US Laws, Codes, Statutes & Cases

Chapter 285B — Economic Development II

 

2005 EDITION

 

 

ECONOMIC DEVELOPMENT II

 

ECONOMIC DEVELOPMENT

 

BUSINESS DEVELOPMENT PROJECTS

 

285B.050  Definitions for ORS 285B.050 to 285B.098

 

285B.053  Borrowing money from Oregon Business Development Fund for projects

 

285B.056  Evaluation of project; fee

 

285B.059  Conditions for commission approval of project; preferences; limits

 

285B.062  Agreement for project loan; required provisions; interest rate; discount for early repayment

 

285B.065  Loans in distressed areas exempt from requirements of ORS 285B.059 and 285B.062

 

285B.068  Payment of moneys for project; applicant to pay percentage of loan principal to Oregon Business Development Fund

 

285B.071  Authority to obtain moneys to repay fund

 

285B.074  Contract for loan service; fee

 

285B.077  Report required

 

285B.080  Director as agent; limitation on authority

 

285B.083  Use of refinancing and other financial assistance

 

285B.086  Authority to lend funds for joint governmental projects or match money; form of loan application; loan limit

 

285B.089  Loan contract; required provisions

 

285B.092  Oregon Business Development Fund; uses

 

285B.093  Oregon Targeted Development Account; purpose

 

285B.095  Retention and use of payments, receipts and interest

 

285B.098  Status of loan to county or municipality

 

SMALL BUSINESS DEVELOPMENT

 

(Generally)

 

285B.120  Oregon Small Business Development Act

 

285B.123  Policy

 

(Capital Access for Small Businesses)

 

285B.126  Definitions for ORS 285B.126 to 285B.147

 

285B.129  Policy

 

285B.132  Contracts with financial institutions for capital access; contents of contract; status of information

 

285B.135  Loss reserve accounts; limitations on amount

 

285B.138  Enrollment of qualified loan in program; procedure; fee; transfers to loan reserve account

 

285B.139  Definitions; rules; exception to minimum amount required for transfer to loss reserve account

 

285B.141  Claims for reimbursement of losses; amounts subject to reimbursement

 

285B.144  Financial report of Capital Access Fund

 

285B.147  Capital Access Fund; use; investment earnings; administrative expenses

 

285B.150  Transfers to Capital Access Fund when insufficient funds available

 

(Local Business Development)

 

285B.159  “Local business development fund” defined

 

285B.162  Coordination of marketing and finance programs

 

(Small Business Development Center)

 

285B.165  Purpose of ORS 285B.165 to 285B.171

 

285B.166  “State university” defined for ORS 285B.165 to 285B.171

 

285B.168  Grants; application; authorized recipients and uses; eligibility

 

285B.171  Short title

 

(Miscellaneous)

 

285B.174  Programs to assist businesses in procuring government contracts and grants

 

MICROENTERPRISE DEVELOPMENT

 

285B.178  Definitions for ORS 285B.178 to 285B.183

 

285B.179  Policy

 

285B.183  Biennial report

 

285B.186  Short title

 

CREDIT ENHANCEMENT FUND

 

285B.200  Definitions for ORS 285B.200 to 285B.218

 

285B.203  Legislative findings; purpose

 

285B.206  Duties of department under ORS 285B.200 to 285B.218; rules

 

285B.209  Fees and terms for loan and credit guarantees for program under ORS 285B.206 and under ORS 285B.200 to 285B.218

 

285B.212  Commission to advise and make recommendations to department concerning specified programs

 

285B.215  Credit Enhancement Fund; sources; uses

 

285B.218  Pledge to assure repayment of loans or other credit

 

REGIONAL ECONOMIC DEVELOPMENT

 

285B.230  Definitions for ORS 285B.230 to 285B.269

 

285B.233  Legislative finding; purpose

 

285B.236  Guidelines for regional investment strategies

 

285B.239  Required elements of regional investment strategies

 

285B.242  Adoption of regional investment strategies; regional boards; hearing; review; approval

 

285B.245  Governor to adopt investment strategy; modification; coordination with other economic development efforts

 

285B.248  All counties to be included in region

 

285B.254  Rural Investment Fund

 

285B.257  Rural action plans; distribution of Rural Investment Fund to implement plans; biennial reports; prohibited uses of fund; rules

 

285B.260  Regional Investment Fund

 

285B.263  Expenditure of Regional Investment Fund; distribution

 

285B.264  Evaluations required following distributions from Rural Investment Fund and Regional Investment Fund; rules

 

285B.266  Strategic Reserve Fund; sources; uses

 

285B.269  Short title

 

INDUSTRY DEVELOPMENT PROJECTS

 

285B.280  Definition of “traded sector”

 

285B.283  Policy

 

285B.286  Industry development activities

 

STATE REVENUE BONDS FOR INDUSTRIAL, COMMERCIAL, SOLID WASTE DISPOSAL, RESEARCH AND DEVELOPMENT USES

 

285B.320  Policy

 

285B.323  Definitions for ORS 285B.320 to 285B.371

 

285B.326  Determination of eligibility of projects for financing; fees

 

285B.329  Review by Oregon Economic and Community Development Commission; exception

 

285B.332  Request by county governing body

 

285B.335  Powers of State Treasurer

 

285B.338  Powers of Oregon Economic and Community Development Commission

 

285B.341  Limitation on state power

 

