Rules; compliance with applicable requirements

(1) The Environmental Quality Commission shall adopt rules necessary to implement ORS 468A.795 to 468A.807. (2) Rules adopted under this section must include, but need not be limited to, rules that establish preferences for awarding grants and loans under ORS 468A.803 (1) based upon: (a) A percentage of diesel engine use in Oregon; (b) Whether a grant or loan applicant will provide matching funds; (c) Whether scrapping, replacement, repowering or retrofitting an engine will benefit sensitive populations or areas with elevated concentrations of diesel particulate matter; or (d) Other criteria as the commission may establish. (3) Rules adopted by the commission under this section must reserve a portion of the financial assistance available each year for applicants that own or operate a small number of diesel engines or Oregon diesel truck engines and must provide for simplified access to financial assistance for those applicants. (4) The Department of Environmental Quality may perform activities necessary to ensure that recipients of grants and loans from the Clean Diesel Engine Fund comply with applicable requirements. If the department determines that a recipient has not complied with applicable requirements, the department may order the recipient to refund all grant or loan moneys and may impose penalties pursuant to ORS 468.140.