Chapter 773 Oregon Laws 2003

AN ACT

HB 2300

Relating to Economic and Community Development Department; creating new provisions; amending ORS 285A.050, 285A.090, 285A.095, 285A.213, 285A.224, 285A.340, 285A.346, 285A.349, 285A.609, 285A.612, 285A.618, 285A.666, 285A.678, 285A.681, 285A.702, 285B.168, 285B.230, 285B.233, 285B.236, 285B.239, 285B.242, 285B.245, 285B.248, 285B.254, 285B.257, 285B.260, 285B.263, 285B.410, 285B.413, 285B.416, 285B.419, 285B.422, 285B.428, 285B.431, 285B.437, 285B.438, 285B.440, 285B.443, 285B.446, 285B.452, 285B.455, 285B.458, 285B.461, 285B.464, 285B.467, 285B.470, 285B.473, 285B.476, 285B.482, 285B.563, 285B.593, 285B.596, 285B.839 and 657.665 and section 19, chapter 607, Oregon Laws 1987; and repealing ORS 285A.343 and section 20, chapter 607, Oregon Laws 1987.

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

SECTION 1. ORS 285A.050 is amended to read:

285A.050. (1) The Oregon Economic and Community Development Commission shall report [biennially] annually to the Governor and the Legislative Assembly on the success of economic development efforts. The report, at a minimum, shall include the following:

(a) For the overall Economic and Community Development Department effort and for each identifiable program and significant project or service:

(A) The impact of that program on the competitiveness of traded sector industries and the skill levels of the Oregon workforce;

(B) The impact on the number of jobs, including jobs created and retained;

(D) The actual or anticipated impact of public investments at all levels, in terms of measurable outcomes wherever possible; and

(E) The impact of that program on the Internet-based entities and employees in Oregon.

(b) The status of the Oregon economy related to:

(A) Changes in employment and wage levels in Oregon industries;

(B) Changes in employment, wage levels and competitiveness of traded sector industries; and

(d) Recommendations for removing identified barriers and additional suggestions for improving the performance of Oregon’s economy.

(e) Recommendations on this state’s investment in its public ports, on this state’s response to policy issues that affect ports and for the strategic development of port facilities that promote maritime commerce, recreational opportunities and the economy of Oregon.

(f) Progress made toward elimination of economically distressed areas of this state.

(g) Recommendations regarding improving the international competitiveness of Oregon.

(h) Progress made in serving microenterprise businesses and recommendations for increasing the success of microenterprises.

(2) Whenever a power is granted to the commission, the power may be exercised by such officers, employees or commission-appointed committees as are designated in writing by the commission.

(3) Reports to the Legislative Assembly required under this section shall be made in accordance with ORS 192.245.

SECTION 1a. ORS 285A.090 is amended to read:

285A.090. The Economic and Community Development Department shall:

(1) Implement programs consistent with policies of the Oregon Economic and Community Development Commission.

(2) Provide field representatives in the various geographical regions of the state. The field representatives shall be in the unclassified service and shall receive such salary as may be set by the Director of the Economic and Community Development Department, unless otherwise provided by law. The field representatives shall:

(a) Serve as internal advocates and centralized contacts within state government for businesses seeking to locate or expand in the region and shall guide the businesses through all required processes with state regulatory agencies and local units of government to facilitate and expedite siting or expansion of the businesses within the businesses’ budgets and in an economically viable manner;

(b) Seek assistance and direction from the Governor or a designee of the Governor for resolving issues that have delayed a project in order to ensure that governmental decisions and actions on projects are made in a timely and reasonable manner;

[(a)] (c) Work with local units of government and the private sector [to encourage and to assist them] as they establish and carry out economic and community development plans and programs under ORS 280.500;

[(b) Promote local awareness of department policy and department programs and services and of assistance and economic incentives available from government at all levels; and]

(d) Establish links with and act as liaisons between businesses seeking to locate or expand in the region and resources within the public and private institutions of higher education in Oregon familiar with technological advancements and grant opportunities;

(e) Serve as liaisons between businesses seeking to locate or expand in the region and appropriate governmental, university, community college and industry representatives to assist and partner with the businesses in their developmental efforts;

(f) Assemble regional rapid response teams that include regional departmental staff and representatives of local governments in the region to work with businesses seeking to locate or expand in the region by facilitating developmental procedures and eliminating obstacles to completion of projects;

(g) Assign specific responsibilities for and monitor progress of rapid response team members toward completion of tasks essential to the achievement of a successful outcome of a project for all parties involved;

(h) Coordinate meetings between businesses seeking to locate or expand in the region and the members of rapid response teams to establish and monitor the adherence to developmental timelines and to ensure satisfaction with services provided;

[(c)] (i) Deliver to local units of government and the private sector the assistance and services available from the department, including publications, research and technical and financial assistance programs[.]; and

(j) Promote local awareness of department policy and department programs and services and of assistance and economic incentives available from government at all levels.

(3) Process requests received by state agencies and interested parties for information pertaining to industrial and commercial locations and relocations throughout the state.

(4) Consult and advise with, coordinate activities of, and give technical assistance and encouragement to, state and local organizations, including local development corporations, county, city, and metropolitan-area committees, chambers of commerce, labor organizations and similar agencies interested in obtaining new industrial plants or commercial enterprises.

(5) Act as the state’s official liaison agency between persons interested in locating industrial or business firms in the state, and state and local groups seeking new industry or business, maintaining the confidential nature of the negotiations it conducts as requested by persons contemplating location in the state.

(6) Coordinate state and federal economic and community development programs.

(7) Consult and advise with, coordinate activities of, and give technical assistance and encouragement to all parties including, but not limited to, port districts within the state working in the field of international trade or interested in promoting their own trading activity.

(8) Provide advice and technical assistance to Oregon business and labor.

(9) Collect and disseminate information regarding the advantages of developing new business and expanding existing business in the state.

(10) Aid local communities in planning for and obtaining new business to locate therein and provide assistance in local applications for federal development grants.

(11) Work actively to recruit domestic and international business firms to those communities that desire such recruitment.

(12) In carrying out its duties under ORS chapters 285A and 285B and ORS 329.905 to 329.975, give priority to assisting small businesses in this state by encouraging the creation of new businesses, the expansion of existing businesses and the retention of economically distressed businesses which are economically viable.

(13) Establish and operate foreign trade offices in those foreign countries in which the department considers a foreign trade office necessary using department employees, contracts with public or private persons or a combination of department employees and contractors. Department employees, including managers, who are assigned to work in a foreign trade office shall be in the unclassified service, and the director shall set the salaries of those persons. Foreign trade offices shall provide one or more of the following services:

(a) Work with the private sector to assist them in finding international markets for their goods and services;

(b) Work with local units of government to assist them in locating foreign businesses within their jurisdiction;

(c) Promote awareness in foreign countries of department policy, programs and services and of assistance and economic incentives available from government at all levels; or

(d) Provide other assistance considered necessary by the director.