285B.344  Authority to issue bonds

 

285B.347  Issuance of bonds; determining factors

 

285B.350  Method of issuing bonds

 

285B.353  Administration expenses

 

285B.356  Refunding bonds

 

285B.359  Validity of bonds

 

285B.362  Covenants in bonds

 

285B.365  Limitations of bonds; recitals

 

285B.368  Powers and rights of bondholders

 

285B.371  Loans to eligible projects when state holds no interest

 

INFRASTRUCTURE PROJECTS

 

(Generally)

 

285B.410  Definitions for ORS 285B.410 to 285B.482

 

285B.413  Legislative findings

 

285B.419  Administration of Special Public Works Fund; rules and policies

 

(Community Facilities Projects)

 

285B.422  Funding of community facilities projects; criteria for project funding

 

(Financial Assistance for Projects)

 

285B.428  Application for funds

 

285B.437  Contract with municipality

 

285B.440  Maximum amounts of grants; standards

 

285B.449  Effect of failure to comply or default

 

285B.455  Special Public Works Fund; uses

 

285B.458  Funding of distressed area and rural area infrastructure projects

 

285B.460  Funding and assistance for municipal planning projects

 

285B.462  Funding and assistance for municipal emergency projects

 

285B.465  Allowable costs of projects

 

(Revenue Bond Financing)

 

285B.467  Standards for eligibility for revenue bond financing; rules

 

285B.470  Powers of department over revenue bond financing

 

285B.473  Issuance of revenue bonds

 

285B.476  Application of law to revenue bonds; proceeds; maximum duration of loans

 

285B.479  Terms of revenue bonds

 

285B.482  Revenue bonds as parity bonds; consolidation of bond proceeds; loans and consolidated funds as security for infrastructure, community facility and water bonds; limitation on use of moneys in specified funds

 

INFRASTRUCTURE PROJECTS FOR SOUTHERN OREGON

 

285B.500  Policy; legislative findings

 

285B.503  Oregon Unified International Trade Fund; purposes; sources

 

285B.506  Grant agreements; maximum grant amount; terms of agreement; assignment of right to receive grant moneys; agreement not to constitute state debt

 

285B.509  Agreements between primary sponsor and United States

 

285B.512  End of lottery allocations upon certification by Director of Economic and Community Development Department

 

285B.515  “Primary sponsor” defined for ORS 285B.500 to 285B.512

 

LOTTERY BONDS FOR INFRASTRUCTURE PROJECTS

 

285B.530  Definitions for ORS 285B.530 to 285B.548

 

285B.533  Issuance of infrastructure lottery bonds; amount; use of bond proceeds

 

285B.548  Amount of infrastructure lottery bonds

 

285B.551  Issuance of additional lottery bonds; amount; use of bond proceeds; Economic Infrastructure Project Fund

 

SAFE DRINKING WATER PROJECTS

 

(Generally)

 

285B.560  Definitions for ORS 285B.560 to 285B.599

 

285B.563  Water Fund; uses; sources; maintenance of fund value; rules; coordination with other agencies on safe drinking water projects

 

285B.566  Use of receipts from projects

 

285B.569  When constitutional restrictions apply to use of certain funds

 

(Revenue Bond Financing of Safe Drinking Water Projects)

 

285B.572  Standards for eligibility of water projects; determination to issue bonds; rules

 

285B.575  Issuance of revenue bonds

 

285B.578  Nature of revenue bonds

 

285B.581  Repayment plans for loan; authority of municipalities

 

285B.584  Authority of department

 

285B.587  Deposit and use of bond proceeds

 

285B.590  Other forms of financial assistance

 

285B.593  Technical assistance grants and loans; purposes; rules

 

285B.596  Funding of distressed area or nonurban water projects

 

285B.599  Repayment to Water Fund

 

ENTREPRENEURIAL DEVELOPMENT

 

285B.740  Policy

 

285B.743  Application for entrepreneurial development loan; eligibility

 

285B.746  Conditions required for loan approval

 

285B.749  Additional conditions for loan approval; maximum term and amount of loan; deferral of repayment

 

285B.752  Additional loans; maximum aggregate amount

 

285B.755  Oregon Entrepreneurial Development Loan Fund Advisory Committee

 

285B.758  Oregon Entrepreneurial Development Loan Fund

 

      Note: 285A.010 contains definitions for ORS chapter 285B.

 

BUSINESS DEVELOPMENT PROJECTS

 

      285B.050 Definitions for ORS 285B.050 to 285B.098. As used in ORS 285B.050 to 285B.098, unless the context requires otherwise:

      (1) “Business development project” means the acquisition, engineering, improvement, rehabilitation, construction, operation or maintenance of any property, real or personal, that is used or is suitable for use by an economic enterprise and that will result in, or will aid, promote or facilitate, development of one or more of the following activities:

      (a) Manufacturing or other industrial production;

      (b) Agricultural development or food processing;

      (c) Aquacultural development or seafood processing;

      (d) Development or improved utilization of natural resources;

      (e) Convention facilities and trade centers;

      (f) Transportation or freight facilities; and

      (g) Other activities that represent new technology or type of economic enterprise the Oregon Economic and Community Development Commission determines is needed to diversify the economic base of an area but not including:

      (A) Construction of office buildings, including corporate headquarters; and

      (B) Retail businesses, shopping centers or food service facilities.

