy efficiency and component isolation projects (new or retrofit) shall be selected, designed, and constructed in accordance with Federal Energy Efficiency Standards 10 CFR 433.100 and any subsequent amendments.

3) Ohio’s Technical Resource Manual. For all projects, except criteria pollutant reduction projects, applicants should compare estimated energy savings to those published in the 2020 State of Ohio Technical Reference Manuals where appropriate (Ohio 2020a, b, c, d).

4) Criteria Pollutant and / Greenhouse Gas Cost Savings/ Solid Waste Disposal Cost Savings. All projects that provide criteria pollutant or greenhouse gas (GHG) savings are eligible if they meet any applicable federal or state air pollution rule or regulation. Projects are encouraged to exceed these regulations when possible. Because these rules can be complex, it is recommended the applicant verify which rules are applicable by contacting either the Ohio EPA (OEPA) or by utilizing an experienced air pollution consultant.

OAQDA will routinely research and evaluate the effectiveness of projects to reduce harmful air pollutants and greenhouse gases in Ohio. As part of this effort, OAQDA may track the level of tax exemption incentive amounts identified for each project application and benchmark it with available industry data as well as the total performance of projects previously approved by OAQDA. This information will be developed by OAQDA as part of the application process and presented to the OAQDA Board as part of their decision.

D. Measurement & Verification (M&V)

Under these guidelines, all projects approved for and receiving OAQDA bond financing must report the performance of their project in serving as an air quality facility until the OAQDA bonds are no longer outstanding; or until they have otherwise fulfilled their performance requirements in compliance with their Accountability as described in their project specific Bond Purchase Agreement. Details will be described in a monitoring plan agreed upon between the borrower and OAQDA at closing of the financing and included in the bond documentation.

Generally, the project’s performance will be evaluated based on reporting by the applicant through an industry-standard, measurement and verification (M&V) process, as described herein, and may involve multiple steps as the project is developed, constructed and operational. Additional information is provided in Appendices D through H, Technical Requirements.

1) Application Submittal and Review. The M&V Plan will be identified as part of the application process in consultation with OAQDA’s technical reviewer. In general, the application and review process for a project begins with a code-compliance review of the proposed project to ensure that the project adheres to the minimum threshold standards described in Section V, C.

2) M&V Plan Submittal and Review. The review of the M&V Plan by OAQDA precedes the construction of the project because it is necessary to ascertain if and where meters are to be placed in the building (or project), or if whole-building gas and/or electric meters are appropriate for measuring savings, and what energy end-use quantities are to be measured before construction begins. OAQDA will discuss appropriate level of monitoring with the applicant to reach an agreement on the type of reporting required to evaluate the project’s ongoing performance. Generally, energy end-use measurements must align with the simulated energy end-use quantities so the simulation can be used to assist in the project verification process. In addition, adherence to the recommendations in ASHRAE Guideline 14-2014 (ASHRAE 2014) or the Uniform Performance Measurement (UMP) guidelines (UMP 2020) is important to ensure accurate measurement and reporting.

For the criteria pollutant and greenhouse gas savings projects, OAQDA will work with the applicants on appropriate M&V plans based on the type of pollutant, technology, applicable rules or regulations and any involvement of state or local air pollution control agencies. In most cases, OAQDA will coordinate with the OEPA on their similar monitoring efforts as it relates to projects involving air permits or other requirements under their purview. For the solid waste disposal projects, OAQDA will work with the applicant based on evaluation of ongoing environmental benefits and impact.

3) Project M&V Process. This process determines that the data collection efforts are complying with the M&V Plan approved by OAQDA. The review begins before the retrofit or after the new construction or installation is complete and proceeds throughout the project eligibility period. Reported measurements are necessary to ascertain that energy end-use quantities agree with design estimates to assist in the project verification process. In addition, adherence to the recommendations in ASHRAE Guideline 14-2014 (ASHRAE 2014) in the References section and/or the Uniform Performance Measurement (UMP) guidelines (UMP 2020) is important to ensure accurate measurement and reporting.

4) For the criteria pollutant, greenhouse gas savings and solid waste disposal projects if applicable OAQDA will coordinate with the OEPA and local air pollution control agencies to utilize existing methods for monitoring and compliance related to permits for the same project as the method for the verification of project performance. If there is not an ability or necessity to coordinate with OEPA, then OAQDA will review the M&V process and reporting based on details described in the M&V plan for the specific pollutant, technology, and adherence to applicable rules or regulations.

E. Level of Improvement to Air Quality
The level of improvement to air quality depends on the assessment by OAQDA, which is described in the following table.