SECTION 1b. ORS 285A.095 is amended to read:

285A.095. (1) When providing funding for a project, for a program or for technical assistance, the Economic and Community Development Department shall give priority to counties, cities, communities or other geographic areas that are designated as distressed areas by the Economic and Community Development Department, based on indicators of economic distress or dislocation, including but not limited to unemployment, poverty and job loss.

(2) Prior to defining or designating distressed areas for the purposes of subsection (1) of this section, the Economic and Community Development Department shall consult with other state agencies and with local agencies and officials.

(3) The Economic and Community Development Department shall conduct a review of its compliance with subsections (1) and (2) of this section at least once in each year and shall prepare a report concerning the compliance review. The report shall be incorporated into the [biennial] annual report of the Oregon Economic and Community Development Commission required by ORS 285A.050.

SECTION 2. ORS 285A.213 is amended to read:

285A.213. (1) There is established in the State Treasury, separate and distinct from the General Fund, the Safe Drinking Water Revolving Loan Fund. All moneys in the Safe Drinking Water Revolving Loan Fund are continuously appropriated to the Economic and Community Development Department.

(2) The Economic and Community Development Department shall administer the Safe Drinking Water Revolving Loan Fund in accordance with a memorandum of understanding between the department and the Department of Human Services.

(3) The Safe Drinking Water Revolving Loan Fund shall consist of:

(a) Moneys transferred to the fund by the Department of Human Services for purposes authorized by the memorandum of understanding between the Department of Human Services and the Economic and Community Development Department.

(b) Moneys transferred to the fund by the federal government, other state agencies or local governments.

(c) Moneys transferred to the fund by the Legislative Assembly or the Oregon Economic and Community Development Commission.

(d) Proceeds from the sale of revenue bonds.

(e) Repayment of financial assistance provided with moneys from the fund.

(f) Interest and other earnings on moneys in the fund.

(4) Moneys in the Safe Drinking Water Revolving Loan Fund shall be used to provide financial or other assistance to publicly owned and privately owned water systems under the Safe Drinking Water Act Amendments of 1996, P.L. 104-182, and rules of the Economic and Community Development Department. As used in this subsection, “assistance” includes direct purchase by the Economic and Community Development Department of goods or services related to a water system project to the extent permitted by the memorandum of understanding between the Economic and Community Development Department and the Department of Human Services, the Safe Drinking Water Act Amendments of 1996, and as authorized by rules of the Economic and Community Development Department.

(5) The owner of a water system may borrow from the Safe Drinking Water Revolving Loan Fund by entering into a loan agreement with the Economic and Community Development Department. The owner of a municipally owned water system may enter into a loan agreement with the department notwithstanding any restriction on indebtedness in the charter or bylaws of the municipality or any other provision of law. Moneys owed to the department by the borrower under a loan agreement may be paid from:

(a) Revenue from any water system project of the borrower, including special assessment revenue;

(b) Amounts withheld under subsection (6) of this section;

(c) The general fund of the borrower;

(d) Any combination of sources listed in paragraphs (a) to (c) of this subsection; or

(e) Any other source.

(6) If a borrower fails to comply with a loan agreement entered into under subsection (5) of this section, the Economic and Community Development Department may seek appropriate legal remedies to secure any repayment due the Safe Drinking Water Revolving Loan Fund. If a borrower defaults on repayment due the fund, the State of Oregon may withhold any amounts otherwise due to the borrower. Any amounts withheld under this subsection shall be credited toward repayment of the borrower’s indebtedness to the fund.

SECTION 3. ORS 285A.213 is added to and made a part of ORS chapter 285A.

SECTION 4. ORS 285A.224 is amended to read:

285A.224. (1) The Legislative Assembly finds that Oregon traded sector industries are experiencing a period of major change and disruption, and that this change is creating severe and unpredictable economic consequences for many communities and workers. It is the purpose of the Economic Stabilization and Conversion Fund to assist communities and workers affected by economic dislocation or the possibility of economic dislocations to evaluate and implement alternative business or community opportunities.

(2) The Economic Stabilization and Conversion Fund is created separate and distinct from the General Fund. The fund shall be administered by the Economic and Community Development Department. The fund may be credited with contributions of moneys from public and private sources and with repayments as provided in this section. Interest earned by the fund shall be credited to the fund.

(3)(a) The Economic and Community Development Department may allocate moneys in the fund for the following purposes:

(A) [Industrial] Business retention service;

(B) Employee ownership;

(D) Feasibility studies.

[(b) Not more than 30 percent of the moneys expended in any biennium from the fund shall be used for the purposes of paragraph (a)(C) of this subsection, nor shall any moneys be expended under paragraph (a)(C) of this subsection unless those funds are matched dollar for dollar from other nonlottery funds.]

(b) The department shall establish the maximum percentage of the fund that may be allocated for the purposes described in paragraph (a) of this subsection and a minimum match requirement, if any.

(4) The Economic and Community Development Department may grant, expend or loan moneys in the fund for financial assistance, feasibility studies, technical assistance and management consulting services for troubled firms that may close without assistance, for troubled firms that are experiencing major layoffs or firms that have actually closed or announced closure, and for communities that are experiencing distress due to the business closures and for the purpose of encouraging employee ownership, under such terms and conditions as the department may determine.

(5) The Economic and Community Development Department shall provide that firms receiving assistance repay to the Economic Stabilization and Conversion Fund any assistance provided under subsection (4) of this section. Such provisions for repayment shall consider the financial ability of the firm to repay assistance.

(6) In providing assistance from the Economic Stabilization and Conversion Fund, the department shall give preference to Oregon’s distressed areas and its traditional agriculture, forestry and fishing industries, and firms competing in markets for which national or international competition exists.

(7) The Economic and Community Development Department shall establish specific criteria for expenditure of funds from the Economic Stabilization and Conversion Fund by adopting rules.

SECTION 5. ORS 285A.340 is amended to read:

285A.340. (1) The Legislative Assembly finds that:

(a) Small businesses have been the major contributors to the increase in traded sector jobs in Oregon.

(b) Small businesses continue to be a major source of employment opportunities for Oregon and that this state ought to encourage the success and growth of small businesses as a means of providing economic opportunities and jobs for Oregonians.

(d) Those small businesses which have at least one employee and which compete in markets for which national or international competition exists have the greatest potential for benefiting the economy of this state.

(e) Access to appropriate business assistance services, rather than the cost of obtaining such services, is a factor limiting the expansion of many small businesses in this state.

[(f) Small businesses that receive services from state-supported business assistance programs ought to pay part of the costs of those services because payment of fees by participating businesses assures that the beneficiaries of program services bear a part of the costs of providing the services, that businesses which do not value the services are discouraged from using them and that programs that provide services for which there is great demand obtain additional resources from program revenues.]

[(g)] (f) Community-based lending programs are particularly well suited to meeting the needs of small businesses that are unable to obtain from private financial institutions the capital that is necessary for expansion.

[(h)] (g) An effective partnership between state and local economic development programs is essential to promoting the development of small businesses in this state.