      (2) “Commission” means the Oregon Economic and Community Development Commission established under ORS 285A.040.

      (3) “Fund” means the Oregon Business Development Fund.

      (4) “Collateral” has the meaning given that term in ORS 79.0102 for property subject to a security interest.

      (5) “Municipality” means any city, municipal corporation or quasi-municipal corporation.

      (6) “Person” means any individual, association of individuals, joint venture, partnership or corporation.

      (7) “Local development group” means any public or private corporation which has as one of its primary purposes, as stated in its articles of incorporation, charter or bylaws, the promotion of economic development in any part of the State of Oregon.

      (8) “Applicant” means any county, municipality, person or any combination of counties, municipalities or persons applying for a loan from the Oregon Business Development Fund under ORS 285B.050 to 285B.098.

      (9) “Owned and operated by women and minorities” means, with regard to any specific business enterprise, the ownership or control of more than 50 percent of the units of proprietary or ownership interest in that business enterprise by individuals who are women or minority individuals, as defined by ORS 200.005.

      (10) “Emerging small business” has the meaning given that term by ORS 200.005.

      (11) “County” means any county or federally recognized Oregon Indian tribe. [Formerly 285.403; 2001 c.445 §171; 2003 c.167 §1]

 

      Note: For transition provisions regarding secured transactions, see notes under 79.0628.

 

      285B.053 Borrowing money from Oregon Business Development Fund for projects. (1) Any county, municipality, person or any combination of counties, municipalities and persons may file with the Oregon Economic and Community Development Commission an application to borrow money from the Oregon Business Development Fund for a business development project as provided in ORS 285B.050 to 285B.098. The application shall be filed in such a manner and contain or be accompanied by such information as the commission may prescribe.

      (2) Any applicant receiving a loan from the Oregon Business Development Fund shall annually report to the Economic and Community Development Department the estimated number of jobs created as a result of the business development project financed under ORS 285B.050 to 285B.098. The reporting requirement under this section shall continue for five years following the receipt of the loan proceeds or for the life of the loan, whichever period is longer. Agreement to comply with the requirements of this section shall be a condition for obtaining a loan from the Oregon Business Development Fund. [Formerly 285.405]

 

      285B.056 Evaluation of project; fee. (1) Upon receipt of an application under ORS 285B.053, the Oregon Economic and Community Development Commission shall determine whether the plans and specifications for the proposed business development project set forth in or accompanying the application are satisfactory. If the commission determines that the plans and specifications are not satisfactory, it shall:

      (a) Reject the application with a written statement of the reason for that rejection; or

      (b) Require the applicant to submit additional information of the plans and specifications as may be necessary.

      (2) The commission shall charge and collect from the applicant, at the time the application is filed, a fee not to exceed $100. Moneys referred to in this subsection shall be paid into the Oregon Business Development Fund. [Formerly 285.410]

 

      285B.059 Conditions for commission approval of project; preferences; limits. (1) The Oregon Economic and Community Development Commission may approve a business development project proposed in an application filed under ORS 285B.050 to 285B.098 if, after investigation, it finds that:

      (a) The proposed business development project is feasible and a reasonable risk from practical and economic standpoints, and the loan has reasonable prospect of repayment.

      (b) The applicant can provide good and sufficient collateral for the loan.

      (c) Moneys in the Oregon Business Development Fund are or will be available for the proposed business development project.

      (d) There is a need for the proposed business development project, and the applicant’s financial resources are adequate to ensure success of the project.

      (e) The applicant has not received or entered into a contract or contracts exceeding $1 million with the commission, under authority of ORS 285B.050 to 285B.098, for the previous 365 days, nor is there an amount equal to 20 percent of the total value of the fund in outstanding loans with the commission at any one time for business development projects located in the same county as the proposed project. However, nothing in this paragraph prevents the commission from making a loan to an emerging small business, as provided in subsection (6) of this section, for a project in a distressed area or making a loan of less than $100,000, as provided in ORS 285B.080.

      (2) Preference shall be given to a business development project which has a high ratio of employment to the amount of money sought to be borrowed from the Oregon Business Development Fund, which benefits businesses with fewer than 50 employees or which is located within a rural or distressed area of the state. Consideration also shall be given to the extent of participation by local development groups, and the availability and cost of money to the applicant from, or through, commercial lending or financial institutions, or other financial sources, inasmuch as the Oregon Business Development Fund is intended to complement, not supplant, other sources of money for economic development.

      (3) The total amount of moneys loaned from the fund for any business development project shall not exceed 50 percent of the cost of the project. Working capital equity contributed by the applicant or a related party shall not be included in the calculation of total project costs.

      (4) Except in cases where the applicant is a county or municipality, no money shall be loaned from the fund for any business development project unless there exists a commitment from a commercial or private lender, or a local development group, to participate in the financing of the project.

      (5) To encourage private sector and local development group participation in the financing of business development projects, the commission may subordinate the security position of the fund to that of other lenders.

      (6) In each fiscal year of a biennium, not less than 15 percent of all moneys available for lending from the Oregon Business Development Fund are reserved for loans to certified emerging small business enterprises which are located in or draw their workforces from within distressed areas as determined by the Economic and Community Development Department in cooperation with the Employment Department of this state. Any amounts reserved for loans to such businesses that are not loaned in one fiscal year shall be added to the amount reserved for loans to such businesses in the subsequent fiscal year. If the Economic and Community Development Department is unable to obtain a sufficient number of approvable applications to meet the requirements of this subsection, it may, notwithstanding the limitations imposed by ORS 285B.050 (1)(g)(B), make loans to service and retail businesses operated by certified emerging small business enterprises.

