3 0 | 2 0 1 7 N O R A A N N U A L R E P O R T NATIONAL OILHEAT RESEARCH ALLIANCE, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2017 AND 2016
NOTE 4 - COMMITMENTS AND CONTINGENCIES
The Alliance has entered into operating lease agreements for office space and a liquid fuels research center. Total rent
expense under these leases was $99,795 and $92,118 for the year ended December 31, 2017 and 2016, respectively.
Future minimum lease payments are as follows for the years ending December 31:
2018 $ 79,729
2019 82,121
2020 84,584
Total $ 246,434
From time to time, the Alliance may receive inquiries from government agencies, because of the nature of its funding
sources. Management does not expect the result of such inquiries to impact the financial information of the Alliance.
NOTE 5 - PROGRAM SERVICES
The NORA Public Law 113-79 places requirements on how the Alliance can spend the assessments it collects. At the
beginning of each year, the Alliance makes an estimate of what total assessments are anticipated to be in the coming
year. Grants are made to state organizations and national campaigns are undertaken based on the estimates. Actual
assessments revenue differ from the estimates. The difference between the estimates and actual assessments are to be
reflected in the grants made in future years. The law establishes strict percentage allocations for program spending and
these percentages are tied to the revenue received from assessments. Management has developed procedures to ensure
these percentages are reflected in budgets and carried forward as appropriate. Variances between the percentages
disclosed in the program descriptions below are descriptive of the current year's operations and management believes
they do not indicate non-compliance with the statute.
Research, Development, and Demonstration
The NORA Public Law 113-79 requires the Alliance to ensure not less than 30 percent of the assessments collected for
each calendar year under the NORA Public Law 113-79 are used by qualified state associations or the Alliance to
conduct research, development, and demonstration activities relating to oilheat fuel, including the development of
energy-efficient heating systems to be placed into the marketplace. This also includes the Alliance, in conjunction with
an institution or organization engaged in biofuels research, to develop consumer education materials describing the
benefits of using biofuels as or in oilheat fuel based on the technical information developed.
In 2017, the Alliance granted or expended $1,909,904 for the research, development, and demonstration program,
including $1,351,442 in grants and spending of past years assessments revenue. The Alliance also budgeted $2,110,000
in additional national spending from 2017 assessments revenue to be spent subsequent to year-end for the research,
development, and demonstration program, making the total for 2017, 30 percent of net assessments revenue.
Additionally, unallocated state rebates of 2017 assessments revenue will be used for the research, development, and
demonstration program.