(2) The Legislative Assembly therefore declares that it is the policy of this state and the purpose of ORS 285A.340 to 285A.349, 285B.074, 285B.159 and 285B.162:

(a) To assist the development of small businesses, with special emphasis on increasing the percentage of businesses owned by women and members of minority groups;

(b) To encourage competition among publicly supported small business service providers in order to supply the most effective, highest quality services to the greatest number of businesses;

(c) To foster cooperation among state agencies, state-supported organizations and private sector entities that provide services to small businesses in order to best meet the needs of small business clients;

(d) To encourage and support the formation of private sector organizations, including trade associations, organizations formed to meet the needs of traded sector industries and similar groups, to serve the needs of the small businesses in this state and, to the maximum extent feasible, to coordinate the small business programs of this state and of such private sector organizations; and

(e) To provide support for organizations that encourage and assist the development and expansion of small businesses in Oregon.

SECTION 6. ORS 285A.346 is amended to read:

285A.346. (1)(a) The Economic and Community Development Department [shall contract for specified periods with public or private organizations or associations that provide business assistance services to small businesses for delivery to small businesses in this state of services that include but are not limited to:] may purchase business assistance services from public or private organizations for delivery to small businesses in this state or may provide grants to public or private organizations to support, aid, stimulate or otherwise affect the delivery of business assistance services to small businesses in this state.

(b) For the purposes of ORS 285A.340 to 285A.349, “business assistance services” includes:

(A) Basic business training, including elements of accounting, personnel management, marketing and tax compliance.

(B) Counseling on business needs and problems.

(D) Assistance in securing Oregon suppliers for goods and services.

[(2) For contracts entered into under this section, the department shall recognize and maintain the policy set forth in ORS 285A.340 (1)(f) relating to fees for business assistance programs for small businesses.]

[(3)] (2) An organization or association that receives state moneys for the purpose of providing business assistance services to small businesses shall comply, to the greatest extent feasible, with the state policies established under ORS 285A.340 to 285A.349.

[(4)] (3) To the extent that federal laws or regulations impose requirements that limit the payment of fees by recipients of business assistance services to small businesses, the Economic and Community Development Department and the providers of those services shall apply for waivers of such federal requirements.

SECTION 7. ORS 285A.349 is amended to read:

285A.349. [(1)] The Economic and Community Development Department shall evaluate the efficiency and effectiveness of the delivery of business assistance services to small businesses under ORS 285A.340 to 285A.349.

[(2) The Economic and Community Development Department, commencing in the biennium beginning on July 1, 1995, and in each biennium thereafter, shall cause an independent evaluation to be made of the system of providing small business services as provided in ORS 285A.340 to 285A.349. After receiving the final report of the person or organization that evaluated the system, the department shall submit a report to the Legislative Assembly concerning the evaluation and other matters involving the administration and implementation of ORS 285A.340 to 285A.349. The report of the department shall include a recommendation, based on the independent evaluation, to continue, modify or terminate the delivery of business assistance services under ORS 285A.340 to 285A.349.]

SECTION 8. ORS 285A.609 is amended to read:

285A.609. (1) There is established within the Economic and Community Development Department the Oregon Ports [Advisory Council] Representation Group consisting of [seven members appointed by the Oregon Economic and Community Development Commission] the general manager and one commissioner, or their designees, from each Oregon port.

(2) The group shall meet at least once each year. A majority of the group constitutes a quorum for the purpose of conducting official business.

(3) The department shall adopt such procedural rules as may be necessary for the group to perform its duties.

[(2) One of the members of the council shall be a designated representative of the Port of Portland.]

[(3) One of the members of the council shall be a designated representative of an industry directly related to, and involved in, maritime commerce or ports development.]

[(4) In addition to the representative of the Port of Portland, four members of the council shall be designated representatives of the public ports of Oregon that are established under ORS chapter 777. One of the four members described in this subsection shall be a representative of a coastal port, one member shall be a representative of a port located on the upper Columbia River above the Bonneville Dam and one member shall be a representative of a port located on the lower Columbia River below the Bonneville Dam. When filling the positions of the four council members described in this subsection, the commission shall consider the recommendations of the Oregon Public Ports Association. Members described in this subsection shall be either elected port commissioners or employed port managers or any combination thereof.]

[(5) One of the members of the council may be a designated representative and member of the Oregon Economic and Community Development Commission. If the commission chooses not to appoint one of its members to the council, the commission shall consider the recommendations of the Oregon Public Ports Association.]

[(6) In addition to the seven members appointed by the Oregon Economic and Community Development Commission, the Senator and the Representative who serve as the presiding officers of the Joint Legislative Committee on Trade and Economic Development or their alternates shall serve as ex officio members of the council without a vote.]

[(7) The appointed members of the council may receive payment for their actual and necessary travel and other expenses as provided in ORS 285A.060 (2).]

[(8) The term of office of each appointed member of the council is four years. Before the expiration of the term of a member, the commission shall appoint a successor whose term begins on July 1 next following. A member is eligible for one reappointment, except that a member appointed to fill a vacancy for a partial term may be reappointed to fill a total of two full terms in addition to the partial term. If there is a vacancy for any cause, the commission shall make an appointment to become effective immediately for the unexpired term.]

SECTION 9. ORS 285A.612 is amended to read:

285A.612. (1) The Oregon Ports [Advisory Council] Representation Group shall:

(a) Serve as a body to advise the Economic and Community Development Department, the Oregon Economic and Community Development Commission, the Governor and the Legislative Assembly on matters relating to the development and implementation of state policies and programs related to ports, and to assist in the coordination of such activities.

(b) Advise the department, the commission, the Governor and the Legislative Assembly on all matters concerning ports that pertain to the powers, duties and functions of the department.

(2) The [council] group, through the [Ports Division] department, shall be responsible for evaluating and developing recommendations for a statewide policy agenda to help guide this state’s efforts to facilitate port development. The agenda, in the form of analyses, conclusions and recommendations, shall serve to help direct this state’s investments in ports, as well as to direct the formation of state and federal policies that affect ports. Such policies shall include, but not be limited to, policies relating to dredging by the United States Army Corps of Engineers, developing multimodal transportation facilities for the movement of goods through ports, converting facilities to productive economic use, resolving natural resource and habitat issues that affect ports and promoting local economic development efforts in port districts.

(3) The [Ports Division] department shall provide the [council] group with staff and other assistance as necessary for the [council] group to perform its duties.

SECTION 10. ORS 285A.618 is amended to read:

285A.618. The Oregon Ports [Advisory Council] Representation Group shall submit a report to the Oregon Economic and Community Development Commission for inclusion in its biennial report to the Legislative Assembly. The report required by this section shall include the findings of the [council] group relating to the effectiveness of current state efforts to promote port development and maritime commerce. The report shall also contain an analysis of conditions that impede increased port development and maritime commerce in Oregon or that hinder the competitiveness of the ports in Oregon. The [council] report shall [make] include recommendations [in its report] for the removal of such conditions.