      (7) In the operation of the Oregon Business Development Fund, the commission and the department shall, to the maximum extent feasible and consistent with constitutional limitations, seek to assure that an amount equal to that specified in subsection (6) of this section be loaned to businesses owned and operated by women and minorities. [Formerly 285.413; 1999 c.509 §27; 2003 c.167 §2]

 

      285B.062 Agreement for project loan; required provisions; interest rate; discount for early repayment. If the Oregon Economic and Community Development Commission approves the business development project, the commission, on behalf of the state, and the applicant may enter into a loan contract of not more than $1 million, secured by good and sufficient collateral, which shall set forth, among other matters:

      (1) A plan for repayment by the applicant to the Oregon Business Development Fund of moneys borrowed from the fund used for the business development project with interest charged on those moneys at the rate of not less than one percentage point more than the prevailing interest rate on United States Treasury bills, notes or bonds of a comparable term, as determined by the commission. The repayment plan, among other matters:

      (a) Shall provide for commencement of repayment by the applicant of moneys used for the business development project and interest thereon no later than one year after the date of the loan contract or at such other time as the commission may provide.

      (b) May provide for reasonable extension of the time for making any repayment in emergency or hardship circumstances if approved by the commission.

      (c) Shall provide for such evidence of debt assurance of, and security for, repayment by the applicant as is considered necessary by the commission.

      (d) Shall set forth a schedule of payments and the period of loan which shall not exceed the usable life of the contracted project or 25 years from the date of the contract, whichever is less, and shall also set forth the manner of determining when loan payments are delinquent. The payment schedule shall include repayment of interest which accrues during any period of delay in repayment authorized by paragraph (a) of this subsection, and the payment schedule may require payments of varying amounts for collection of accrued interest.

      (e) Shall set forth a procedure for formal declaration of default of payment by the commission, including formal notification of all relevant federal, state and local agencies; and further, a procedure for notification of all relevant federal, state and local agencies that declaration of default has been rescinded when appropriate.

      (f) May offer a discount not to exceed 10 percent of the outstanding principal for the early repayment of the entire outstanding principal of any loan. The commission by rule shall adopt policies that provide for greater discounts for earlier repayments and that provide for greater discounts for firms that have created at least one job per each $15,000 loaned to the firm from the Oregon Business Development Fund.

      (2) Provisions satisfactory to the commission for field engineering and inspection, the commission to be the final judge of completion of the contract.

      (3) That the liability of the state under the contract is contingent upon the availability of moneys in the Oregon Business Development Fund for use in the business development project.

      (4) Such further provisions as the commission considers necessary to insure expenditure of the funds for the purposes set forth in the approved application.

      (5) That the commission may institute appropriate action or suit to prevent use of the facilities of a business development project financed by the Oregon Business Development Fund if the applicant is delinquent in the repayment of any moneys due the fund. [Formerly 285.415; 2003 c.167 §3]

 

      285B.065 Loans in distressed areas exempt from requirements of ORS 285B.059 and 285B.062. The Economic and Community Development Department may make loans in distressed areas, as defined by the department, without regard to the requirements for security and collateral under ORS 285B.059 and 285B.062 that are otherwise applicable. [Formerly 285.416]

 

      285B.068 Payment of moneys for project; applicant to pay percentage of loan principal to Oregon Business Development Fund. (1) If the Oregon Economic and Community Development Commission approves a loan for a business development project and the applicant has received all necessary permits required by federal, state and local agencies, the commission shall pay moneys for the project from the Oregon Business Development Fund, in accordance with the terms of the loan contract as prescribed by the commission.

      (2) Immediately upon receiving the loan proceeds, the applicant shall pay to the commission one and one-half percent of the principal amount of the loan, to be paid back to the Oregon Business Development Fund. A maximum of three percent of the principal amount of the loan may be paid from the fund to local development groups for the purposes set forth in ORS 285B.092 (1)(a). [Formerly 285.417]

 

      285B.071 Authority to obtain moneys to repay fund. Any county or municipality that enters into a contract with the Oregon Economic and Community Development Commission for a business development project and repayment as provided in ORS 285B.062 may obtain moneys for repayment to the Oregon Business Development Fund under the contract in the same manner as other moneys are obtained for purposes of the county or municipality or other moneys available to the developer. [Formerly 285.420]

 

      285B.074 Contract for loan service; fee. The Economic and Community Development Department may, by contract, provide for local business development funds to service outstanding loans from the Oregon Business Development Fund. The department may provide for a fee of up to two percent of the outstanding loan balance on such loans to compensate local business development funds for services provided under this section. [Formerly 285.425]

 

      285B.077 Report required. The Oregon Economic and Community Development Commission shall submit to the Legislative Assembly and the Governor a biennial report of the transactions of the Oregon Business Development Fund in such detail as will adequately indicate the condition of the fund. [Formerly 285.430]

 

      285B.080 Director as agent; limitation on authority. (1) The Oregon Economic and Community Development Commission may appoint the Director of the Economic and Community Development Department as its representative and agent in all matters pertaining to ORS 285B.050 to 285B.098.