Table

The Financing Guidelines for the Program provide a framework of available incentives and requirements that will be used to review and evaluate applications. Financial considerations that need to be disclosed by the applicant are:

A. Request for Tax Exemption

As part of the application, projects are required to indicate the dollar amount requested for financing through the Program. As part of the evaluation process, the projected value of tax exemption will be compared with the project components, useful life, costs, and other technical factors identified through the Program Guidelines. Qualified project component costs will determine the amount of financing and Air Quality Project Certificate.

Under this Program, only the costs associated with the Air Quality Facility (purchase of equipment, specific materials, etc.), plus a reasonable portion of the soft costs associated with the Air Quality Facility are eligible for OAQDA bond financing. Aesthetic improvements, beautification, tenant allowances, marketing, parking and driveway areas, and other non-functioning elements of the property may not be considered in the definition of the Air Quality Facility. The final determination of any and all components comprising the Air Quality Facility is made by OAQDA, pursuant to its statutory discretion.

After closing on financing, OAQDA will issue the Air Quality Project Certificates for the final approved Air Quality Facility project as it relates to the tax exemption. The final determination of the property value and attribution of property tax exemption will be made by the local county officials within the county where the project is located.

B. Applicant Financial Viability

The responsibility for determining financial viability of the applicant will reside with the bond investors or direct placement capital provider. OAQDA’s role in the issuance of an Air Quality Project Certificate, and any debt obligation, is not an indication of the underlying applicant’s financial viability. Investors and independent capital providers have their own underwriting criteria, and, other than the terms described in its Guidelines for Issuance of Bonds, OAQDA is not involved in the determination of the creditworthiness of the applicant. Project applicants need to have an underwriter, for bond issuance, or a direct placement capital provider secured prior to submission of their final application. Final applications shall include a financing term sheet or preliminary Bond Purchase Agreement from an underwriter or committed direct placement capital provider. Sources for debt issuance or project finance capital are available through multiple local, regional, and national resources and their identification is outside the scope of OAQDA responsibility.

Political subdivision applicants may be able to submit final applications without a defined underwriter or capital provider as described below, see section “Political Subdivision Exemption.”

C. Review of Project Financing

During the application review process, OAQDA will determine whether they and/or a third-party financial consultant will review sources of capital for overall project (not just portion of project seeking financing through the Program). Applicants will be asked to include their evaluation of benefits received through Program participation relative to tax exemptions derived from (i) sales and use tax exemption, (ii) property tax exemption, and (iii) bond interest tax exemption.

D. Tax Exemption Value

The Air Quality Project Certificate will be issued by OAQDA based upon review and acceptance of applicant’s submitted and approved project components. Completed projects will comprise an eligible Air Quality Facility. The final determination of the property value and attribution of property tax exemption will be made by the local tax officials within the jurisdiction where the project is located.

E. Bond Authorization Value

The maximum principal amount of securities to be authorized will be determined by OAQDA during the review of project costs as they are specifically aligned under current Program Guidelines and approved by bond counsel. Such costs may include eligible costs of issuance of the OAQDA and other service providers. The Ohio Development Services Agency is responsible for allocating tax-exempt volume cap for projects that need it.

F. Political Subdivision Exemption

For political subdivision applicants that wish to utilize a competitive bond approach, an underwriter or direct placement capital provider does not need to be secured prior to submitting the final application. Consequently, political subdivision applicants do not need to include a term sheet or preliminary Bond Purchase Agreement with their final applications. OAQDA and its consultants will assist, at a cost to the applicant, with the competitive bond process including the preparation of bid and legal documents, structuring of the bonds and marketing to potential bidders, among other duties associated with a competitive bond sale.

G. Program Approval and Final Certifications

Any preliminary approvals, feedback, and final certifications will be managed by OAQDA. All applicants will be kept abreast of status and updates communicated within a reasonable time frame. Any specific or additional authorization requirements will be determined by OAQDA and made known to the applicant as soon as possible.

Given the mission of OAQDA and this specific Program, as well as the benefits provided to borrowers, the review process is meant to understand fully the impact(s) that projects have from both an air quality and local economic perspective. As such, the Guidelines for project selection touch upon specific impacts that OAQDA will prioritize when reviewing applications.

A. Location of Project

OAQDA recognizes that Air Quality needs are varied throughout the State. Further, each region and community in Ohio may have different economic priorities to which projects should be aligned. OAQDA encourages applicants statewide to submit proposed projects that exemplify this diversity of air quality needs, as well as representing the broader economic needs within the specific jurisdiction.

B. Potential Role of Air Quality Facility in Community Improvement and Growth

OAQDA will evaluate Air Quality Facility projects based on their role to have a meaningful impact on the community. Local community priorities, planning initiatives, goals or other factors identified and supported by local and/or regional leaders as part of the application are strongly encouraged. Factors may include, but are not limited to, the following:

1) Economic Development initiatives that improve the conditions for businesses to thrive and individuals to enjoy a higher standard of living. The project should complement local, regional, and state economic development incentives and priorities.