SECTION 11. ORS 285A.666 is amended to read:

285A.666. As used in ORS 285A.666 to 285A.732, unless the context requires otherwise:

[(1) “Business development project” means the engineering, improvement, rehabilitation, construction, operation or maintenance, in whole or in part, including the preproject planning costs of any business development project authorized by ORS 777.250 (1). The term does not include a flexible manufacturing space project.]

[(2)] (1) “Division” means the Ports Division of the Economic and Community Development Department.

[(3)] (2) “Flexible manufacturing space project” means a project for the acquisition, construction, improvement or rehabilitation, in whole or in part, of any building suitable for the conduct of manufacturing processes and, by design, able to be readily modified when necessary to accommodate the operations of the tenants of the building. The term includes any preproject planning activities for a flexible manufacturing space project.

[(4)] (3) “Fund” means the Oregon Port Revolving Fund.

[(5) “Port development project” means the engineering, improvement, rehabilitation, construction, operation or maintenance, in whole or in part, including the preproject planning costs of any project authorized by ORS 777.105 to 777.258, except projects authorized primarily by ORS 777.250 (1).]

[(6)] (4) “Port district” means any municipal corporation incorporated, or proposed to be incorporated, pursuant to ORS 777.005 to 777.725 and 777.915 to 777.953 or ORS chapter 778.

[(7)] (5) “Project” [means a port development project, a business development project or a flexible manufacturing space project] means a project authorized under ORS 777.105 to 777.258, including engineering, acquisition, improvement, rehabilitation, construction, operation, maintenance or preproject planning necessary to carry out the project.

SECTION 12. ORS 285A.678 is amended to read:

285A.678. The Oregon Economic and Community Development Commission may approve a project proposed in an application filed as provided in ORS 285A.669, if, after investigation, the commission finds that:

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

(2) Moneys in the Oregon Port Revolving Fund are or will be available for the proposed project.

(3) There is a need for the proposed project, and the applicant’s financial resources are adequate to provide the working capital needed to ensure success of the project.

(4) The applicant has received all necessary permits required by federal, state or local agencies.

(5) The applicant [has not received or entered into a contract or contracts exceeding $1.4 million with the commission, under authority of ORS 285A.666 to 285A.732, for the previous 365 days, and provided that no applicant may have more than $2 million in outstanding loans at any one time] will not owe more than $3 million to the Oregon Port Revolving Fund if the loan is approved.

(6) The standards under ORS 285A.055 have been met.

SECTION 13. ORS 285A.681 is amended to read:

285A.681. If the Oregon Economic and Community Development Commission approves the project, the commission, on behalf of the state, and the applicant may enter into a loan contract [of not more than $700,000] that is secured by good and sufficient collateral. The loan contract shall set forth, among other matters:

(1) A plan for repayment by the applicant to the Oregon Port Revolving Fund of moneys borrowed from the fund for the project and interest on the moneys at a rate of interest [for port development projects and flexible manufacturing space projects of not less than five percent or for business development projects] of not less than one percent less than the prevailing interest rate on United States Treasury bills of comparable term, as determined by the commission. The repayment plan, among other matters:

(a) Shall provide for commencement of repayment by the port district of moneys used for the 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. However, upon approval by the commission, a repayment plan for a flexible manufacturing space project may provide that no interest shall accrue until the building is at least 25 percent occupied or until three years after the date of the loan contract, whichever is earlier.

(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 are 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 20 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 such 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) Shall provide for partial or complete repayment, in excess of scheduled payments, of any outstanding principal loan amount without penalty. If any prepayment is made, that amount shall not be included in any computation for the purposes of ORS 285A.678 (5).

(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 Port Revolving Fund for use in the project.

(4) Such further provisions as the commission considers necessary to ensure 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 project financed by the Oregon Port Revolving Fund if the applicant is delinquent in the repayment of any moneys due the Oregon Port Revolving Fund.

SECTION 14. ORS 285A.702 is amended to read:

285A.702. (1) The Oregon Economic and Community Development Commission may authorize funds from the Oregon Port Revolving Fund to be used in appropriate joint governmental participation projects or as match money with any port, state or federally funded project authorized within a port district, subject to the stipulations of ORS 285A.666 to 285A.732.

(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 project.

[(3) The total amount of moneys loaned from the fund for federal, state or local joint project purposes shall not exceed $700,000 per project.]

SECTION 15. ORS 285B.168 is amended to read:

285B.168. (1) The Economic and Community Development Department may make grants available [on a justified need basis] 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) Evidence of the potential demand for assistance;]

[(b) Plans for involving other training resources and expert resource people from the business community in the program;]

[(c) An outline of training options to be available, including subject, training location, electronic availability and other considerations important to the small business community;]

[(d) Plans for the establishment and maintenance, either in a geographically accessible location or in electronic form, of resource information critical to the success of small business;]

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

[(f)] (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, [or] state university or other service providers and other sources; and

[(g)] (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 [community college district, community college service district or state university] 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 [community college district, community college service district or state university] 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 [grants] a grant under subsection (1) of this section, [programs] 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.

SECTION 16. ORS 285B.230 is amended to read:

285B.230. As used in ORS 285B.230 to 285B.269, unless the context requires otherwise:

(1) “Region” means groups of counties designated by the Economic and Community Development Department or recognized in a regional partnership as provided in ORS 285B.236 (3).

(2) “Regional board” means a board comprised of individuals described in ORS 285B.242 (1) and jointly appointed by the county governing bodies of each county in the region to develop, fund, implement and monitor the achievement of the regional investment [plan] strategy.

(3) “Regional investment [plan] strategy” is a long-term economic [and community] development [plan] strategy, updated each biennium, that focuses on the economic [and community] development priorities of each region, including but not limited to:

(a) Supporting communities and populations that have been left out of Oregon’s economic expansion and diversification;

(b) Helping companies that are starting up or are already doing business in Oregon to compete globally;

(d) Coordinating efforts of economic [and community] development, education[,] and workforce development[, natural resource management and other civic activities].

(4) “Regional partnership” means a group of regional and economic development partners, including but not limited to cities, counties, ports, Indian tribes, special districts, nonprofit organizations and private organizations, that join together as a regional partnership in a memorandum of understanding between the members of the partnership and the directors of the Department of Transportation, the Economic and Community Development Department, the Housing and Community Services Department, the Department of Land Conservation and Development, the State Department of Agriculture, the Division of State Lands and the Department of Environmental Quality to provide a forum for coordination of economic [and community] development planning and investments so that strategies and processes for economic [and community] development are leveraged to the greatest extent possible to meet agreed-upon priority issues, challenges and goals.

SECTION 17. ORS 285B.233 is amended to read:

285B.233. (1) The Legislative Assembly finds that regional investment [plans] strategies are essential to the state’s economic [and community] development goals and that to be effective regional investment [plans] strategies must have the coordinated support of available resources.