      (2) The director shall ensure that all provisions of ORS 285B.050 to 285B.098 are complied with and that appropriately trained personnel are employed to properly administer the fiscal and other portions of ORS 285B.050 to 285B.098.

      (3) The director shall have the authority in the director’s sole discretion to approve loans for business development projects in the amount of $100,000 or less and to disburse funds for such projects. [Formerly 285.433]

 

      285B.083 Use of refinancing and other financial assistance. Except as provided in ORS 285B.086, if any business development project is refinanced or financial assistance is obtained from other sources after the execution of the loan from the state, those shall be first used to repay the state, unless provided otherwise by the committee, if the refinancing or financial assistance applies only to the business development project authorized and does not include any subsequent addition, expansion, improvement or further development. [Formerly 285.435]

 

      285B.086 Authority to lend funds for joint governmental projects or match money; form of loan application; loan limit. (1) The Oregon Economic and Community Development Commission may authorize funds from the Oregon Business Development Fund to be used in appropriate joint governmental participation projects or as match money with any municipally, county, state or federally funded business development project authorized within a county or city, subject to the stipulations of ORS 285B.050 to 285B.098.

      (2) Any application for a loan under this section shall be in such form as the commission prescribes and shall furnish such proof of federal, state or local approval as appropriate for funding of the business development project.

      (3) The total amount of moneys loaned from the fund for federal, state or local joint business development project purposes shall not exceed $1 million per project. [Formerly 285.437; 2003 c.167 §4]

 

      285B.089 Loan contract; required provisions. If the Oregon Economic and Community Development Commission approves an application for the loan of moneys authorized by ORS 285B.086, the commission shall enter into a loan contract, secured by good and sufficient collateral, with the applicant that provides, among other matters:

      (1) That the loan bear interest at the same rate of interest as provided in ORS 285B.062 (1).

      (2) That the contract shall set forth a schedule of payments including interest and principal for the period of the loan, which shall not exceed the usable life of the contracted project or 25 years from the date of the contract, whichever is less, and shall set forth the manner of determining when loan payments are delinquent. The same schedule shall include repayment of interest which accrues during any period of delay in repayment authorized by ORS 285B.050 to 285B.098, and the repayment schedule may require payments of varying amounts for collection of that accrued interest. However, the commission may make provisions for extensions of time in making repayment if the delinquencies are caused by acts of God or other conditions beyond the control of the applicant and the security will not be impaired thereby.

      (3) Such provisions as the commission considers necessary to insure expenditure of the moneys loaned for the purposes provided in ORS 285B.086, including all provisions of ORS 285B.059. [Formerly 285.440]

 

      285B.092 Oregon Business Development Fund; uses. (1) There is created within the State Treasury a revolving fund known as the Oregon Business Development Fund, separate and distinct from the General Fund. Interest earned by the fund shall be credited to the fund. Moneys in this fund are continuously appropriated to the Oregon Economic and Community Development Commission for the following purposes:

      (a) Administrative expenses of the commission in marketing public business finance, processing applications, investigating proposed business development projects and servicing outstanding loans. In any one year, administrative expenses charged under this paragraph may not be greater than the total revenues received in that year from fees provided for in subsection (2)(a) of this section, plus four percent of the total asset value of the fund.

      (b) Payment of loans to applicants under ORS 285B.050 to 285B.098.

      (c) Purchase or buy out of superior or prior liens or mortgages on or a security interest in any business development project financed in part by a loan from the fund, when the commission determines:

      (A) A loan from the fund is in default and is in liquidation or at risk of being forced into liquidation by another creditor to the project;

      (B) Such action is necessary to maintain or enhance the value of the commission’s collateral in the project; and

      (C) The amount of the purchase or buyout of superior or prior liens or mortgages on that project does not exceed $1 million.

      (2) The fund created by subsection (1) of this section shall consist of:

      (a) Fees required by ORS 285B.056 (2) and 285B.068 (2).

      (b) Repayment of moneys loaned to counties, municipalities or persons from the Oregon Business Development Fund, including interest on those moneys.

      (c) Payment of such moneys as may be appropriated to the fund by the Legislative Assembly.

      (d) Moneys obtained from any interest accrued from funds.

      (e) Moneys from any grant made to the fund by any federal agency.

      (3) Notwithstanding any other law, if at any time there are insufficient funds in the Oregon Entrepreneurial Development Loan Fund established by ORS 285B.758, the Director of the Economic and Community Development Department may direct the transfer of unobligated funds from the Oregon Business Development Fund to the Oregon Entrepreneurial Development Loan Fund. Transfers under this subsection shall be in amounts necessary to meet the reasonably foreseeable demand for participation in the entrepreneurial loan program. [Formerly 285.443; 1999 c.247 §3; 1999 c.509 §28; 2003 c.167 §5]

 

      285B.093 Oregon Targeted Development Account; purpose. (1) The Oregon Economic and Community Development Commission may establish the Oregon Targeted Development Account as an account within the Oregon Business Development Fund.

      (2) If the account is established, the purpose of the Oregon Targeted Development Account is to promote cooperation and foster partnership among the commission, the Economic and Community Development Department and financial institutions in Oregon to encourage investment in distressed areas, as defined by the department.

      (3) The Economic and Community Development Department may make loans from the Oregon Targeted Development Account in distressed areas without regard to the minimum rate of interest that is otherwise applicable under ORS 285B.062. The department may make loans in distressed areas at an interest rate that is determined by the Oregon Economic and Community Development Commission.