2) Community Development aimed at improving quality of life, livability and functionality of distressed areas and neighborhoods, creating private-sector job opportunities, serving unique characteristics and needs of communities where projects will be located.

3) Infill Development of vacant or under-used parcels in areas that are already largely developed or served by existing utility infrastructure.

4) Redevelopment that involves replacing existing development, sometimes with a more intense use and pattern of buildings and infrastructure on sites that are underutilized or not reaching their highest and best use. Redevelopment sites are served by existing infrastructure which may be upgraded as part of new development.

5) State and Community Health Improvement Plans that identify the goals and strategies to address public health priorities, based on assessments of the well-being and health of the community.

C. Statement of Tax Exemption Value

Applicants’ valuation of the tax exemptions available through the Program, and their importance to the overall financing, shall be provided for final approval fulfillment. As stated in Section V.C. above, the applicant shall include their analysis of the tax benefits sought. Additionally, any federal, state, or local incentives applied for and their status of receipt or denial shall be identified as available project resources, to the extent known.

D. Stakeholder Engagement

Since funding through the Program comes with tax benefits to the borrower and foregone additional revenue to local jurisdictions, for a period of time, OAQDA requires notification to affected taxing entities of a pending application. The Application submission and corresponding discussion between the applicant and OAQDA will provide an understanding of the preliminary tax exemption details and identification of impacted local taxing entities. In some cases, there will already have been local agency interaction due to the nature of the project, e.g. PACE. For those that have not already had this interaction, the Stakeholder Engagement Template, in Appendix C should be used for information submission to local taxing entities. OAQDA will determine Air Quality Project Certificate values, however, the local county auditor sets the values for determination of applicable property tax rates. Please see Appendix CAppendix C for a Stakeholder Engagement Template.

The purpose of Accountability Guidelines is two-fold: (1) Provide transparency to our constituent stakeholders, local and state governments, and market participants; (2) Increase project outcome details that provide additional data for future programs and guideline updates.

A. Method and Frequency of Measurement

The project’s performance is based on the technical review of project and project types. The method and frequency of measuring the project benefits will be aligned with the results of the review conducted on the application and all plans submitted during the evaluation process, including ongoing measurement and verification. Before construction begins, OAQDA will work with the applicant to ascertain if and where meters are to be placed in the building (or project), or if whole-building gas and/or electric meters are appropriate for measuring savings, and what end-use energy use quantities are to be measured. OAQDA may also request the use of ENERGY STAR Portfolio Manager as a free industry-standard tool to assist in benchmarking the project’s impact on the building’s performance.

The expectations and terms for each project will be determined based on the outcome of the overall review process, unique characteristics of the project, level of local impact and other applicable factors to be included in the final agreement between project owner, OAQDA and other parties.

B. Reporting Requirements

OAQDA will require at least annual reporting of project performance with specific metrics for evaluating project benefits determined through the review process and defined within the agreement with OAQDA on forms prescribed by OAQDA at closing.

C. Consequences of Non-Performance

Given the benefits associated with the Program, OAQDA is mindful of the need for projects to be accountable for providing the air quality performance benefits outlined in the approved applications. These Guidelines along with the Appendices attached hereto provide a detailed review, and evaluation process prior to approval, along with required M&V for confirmation of ongoing project performance. It is anticipated that projects will perform within a margin of 10% of the originally developed project performance metrics. For projects falling outside of this margin, OAQDA staff and/or authorized consultants will reach out to the Air Quality Facility owner for determination of operational experiences that may be causing the performance disparity. Curing performance shortfalls will be the objective of these discussions; however, OAQDA will have final discretion on the use of non-performance fees charged for project performance that remains unresolved.

Approved applications will provide details for the Bond Purchase Agreement that include performance expectations and M&V metrics used to determine compliance. A project specific schedule of fees will be included in the final transaction documentation, which may include the following: Bond issuance fee, ongoing administrative fee, ongoing M&V fee, and waivable non-performance fees. Non-performance fees will be waived for projects performing within 10% of expectation. However, to the extent that a project is exceeding its 10% non-performance threshold, non-performance fees may be charged based on a scaled schedule, at the discretion of OAQDA. See Appendix A, Fee Schedule.

Bond issuance through this Program will be authorized according to these Guidelines and the OAQDA Guidelines for Issuance of Bonds, as shown in Appendix B. All bonds issued through OAQDA will have ongoing reporting requirements for air quality outcomes, as well as project use of proceeds spend-down reporting.