(2) The Legislative Assembly declares that the purpose of ORS 285B.230 to 285B.269 is:

(a) To encourage the development of regional investment [plans] strategies that address the economic [and community] development priorities of each region of the state;

(b) To identify and coordinate regional economic [and community] development priorities;

(c) To ensure that economic [and community] development plans reinforce the long-term prosperity and livability of Oregon;

(d) To effectively utilize available resources through a regional investment program; [and]

(e) To leverage and attract capital investment in Oregon communities; and

[(e)] (f) To coordinate private and public resources to support economic [and community] development.

SECTION 18. ORS 285B.236 is amended to read:

285B.236. (1) The Economic and Community Development Department, by rule, shall adopt guidelines for submission of regional investment [plans] strategies and distribution of funds.

(2) The guidelines shall provide that the regional investment [plans] strategies are approved in accordance with criteria reflecting the economic [and community] benefits to the state. Each regional investment [plan] strategy must at a minimum set forth in measurable terms the extent to which the [plan] strategy will accomplish the economic [and community] development priorities of the region.

(3) The department, in collaboration with counties, shall establish regions, based on information and advice received from county governing bodies and on historical, cultural and economic links among counties. A region shall consist of at least two contiguous counties. For any area in which a regional partnership is established, the department may accept the regional boundaries designated by the partnership.

(4) The department shall require each region to examine its economic [and community] development needs.

SECTION 19. ORS 285B.239 is amended to read:

285B.239. Regional investment [plans] strategies shall serve as a basis for state financial assistance to projects or activities to meet regional economic [and community] development priorities. Each group of counties that forms a region shall submit a regional investment [plan] strategy that at a minimum shall include the following elements:

(1) An identification of short-term and long-term regional economic [and community] development priorities;

(2) An analysis of the unique or significant resources that provide the foundation for the regional investment [plan] strategy;

(3) An analysis of barriers to implementation of the regional investment [plan] strategy and an identification of the means to overcome those barriers;

(4) A long-term plan to implement the regional investment [plan] strategy, including necessary actions by:

(a) Local governments;

(b) The private sector;

(d) Federal government;

(5) A two-year [implementation plan with a prioritized list of] investment strategy that describes projects [or] and activities to be undertaken or funded by the state from lottery proceeds and other sources. For a region that has a recognized regional partnership under ORS 285B.236, the [prioritized list of] projects or activities may include investment of all or part of the moneys received by the region from the Regional Investment Fund or the Rural Investment Fund to provide moneys for the administration or financing of long-term or future economic [and community] development projects or activities;

(6) A plan for involvement of disadvantaged and minority groups in the region;

(7) Performance measurements for meeting the objective set forth in ORS 285B.236 (2). Each region shall develop an evaluation plan, as part of its regional investment [plan] strategy, for measuring and monitoring regional investment [plan] strategy performance. The evaluation plan shall include regional benchmarks for monitoring achievement of the regional investment [plans] strategies and priorities. When regional benchmarks are established, [interim indicators of] regional performance measures shall be determined after negotiation between the regional board and the Oregon Economic and Community Development Commission. The regional performance measures shall include goals for:

(a) Projected long-term and short-term job creation and retention activities, including the number of jobs created and retained and wage levels;

(b) Leveraging long-term investments; and

(c) Maximizing moneys leveraged with short-term investments;

(8) [The regional board shall periodically submit] Periodic submission by the regional board of performance reports, in a form prescribed by the Economic and Community Development Department for regional investment strategies, to the county governing bodies in the region, the Oregon Economic and Community Development Commission, the Governor and the Legislative Assembly; and

[(8)] (9) An overall strategy management and project or activity implementation [plan] strategy that demonstrates that a region has the capacity to allocate resources and insures that such resources are effectively used.

SECTION 20. ORS 285B.242 is amended to read:

285B.242. (1) The governing body of each county of this state shall be responsible for the submission of a regional investment [plan] strategy as provided in ORS 285B.239. The governing body of a county shall designate a regional board to develop the regional investment [plan] strategy. The regional board shall consist of individuals who represent various local interests including cities, counties, ports, special districts and Indian tribes and significant representation from the private economic sector. The regional board shall include members who are representatives of rural interests, including local government.

(2) The regional board shall be responsible for developing the regional investment [plan] strategy for the region.

(3) The regional board shall hold a public hearing in each county in the region prior to a vote by the governing bodies of the counties to recommend to the Governor the regional investment [plan] strategy described in ORS 285B.239.

(4) In developing the [list] implementation strategy provided for in ORS 285B.239 (5), a regional board shall consult with industries, cities, ports, special districts, regional workforce committees and federally recognized Oregon Indian tribes located in the region.

(5) A region shall submit the regional investment [plan] strategy to the Economic and Community Development Department for review by the Oregon Economic and Community Development Commission. The department shall work with regions to refine regional investment [plans] strategies and ensure compliance with the requirements of ORS 285B.230 to 285B.269. The Oregon Economic and Community Development Commission shall make recommendations on approval of the [plan] strategy to the Governor for final approval or shall return the [plan] strategy to the regional board for further modification.

(6) The Economic and Community Development Department shall be responsible for identifying common issues among regions, developing statewide strategies and organizing opportunities for regions to address them.

(7) After a regional investment [plan] strategy is developed by a regional board, adopted by the governing bodies of the counties and approved by the Governor, the regional board, in each biennium, shall update the [plan] strategy and recommend a two-year implementation [plan] strategy. The implementation [plan] strategy shall be adopted by the governing bodies of the counties after input from the cities, ports, special districts, Indian tribes, private economic sector and other parties in the region, shall be reviewed by the Oregon Economic and Community Development Commission and must be approved by the Governor before taking effect.

(8) The Governor may delegate responsibility for review and approval of a regional investment [plan] strategy to a regional partnership.

SECTION 21. ORS 285B.245 is amended to read:

285B.245. (1) After considering the recommendations submitted, the Governor may adopt a proposed regional investment [plan] strategy or return the [plan] strategy to the affected counties for modification.

(2) The Economic and Community Development Department shall coordinate adopted regional investment [plans] strategies with existing state and local economic development efforts to support a state strategy for economic development. Regions using regional investment funds for tourism or industrial marketing projects must, as a condition for receiving the funds, demonstrate that the projects complement and are consistent with existing statewide marketing campaigns. The department shall work with regions to ensure coordination among statewide marketing efforts and regional tourism and industrial marketing projects funded through the regional investment program established under ORS 285B.230 to 285B.269.

(3) The department shall discourage competition among regions for existing Oregon businesses and economic activity.

SECTION 22. ORS 285B.248 is amended to read:

285B.248. In carrying out the provisions of ORS 285B.230 to 285B.269, the Economic and Community Development Department shall work to ensure that all counties are included in a region with an adopted regional investment [plan] strategy and that each regional investment [plan] strategy is approved for implementation.

SECTION 23. ORS 285B.254 is amended to read:

285B.254. (1) There is created a Rural Investment Fund, separate and distinct from the General Fund, to consist of all moneys credited thereto, including moneys from the Administrative Services Economic Development Fund, and all interest earned on the Rural Investment Fund. The Rural Investment Fund is created to provide a flexible funding source for financing those locally determined programs and projects that may not be eligible for financing through other state and federal funding sources. The moneys in the fund are continuously appropriated to the Economic and Community Development Department to be used to promote economic [and community] development in rural communities.