      (4) ORS 285B.059 (2) does not apply to business development projects financed wholly or in part with moneys from the Oregon Targeted Development Account. [1999 c.247 §1; 2003 c.167 §6]

 

      285B.095 Retention and use of payments, receipts and interest. All payments, receipts and interest from outstanding indebtedness or any other source shall be retained and accumulated in the Oregon Business Development Fund and shall be used for the purposes of the fund. [Formerly 285.445]

 

      285B.098 Status of loan to county or municipality. A loan made to a county or municipality under ORS 285B.050 to 285B.098 shall not be a general obligation of that county or municipality, nor a charge upon the tax revenues of that county or municipality, nor a charge upon any other revenues or property of that county or municipality not specifically pledged thereto. A loan made to a county or municipality under ORS 285B.050 to 285B.098 may be secured by the business development project for which the loan is made, as well as by any revenues derived from that project, and any nontax-derived revenues or property of the county or municipality not otherwise pledged or committed for other purposes. A county or municipality may repay any portion of a loan incurred under ORS 285B.050 to 285B.098 from any funds available to it. [Formerly 285.447]

 

      285B.103 [2001 c.944 §2; 2003 c.374 §1; renumbered 285C.500 in 2003]

 

      285B.105 [2001 c.944 §3; 2003 c.374 §2; renumbered 285C.503 in 2003]

 

      285B.108 [2001 c.944 §4; 2003 c.374 §3; renumbered 285C.506 in 2003]

 

SMALL BUSINESS DEVELOPMENT

 

(Generally)

 

      285B.120 Oregon Small Business Development Act. ORS 271.510, 271.520, 285B.092, 285B.123, 285B.165 to 285B.171, 285B.320 to 285B.326, 285B.335, 285B.341, 285B.344, 285B.350, 285B.365, 285B.371, 657.471, 659A.015 and 777.250 shall be known as the Oregon Small Business Development Act of 1983. [Formerly 285.500]

 

      285B.123 Policy. (1) The Legislative Assembly finds that:

      (a) Small businesses comprise more than 97 percent of the business entities in this state.

      (b) Small businesses provide more than three-quarters of the private sector jobs in this state.

      (c) The small business contribution to the economy of this state exceeds the national average contribution and its continuance is vital to the economic health and growth of this state.

      (d) All national economic indicators establish that the greatest source of future new jobs is in the small business sector of the economy.

      (2) The purpose of the Oregon Small Business Development Act of 1983 is to encourage and assist the development and continued growth of small business in this state.

      (3) As used in the Oregon Small Business Development Act of 1983, “small business” means a manufacturing business having 200 or fewer employees and all other forms of business having 50 or fewer employees.

      (4) The provisions of ORS 285B.120 and 657.471 are intended to assist in carrying out the Oregon Small Business Development Act of 1983. [Formerly 285.503]

 

(Capital Access for Small Businesses)

 

      285B.126 Definitions for ORS 285B.126 to 285B.147. As used in ORS 285B.126 to 285B.147, unless the context requires otherwise:

      (1) “Financial institution” means a financial institution, as defined in ORS 706.008.

      (2) “Loss reserve account” means an account in the State Treasury or any financial institution which is established and maintained by the Economic and Community Development Department for the benefit of a financial institution participating in the capital access program established under ORS 285B.126 to 285B.147.

      (3) “Qualified business” means any person, conducting business for profit or not for profit, that is authorized to conduct business in the State of Oregon.

      (4) “Qualified loan” means a loan or portion of a loan made by a financial institution to a qualified business for any business activity that has its primary economic effect in Oregon. The term does not include:

      (a) A loan for the construction or purchase of residential housing.

      (b) A loan for purchase of real property that is not used for the business operations of the borrower.

      (c) A loan for the refinancing of an existing loan when and to the extent that the outstanding balance is not increased. [Formerly 285.507]

 

      285B.129 Policy. (1) The Legislative Assembly finds that:

      (a) There is a persistent shortage of equity capital available to small businesses in Oregon.

      (b) Small businesses make important contributions to economic growth and vitality in this state.

      (c) Many financial institutions in Oregon are limited in their ability to provide financing to small but rapidly growing businesses.

      (2) It is the purpose of ORS 285B.126 to 285B.147 to establish a capital access program under which the State of Oregon will provide public fiscal resources to assist Oregon financial institutions to overcome obstacles and constraints in meeting the full range of economically sound financing needs of Oregon businesses. [Formerly 285.510]

 

      285B.132 Contracts with financial institutions for capital access; contents of contract; status of information. (1) The Economic and Community Development Department may contract with any financial institution for the purpose of allowing the financial institution to participate in the capital access program established by ORS 285B.126 to 285B.147.

      (2) A contract between the Economic and Community Development Department and a financial institution under this section shall provide:

      (a) For the creation of a loss reserve account by the department for the benefit of the financial institution.

      (b) That the financial institution, qualified business and the department will deposit moneys to the credit of the institution’s loss reserve account when the financial institution makes a qualified loan to a qualified business.

      (c) That the department will pay moneys in the loss reserve account, not exceeding an amount equal to the total amount credited to the loss reserve account, to the financial institution to reimburse the institution for any financial loss incurred as a result of any qualified loan made under the capital access program established by ORS 285B.126 to 285B.147.

