Chapter 247 Oregon Laws 1999

Session Law

AN ACT

SB 402

Relating to economic development; creating new provisions; amending ORS 285B.092 and 285B.200 and section 15, chapter 688, Oregon Laws 1991; repealing section 16, chapter 688, Oregon Laws 1991; and declaring an emergency.

Be It Enacted by the People of the State of Oregon:

SECTION 1. (1) The Oregon Economic 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 Development Department and financial institutions in Oregon to encourage investment in distressed areas, as defined by the department.

(3) The Economic 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 Development Commission.

(4) ORS 285B.059 (1)(e) to (g), (2) and (5) does not apply to business development projects financed wholly or in part with moneys from the Oregon Targeted Development Account.

SECTION 2. ORS 285B.065 and section 1 of this 1999 Act are added to and made a part of ORS 285B.050 to 285B.098.

SECTION 3. ORS 285B.092 is amended to read:

285B.092. (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 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.

(d) 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 $500,000.

(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.

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

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

SECTION 4. ORS 285B.200 is amended to read:

285B.200. As used in ORS 285B.200 to 285B.218:

(1) "Department" means the Economic Development Department.

(2) "Eligible project costs" includes productive equipment and machinery, working capital for operations and export transactions and such other costs as the department, by rule, may provide.

(3) "Emerging small business" has the meaning given that term in ORS 200.005.

(4) "Financial institution" includes institutions listed in ORS 706.008 and such other institutions defined by rule of the Economic Development Department as financial institutions for purposes of ORS 285B.200 to 285B.218.

(5) "Qualified business" means any existing or proposed business entity with an average annual employment not exceeding 200 employees that, except when located within a distressed area, as defined by the Economic Development Department, sells goods or services in markets for which national or international competition exists or that owns, occupies, operates or has entered into an agreement to own, occupy or operate real property containing a brownfield, as defined in ORS 285A.185. The term includes professional services companies providing services to traded sector industries and other entities within and outside of this state.

(6) "Value-added agricultural products" means agricultural products that have been processed, transformed or refined to the point where they may be distributed to a final consumer without further processing, transformation or refining. The term also includes agricultural products that are processed, transformed or refined for distribution to other than final consumers when such processing, transformation or refining represents a substantial increment in value as determined by the Economic Development Department in consultation with the State Department of Agriculture.

SECTION 5. Section 15, chapter 688, Oregon Laws 1991, as amended by section 80, chapter 765, Oregon Laws 1993, section 1, chapter 71, Oregon Laws 1995, and section 4, chapter 738, Oregon Laws 1997, is amended to read:

Sec. 15. Notwithstanding the provisions of ORS 285B.138 (3), the Economic Development Department shall adopt rules that provide that, for qualified loans [made on or before June 30, 1999,] to businesses in distressed areas, as defined by the department, or for use in the evaluation of brownfields, as defined in [section 2 of this 1997 Act] ORS 285A.185, 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.

SECTION 6. Section 16, chapter 688, Oregon Laws 1991, is repealed.

SECTION 7. If this 1999 Act does not become effective until after June 30, 1999, the repeal of section 16, chapter 688, Oregon Laws 1991, by section 6 of this 1999 Act revives sections 6, 7, 8, 9, 10, 11, 12, 13 and 15, chapter 688, Oregon Laws 1991. If this 1999 Act does not become effective until after June 30, 1999, section 6 of this 1999 Act shall be operative retroactively to that date, and the operation and effect of sections 6, 7, 8, 9, 10, 11, 12, 13 and 15, chapter 688, Oregon Laws 1991, shall continue unaffected from June 30, 1999, to the effective date of this 1999 Act and thereafter. Any otherwise lawful action taken or otherwise lawful obligation incurred under the authority of sections 6, 7, 8, 9, 10, 11, 12, 13 and 15, chapter 688, Oregon Laws 1991, after June 30, 1999, and before the effective date of this 1999 Act, is ratified and approved.

SECTION 8. (1) Sections 6, 7, 8, 9, 10, 11, 12 and 13, chapter 688, Oregon Laws 1991, are added to and made a part of ORS chapter 285B.

(2) Section 15, chapter 688, Oregon Laws 1991, is added to and made a part of ORS 285B.126 to 285B.147.

SECTION 9. This 1999 Act being necessary for the immediate preservation of the public peace, health and safety, an emergency is declared to exist, and this 1999 Act takes effect June 30, 1999.

Approved by the Governor June 10, 1999

Filed in the office of Secretary of State June 10, 1999

Effective date June 30, 1999

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