(2) The department may use moneys in the Rural Investment Fund to pay for the administrative expenses of operating the economic development programs under ORS 285B.257.

(3) After consulting with regional boards and representatives of rural communities, the department, by rule, shall adopt standards, objectives and criteria for the use and distribution of moneys in the Rural Investment Fund.

SECTION 24. ORS 285B.257 is amended to read:

285B.257. (1) Moneys in the Rural Investment Fund shall be distributed to regional boards designated under ORS 285B.242 for economic development programs and projects designed to benefit rural communities.

(2) Each regional board shall update the regional investment [plan] strategy prepared under ORS 285B.239 to include a rural action plan consistent with the purpose and objectives of the Rural Investment Fund. A rural action plan must be reviewed by the Oregon Economic and Community Development Commission and approved by the Governor before any moneys from the Rural Investment Fund may be distributed for implementing any program or project described in the rural action plan. Moneys from the Rural Investment Fund shall not be used to retire any debt or pay for expenditures made or expenses incurred prior to the approval of a rural action plan.

(3) In each biennium, a regional board may dedicate a portion of the moneys distributed to the board from the Rural Investment Fund for technical assistance and staff support for updating the rural action plan and for developing programs and projects under the rural action plan. The regional board shall determine the amount of moneys dedicated to such purposes. Notwithstanding subsection (2) of this section, the Economic and Community Development Department may distribute moneys from the Rural Investment Fund for technical assistance and staff support prior to approval of the rural action plan.

(4) In each biennium, each regional board shall submit a report on the expenditure of moneys received under this section and shall indicate the success of the programs and projects financed with moneys from the Rural Investment Fund. The success of programs and projects shall be defined by specific performance measurements developed by the regional board, and performance reports shall be submitted as required for regional investment strategies under ORS 285B.239 (8). [The report] Reports required by this subsection shall be made part of the biennial report submitted to the Governor and the Legislative Assembly under ORS 285B.263.

(5) Moneys from the Rural Investment Fund shall not be used to substitute for local government expenditures for existing and continuing public services. The Economic and Community Development Department shall adopt rules to carry out the provisions of this subsection.

SECTION 25. ORS 285B.260 is amended to read:

285B.260. (1) There is created a Regional Investment Fund, separate and distinct from the General Fund, to consist of all moneys credited thereto, including moneys from the Administrative Services Economic Development Fund, and all interest earned on the Regional Investment Fund. The fund is continuously appropriated to the Economic and Community Development Department to be used for grants to implement ORS 171.845, 280.518 and 285B.230 to 285B.269.

(2) The department may use moneys in the Regional Investment Fund to pay for the administrative expenses of operating the regional investment program under ORS 285B.230 to 285B.269.

(3) The fund shall not be used to retire any debt or to reimburse any person or municipality for expenditures made or expenses incurred prior to the adoption of a regional investment [plan] strategy.

SECTION 26. ORS 285B.263 is amended to read:

285B.263. (1) In each biennium, the Economic and Community Development Department shall expend moneys from the Regional Investment Fund for:

(a) Technical assistance and staff support for preparation and update of regional investment [plans] strategies;

(b) Projects or activities implementing an approved regional investment [plan] strategy and implementing priorities described in the [plan] strategy; and

(2) In each biennium, the Oregon Economic and Community Development Commission, by rule and in agreement with the Association of Oregon Counties, League of Oregon Cities and Oregon Public Ports Association, may provide funds[, either centrally or to regional boards or both, for multiregion projects or activities that implement the approved regional investment plans of two or more regions with common economic and community development priorities] from any source available to the department to establish strategic regional investment opportunities consistent with the policies described in ORS 285B.266. Funding for [multiregion] projects or activities under this subsection shall be awarded, at the discretion of the commission, according to the quality of the defined projects or activities.

(3) In each biennium, a regional board may dedicate a portion of regional investment funds for technical assistance and staff support for regional investment [plan] strategy development and refinement and development and administration of regional partnerships. The portion of funds so dedicated shall be determined by the commission. The commission shall provide regional boards with these funds prior to approval of regional investment [plans] strategies.

(4) In each biennium, a regional board may dedicate a portion of regional investment funds to provide grants or loans to individual private businesses for fixed asset acquisition. Such funds must be used to make grants and loans that are consistent with the regional investment [plan] strategy and that support the regional priorities included in the regional investment [plan] strategy. The terms and conditions of grants or loans to be made under this subsection must be contained in the regional investment [plan] strategy at the time it is submitted for state review.

(5) After a regional investment [plan] strategy is adopted, the department in each calendar quarter shall provide regional investment funds, less any moneys used for technical assistance and staff support for regional investment [plan] strategy development, to the region. Moneys received under this subsection shall be used for development of projects or activities based upon an evaluation by the regional board of the merit and readiness of the projects or activities. Projects and activities that receive such financial assistance must be consistent with the priorities of the approved regional investment [plan] strategy.

(6) In each biennium, each regional board shall submit a report to the Governor and the Legislative Assembly that describes the expenditure of moneys received under this section and indicates the success, as defined by specified performance measurements, of the funded projects or activities in achieving the regional economic [and community] development priorities described in ORS 285B.236 (2). [Future grants to a regional board may be based on the performance of the board.]

SECTION 26a. (1) Notwithstanding ORS 285B.254 (3), distributions from the Rural Investment Fund created under ORS 285B.254 and the Regional Investment Fund created under ORS 285B.260 shall be evaluated to determine if the regional investment strategy funded by a distribution has met the criteria established by the strategy for:

(a) Long-term and short-term job creation and retention activities, including the number of jobs created and retained and wage levels;

(b) Leveraging long-term investments; and

(c) Maximizing moneys leveraged with short-term investments.

(2) The Economic and Community Development Department shall adopt rules to ensure that future grants to a regional board are based on the past performance of the board in meeting the criteria established for the regional investment strategy described in subsection (1) of this section.

SECTION 26b. Section 26a of this 2003 Act is added to and made a part of ORS 285B.230 to 285B.269.

SECTION 27. ORS 285B.410 is amended to read:

285B.410. As used in ORS 285B.410 to 285B.479, unless the context requires otherwise:

(1) “Community facilities” means municipal facilities that assist the economic and community development of the municipality, as specified in rules adopted by the Economic and Community Development Department, whether operated by the municipality or by a person under a management contract or an operating agreement with the municipality.

(2) “Community facilities project” means a project for the acquisition, construction or development of community facilities, including the acquisition of land, the mitigation of environmental conditions on industrial lands, the construction, acquisition, renovation or reconstruction of buildings, structures and other real property, and the acquisition or construction of related equipment and fixtures.

[(2)] (3) “Direct project management costs” means new expenses incurred by a municipality solely to support, plan for and manage an infrastructure or community facilities project, funded in whole or in part through financial assistance under ORS 285B.410 to 285B.479, during the planning and construction phases of the project.