      (d) That the liability of the State of Oregon and the Economic and Community Development Department to the financial institution under the contract is limited to the amount of money credited to the loss reserve account of the institution.

      (e) That the financial institution shall provide such information as the department may require, including financial information that is identifiable with, or identifiable from, the financial records of a particular customer who is the recipient of a qualified loan.

      (f) For such other terms as the department may require.

      (3) A financial institution is not subject to ORS 192.555 (1) when the financial institution provides information to the Economic and Community Development Department as required by subsection (2)(e) of this section. [Formerly 285.513]

 

      285B.135 Loss reserve accounts; limitations on amount. (1) The Economic and Community Development Department shall establish a loss reserve account for each financial institution with which the department makes a contract under ORS 285B.132.

      (2) The loss reserve account for a financial institution shall consist of moneys paid as fees by borrowers and the financial institution under ORS 285B.138 and moneys transferred to the account from the Capital Access Fund under ORS 285B.138.

      (3) Notwithstanding ORS chapter 293 or 295, the department may establish and maintain loss reserve accounts with any financial institution under such policies as the department may adopt. The department may deposit up to $50,000 per financial institution in a loss reserve account to encourage a financial institution to participate in the capital access program. The total amount of such deposits may not exceed $250,000 per biennium.

      (4) All moneys in a loss reserve account established under ORS 285B.126 to 285B.147 are the property of the State of Oregon.

      (5) The amounts transferred from the Capital Access Fund to a loss reserve account on behalf of any single qualified business shall not exceed $150,000. [Formerly 285.515; 2003 c.167 §7]

 

      285B.138 Enrollment of qualified loan in program; procedure; fee; transfers to loan reserve account. (1) When a financial institution participates in the capital access program established by ORS 285B.126 to 285B.147, if the financial institution decides to enroll a qualified loan under the capital access program in order to obtain the protection against loss provided by its loss reserve account, the financial institution shall notify the Economic and Community Development Department of the loan within 30 days after the loan is made. The notification shall be in writing on a form prescribed by the department.

      (2) When making a qualified loan that will be enrolled under the capital access program, the financial institution shall require the qualified business to which the loan is made to pay a fee of not less than one and one-half percent of the principal amount of the loan but not more than three and one-half percent of such principal amount. The financial institution shall also pay a fee in an amount equal to the fee paid by the borrower. The financial institution shall deliver the fees collected under this subsection to the department for deposit in the loss reserve account for the institution.

      (3) When depositing fees collected under subsection (2) of this section to the credit of the loss reserve account for a financial institution, the department shall transfer an amount that is not less than the total amount of the fees paid by the borrower and the financial institution from the Capital Access Fund to the loss reserve account for the institution. [Formerly 285.517]

 

      285B.139 Definitions; rules; exception to minimum amount required for transfer to loss reserve account. (1) As used in this section, “brownfield” and “environmental action” have the meanings given those terms in ORS 285A.185 and 285A.188, respectively.

      (2) Notwithstanding the provisions of ORS 285B.138 (3), the Economic and Community Development Department shall adopt rules that provide that, for qualified loans to businesses in distressed areas, as defined by the department, or for use in an environmental action on brownfields, the department shall transfer an amount that is not less than 150 percent of the total amount of the fees paid by the borrower and the financial institution from the Capital Access Fund to the loss reserve account of the institution. However, the total amount transferred under this section shall not exceed 40 percent of the moneys appropriated to the Capital Access Fund. [1991 c.688 §15; 1993 c.765 §80; 1995 c.71 §1; 1997 c.738 §4; 1999 c.247 §5; 2001 c.96 §3]

 

      285B.141 Claims for reimbursement of losses; amounts subject to reimbursement. (1) The Economic and Community Development Department shall establish procedures under which financial institutions participating in the capital access program established by ORS 285B.126 to 285B.147 may submit claims for reimbursement for losses incurred as a result of qualified loan defaults.

      (2) Costs for which a financial institution may be reimbursed from its loss reserve account include loan principal, accrued interest on the principal, actual and necessary costs of seeking recovery of the principal amount and interest thereon and any other related costs.

      (3) A financial institution may seek reimbursement of loan losses prior to the liquidation of collateral from defaulted loans. The financial institution shall repay its loss reserve account for any moneys received as reimbursement under this section if the financial institution recovers moneys from the borrower or from the liquidation of collateral for the defaulted loan. [Formerly 285.520]

 

      285B.144 Financial report of Capital Access Fund. (1) The Economic and Community Development Department shall annually prepare a report conforming to generally accepted accounting principles that describes the financial condition of the Capital Access Fund.

      (2) The reports required under this section shall be submitted to the Governor and to the joint Legislative Committee on Trade and Economic Development. [Formerly 285.525]

 

      285B.147 Capital Access Fund; use; investment earnings; administrative expenses. (1) There is established in the State Treasury, separate and distinct from the General Fund, the Capital Access Fund. All moneys in the fund are continuously appropriated to the Economic and Community Development Department for the purpose of making payments to loss reserve accounts established under ORS 285B.126 to 285B.147.

      (2) Moneys in the Capital Access Fund, with the approval of the State Treasurer, may be invested as provided by ORS 293.701 to 293.820, and the earnings from such investment shall be credited to the Capital Access Fund.

      (3) The Capital Access Fund shall consist of:

      (a) Moneys appropriated to the fund by the Legislative Assembly.

      (b) Interest earned on moneys in the fund.

      (c) Moneys returned to the fund from loss reserve accounts or other sources.

      (4) The Economic and Community Development Department may charge administrative costs to the fund to pay for actual and necessary administrative expenses incurred by the department in administering the fund and establishing and maintaining loss reserve accounts under ORS 285B.126 to 285B.147. [Formerly 285.527]

 

      285B.150 Transfers to Capital Access Fund when insufficient funds available. (1) Notwithstanding any other law, if at any time there are insufficient funds in the Capital Access Fund established by ORS 285B.147 to continue the operation of the program authorized by ORS 285B.126 to 285B.147, the Director of the Economic and Community Development Department may direct the transfer of unobligated funds from the Oregon Business Development Fund to the Capital Access Fund. Such transfers shall be in amounts necessary to meet the reasonably foreseeable demand for participation in the capital access program.

      (2) Notwithstanding any other law, if at any time after the transfer of funds provided for in subsection (1) of this section, there are insufficient funds in the Capital Access Fund established by ORS 285B.147 to continue the operation of the program authorized by ORS 285B.126 to 285B.147, the Director of the Economic and Community Development Department may direct the transfer of unobligated funds from the Credit Enhancement Fund to the Capital Access Fund. Such transfers shall be in amounts necessary to meet the reasonably foreseeable demand for participation in the capital access program. The use of funds so transferred shall continue to be governed by ORS 285B.215 (3). [Formerly 285.528]

 

      Note: 285B.150 was enacted into law by the Legislative Assembly but was not added to or made a part of ORS chapter 285B or any series therein by legislative action. See Preface to Oregon Revised Statutes for further explanation.

 

      285B.153 [Formerly 285.530; repealed by 2003 c.167 §16]

 

      285B.156 [Formerly 285.533; repealed by 1999 c.509 §61]

 

(Local Business Development)

 

      285B.159 “Local business development fund” defined. As used in ORS 285B.074 and 285B.162, unless the context requires otherwise, “local business development fund” means a private nonprofit corporation or other nonprofit entity, a public corporation or public agency that makes loans or provides other financial assistance to businesses in this state for the purpose of promoting economic development. [Formerly 285.535; 2001 c.104 §98]

 

      285B.162 Coordination of marketing and finance programs. The Economic and Community Development Department shall work with local business development funds to strengthen the coordination in the marketing of finance programs for small business, the review and analysis of loan applications and the operation of publicly operated business finance programs. [Formerly 285.537]

 

(Small Business Development Center)

 

      285B.165 Purpose of ORS 285B.165 to 285B.171. (1) The purpose of ORS 285B.165 to 285B.171 is to establish and sustain a statewide network of small business development centers.

      (2) The Legislative Assembly finds that:

      (a) It is in the state’s interest to help small businesses develop and improve skills in such areas as marketing, management and capital formation through a network of small business development centers;

      (b) Small business employers create most of the new jobs in Oregon and are vital to Oregon’s long term economic vitality;

      (c) Community colleges and state universities can link small business with college resources, expert resource people in the business community and other training resources throughout the state; and

      (d) Information resources, business counseling and training assistance in a convenient format support the vitality of small business. [Formerly 285.540; 2001 c.148 §3]

 

      285B.166 “State university” defined for ORS 285B.165 to 285B.171. As used in ORS 285B.165 to 285B.171, “state university” means a state institution of higher education listed in ORS 352.002. [2001 c.148 §2]

 

      285B.168 Grants; application; authorized recipients and uses; eligibility. (1) The Economic and Community Development Department may make grants available to a community college district, a community college service district or, with the concurrence of the Commissioner for Community College Services and the Chancellor of the Oregon University System, a state university to assist in the formation, improvement and operation of small business development centers. If a community college district, a community college service district or a state university is unable to adequately provide services in a specific geographic area, the department may make grants available to other service providers as determined by the department. The grant application shall include:

      (a) Plans for providing small business owners and managers individual counseling, to the greatest extent practicable, in subject areas critical to small business success;

      (b) A budget for the year for which a grant is requested, including cost apportionment among the Economic and Community Development Department, small business clients, the community college, state university or other service providers and other sources; and

      (c) A plan for evaluating the effect of the program on small business clients served.

      (2) The grants made under subsection (1) of this section are to be used by the grant recipient to provide funds for:

      (a) Small business development center staff and support staff;

      (b) Expert resource persons from the business community;

      (c) Other training and business resources in skill areas for which, or areas of the state where, the grant recipient can demonstrate it does not otherwise have the capacity or expertise to provide the resources; and

      (d) Other costs related to providing training, counseling and business resources to small business clients.

      (3) To be eligible for a grant under subsection (1) of this section, the recipient shall be required to provide funds, in-kind contributions or some combination of funds and contributions, in accordance with rules adopted by the Economic and Community Development Department.

      (4) Subject to the approval of the department, a grant recipient may subcontract funds received under this section to any other entity that is eligible to receive funding under this section. [Formerly 285.543; 2001 c.148 §4; 2003 c.773 §15]

 

      285B.171 Short title. ORS 285B.165 to 285B.171 shall be known and may be cited as the “Small Business Training Assistance Act.” [Formerly 285.547]

 

(Miscellaneous)

 

      285B.174 Programs to assist businesses in procuring government contracts and grants. In