[(3)] (4) “Infrastructure project” means:

(a) A project for the construction of sewage treatment works, solid waste disposal sites, water supply works, roads, public transportation, railroad industrial spurs or sidings, telecommunications infrastructure, storm drainage systems or other facilities that comprise the physical foundation for industrial and commercial activity. The costs of property acquisition directly related to the infrastructure project and acquisition of easements or rights of way necessary to accomplish construction of the infrastructure project are eligible for assistance under ORS 285B.410 to 285B.479. The costs of activities related to performing an environmental action on a brownfield are eligible for assistance under ORS 285B.416 (2) and 285B.455 (5). Purchases of off-site property for project-related purposes such as wetland mitigation or other uses not directly related to the infrastructure are not eligible for assistance. As used in this paragraph, “brownfield” and “environmental action” have the meanings given those terms respectively in ORS 285A.185 and 285A.188.

(b) A project, in consultation with the Department of Transportation and other affected agencies, for the acquisition, reconstruction or rehabilitation of an abandoned railroad line or railroad line that has been designated by the owner and operator thereof as subject to abandonment within a three-year period pursuant to federal law and regulations governing abandonment of common carrier railroad lines. The project may include operation or maintenance costs if the project also includes acquisition, reconstruction or rehabilitation.

(c) A safe drinking water project, in consultation with the Water Resources Department, the Department of Human Services or the Department of Land Conservation and Development, for improving a drinking water system for the purpose of achieving or maintaining compliance with applicable state or federal drinking water quality regulations.

[(d) A project for the acquisition, construction or development of community facilities, including the acquisition of land, the construction, acquisition, renovation or reconstruction of buildings, structures and other real property and the acquisition or construction of related equipment and fixtures.]

[(e)] (d) A project, as specified by rule of the Economic and Community Development Department, resulting from an emergency as defined in ORS 401.025.

[(4)] (5) “Municipality” means a city, a county, the Port of Portland created by ORS 778.010, a county service district organized under ORS chapter 451, a tribal council of an Indian tribe in this state or a district as defined in ORS 198.010.

[(5)] (6) “Nonurban infrastructure projects” includes all those infrastructure projects which do not meet the definition of urban infrastructure projects.

[(6)] (7) “Public transportation” includes public depots, public parking, public docks, public wharves, railroads and airport facilities.

[(7)] (8) “Roads” includes:

(a) Ways described as streets, highways, throughways or alleys;

(b) Road related structures that are in the right of way such as tunnels, culverts or similar structures; and

[(8)] (9) “Sewage treatment works” includes all facilities necessary for collecting, pumping, treating and disposing of sanitary or storm sewage.

[(9)] (10) “Solid waste disposal site” has the meaning given to the term “disposal site” by ORS 459.005.

(11) “Storm drainage systems” means facilities necessary for collecting, controlling, conveying, treating and disposing of storm water runoff.

[(10)] (12) “Telecommunications infrastructure” means real or personal property, structures or equipment constructed, used or configured for the electronic transmission or receipt of voice, data, text, images or video between sites and facilities.

[(11)] (13) “Urban infrastructure projects” includes all those infrastructure projects located in whole or in part within the acknowledged Portland Metropolitan Area Regional Urban Growth Boundary, and the acknowledged urban growth boundaries of the cities of Eugene, Springfield, Salem, Keizer or Medford or projects that will principally benefit these areas. The Director of the Economic and Community Development Department is authorized to resolve situations left in question by this definition.

[(12)] (14) “Water supply works” includes all facilities necessary for tapping natural sources of domestic and industrial water, treating and protecting the quality of the water and transmitting it to the point of sale to any public or private agency for domestic, municipal and industrial water supply service.

SECTION 28. ORS 285B.413 is amended to read:

285B.413. (1) The Legislative Assembly finds that:

(a) The improvement, expansion and new construction of the state’s sewage treatment works, water supply works, telecommunications infrastructure, roads and public transportation provide the basic framework for continuing and expanding economic activity in this state, thereby providing jobs and economic opportunity for the people of Oregon.

(b) It is essential to maintain usable and developable industrial and commercial lands in Oregon.

(2) Since municipalities in this state often suffer from a lack of available financing and technical capacity for such projects, it is the purpose of ORS 285B.410 to 285B.479 to provide financial or other assistance in order that they may construct, improve and repair those facilities that are essential for supporting continuing and expanded economic activity. It is the intent of the Legislative Assembly, by providing that assistance, to stimulate industrial growth and commercial enterprise and to promote employment opportunities in Oregon.

(3) The money in the Special Public Works Fund shall be used primarily to provide loans to municipalities for infrastructure and community facilities projects. Grants shall be given only when loans are not feasible due to the economic need of the applicant municipality and special circumstances of the project. The Director of the Economic and Community Development Department is authorized to determine the level of grant or loan funding, if any, on a case-by-case basis.

SECTION 29. ORS 285B.416 is amended to read:

285B.416. (1) For purposes of ORS 285B.410 to 285B.479, the total project costs of an infrastructure or community facilities project may include costs for preliminary planning or legal, fiscal and economic investigations, reports and studies to determine the economic and engineering feasibility of the project. These costs may be paid for with a loan or grant from the Special Public Works Fund, by technical assistance grants or loans awarded to eligible municipalities, or by a municipality itself.

(2) The engineering and architectural reports, studies, surveys, designs, plans, working drawings and specifications, and the direct project management costs necessary in the construction of the infrastructure or community facilities project shall be eligible for financial or other assistance under ORS 285B.410 to 285B.479. Proposals for technical assistance grants shall be processed under ORS 285B.419, 285B.422, 285B.428 (2)(a), 285B.437 (2) and 285B.440 (2) in the same manner as other project proposals.

SECTION 30. ORS 285B.419 is amended to read:

285B.419. (1) The Economic and Community Development Department shall adopt rules and policies for the administration of the Special Public Works Fund. Insofar as practicable, the department’s rules shall provide that infrastructure projects that meet the following criteria receive priority for assistance:

(a) Provide for the establishment or enlargement of economically viable industries, with reasonable long term growth prospects, including opportunities for innovative new industries or for continuance of existing basic industries.

(b) Result in a net benefit to the state in the long term and not require continuing state subsidies.

(d) Improve the conditions of the economically disadvantaged and increase the number of jobs that increase average incomes.

(e) Support the development of businesses owned by women and members of minority groups.

(f) Harness Oregon’s comparative advantage with emphasis on the growth and development of existing, in-state businesses, especially small businesses.

(g) Direct assistance to infrastructure projects that assist businesses selling goods and services in markets for which national or international competition exists and prohibit assistance to infrastructure projects that primarily focus on relocating business or economic activity from one part of the state to another.

(h) Result in the economic revitalization of communities.

(i) Are funded and otherwise supported to the maximum extent possible by private resources.

(j) Result in business growth or expansion which would not occur in Oregon without an investment from the Special Public Works Fund.

(2)(a) The Economic and Community Development Department shall manage the Special Public Works Fund and any expenditures from its accounts and transfers between its accounts so that the fund value shall be equal to at least 50 percent of lottery revenues actually transferred to the fund plus interest on such amounts compounded annually at five percent.

(b) If necessary to ensure repayment of bonds issued under ORS 285B.410 to 285B.479, the Economic and Community Development Department is authorized to reduce the value of the fund to less than the limit provided in paragraph (a) of this subsection if the department:

(A) Finds that without such a reduction in fund value, bonds secured by the fund are likely to be in default; and

(B) Imposes a moratorium on grants until the requirements of paragraph (a) of this subsection are met.

(3)(a) Not more than 100 percent of the total cost of any infrastructure or community facilities project shall be financed from the Special Public Works Fund.

(b) For purposes of a project described in ORS 285B.410 [(3)(e)] (4)(d), the total cost described in paragraph (a) of this subsection is the total local matching funds requirement for the federal disaster relief assistance committed to the project.

(4) The department may commit moneys in the Special Public Works Fund or reserve future income to the fund for disbursal in future years under ORS 285B.440 (4). The department shall commit or reserve moneys under this subsection only after:

(a) Allowing for contingencies;

(b) Finding that there will be sufficient unobligated net income to the fund to make such future payments. Such a finding shall be based on financial plans which are consistent with the financial requirements of subsections (2) and (4) of this section; and

(c) Providing in any contract for such commitment that the liability of the state to make such annual payments shall be contingent on the availability of moneys in the Special Public Works Fund.

(5) In assisting local governments with infrastructure and community facilities projects, the department shall cooperate to the maximum extent possible with other state agencies financing [infrastructure] similar projects, including but not limited to the Department of Environmental Quality, the Water Resources Department and the Department of Transportation.

(6) The department shall notify the Housing and Community Services Department of any proposed Special Public Works Fund project with a related workforce increase at the time the department receives the completed application for the project.

SECTION 31. ORS 285B.422 is amended to read:

285B.422. (1) The Economic and Community Development Department may provide financial or other assistance to municipalities for [infrastructure projects that are] community facilities projects as described in ORS 285B.410.

(2) Before providing financial assistance for a community facilities project, the Economic and Community Development Department must find that:

(a) The municipality has demonstrated that the community facilities project will provide long term benefits to the municipality;

(b) The community facilities project will benefit a broad cross-section of the municipality or improve the local economy;

(d) There is a need for the proposed community facilities project, and the municipality’s financial resources are adequate to provide the working capital needed to ensure success of the project.

(3)(a) Except as provided in this subsection and ORS 285B.455 (5), [but] and notwithstanding any other provision of ORS 285B.410 to 285B.479, community facilities projects are not eligible for grants made from the Special Public Works Fund.

(b) Grants from the Special Public Works Fund may be made for a community facilities project that is an essential community facilities project, as determined in accordance with rules adopted by the department after consultation with the League of Oregon Cities, the Association of Oregon Counties, the Oregon Public Ports Association and Special Districts Association of Oregon. Loans or grants from the Special Public Works Fund and loans from the proceeds of revenue bonds issued under ORS 285B.467 may be used to pay issuance costs and for the funding of any debt service reserve for any revenue bonds issued under ORS 285B.467 to finance essential community facilities.

(c) The department shall determine the maximum amount of a grant to a municipality from the Special Public Works Fund for an essential community facilities project. However, a grant may not exceed 85 percent of the total project costs.

(4) ORS 285B.413 (1) and (2), 285B.419 (1), 285B.434 [(2), (3), (4) and (5)], 285B.443 (1)(b)[, 285B.464] and 285B.467 (2) and (8) do not apply to a municipality applying for financial assistance for a community facilities project.

SECTION 32. On the effective date of this 2003 Act, moneys in the Community Facilities Account shall be transferred to other accounts within the Special Public Works Fund as designated by the Director of the Economic and Community Development Department. On and after the effective date of this 2003 Act, all repayments of financial assistance provided from the Community Facilities Account shall be credited to the accounts within the Special Public Works Fund designated by the director.

SECTION 33. ORS 285B.428 is amended to read:

285B.428. (1) Any municipality may file an application with the Economic and Community Development Department to obtain financial or other assistance from the Special Public Works Fund. The application shall be filed in such manner and contain or be accompanied by such information as the department may require.

(2) In addition to other requirements prescribed by the department, an application filed under this section shall:

(a) Describe the nature and purposes of the proposed infrastructure or community facilities project, including the need for the project and the reasons why the project is in the public interest.

(b) Set forth or be accompanied by a feasibility study of the proposed [infrastructure] project and an estimate of the costs of construction.

(c) State whether any moneys other than those in the Special Public Works Fund are proposed to be used for the [infrastructure] project and whether any other moneys are available or have been sought for the project.

(d) Provide, if assistance is to be used for telecommunications infrastructure, a resolution, adopted by the governing body of the municipality after a public hearing, that includes findings and states that the proposed telecommunications infrastructure project is necessary and would not otherwise be provided by a for-profit entity within a reasonable time and for a reasonable cost.

SECTION 34. ORS 285B.431 is amended to read:

285B.431. Upon receipt of an application filed as provided in ORS 285B.428, the Economic and Community Development Department shall determine whether the [feasibility study set forth in or accompanying the] application and accompanying materials are [is] satisfactory, and if the department determines that [it is] either the application or the accompanying materials are not satisfactory it may:

(1) Reject the application;

(2) Require the municipality to submit additional information as may be necessary; or

(3) Make, with the agreement of the municipality, such revisions of the feasibility study as it considers necessary to make the plans for the proposed project satisfactory.

SECTION 35. ORS 285B.437 is amended to read:

285B.437. (1) If the Economic and Community Development Department approves assistance from the Special Public Works Fund for an infrastructure or community facilities project, the department, on behalf of the state, and the municipality may enter into a contract, which shall set forth, among other matters:

(a) An estimate of the reasonable cost of the [infrastructure] project.

(b) An agreement by the municipality to proceed expeditiously with, and complete, the project in accordance with plans reviewed and approved by the department.

(c) A statement that the liability of the state under the contract is contingent upon the availability of moneys in the Special Public Works Fund for use in the [infrastructure] project.

(d) Such other provisions as the department considers necessary to insure expenditure of the moneys for the purposes set forth in the approved application.

(2) When the department approves financial assistance under ORS 285B.410 to 285B.479 for an infrastructure or community facilities project, the department shall pay moneys for the project from the Special Public Works Fund in accordance with the terms of the contract.

(3) The department shall determine and approve a maximum amount of a loan for an infrastructure or community facilities project under ORS 285B.410 to 285B.479 based upon a reasonable and prudent expectation of the municipality’s ability to repay any amount borrowed.

SECTION 36. ORS 285B.438 is amended to read:

285B.438. (1) For the purposes of a project described in ORS 285B.410 [(3)(e)] (4)(d), the Economic and Community Development Department may lend or grant moneys in the Special Public Works Fund to provide local matching funds to a municipality for infrastructure projects to which available federal disaster relief assistance is committed.

(2) ORS 285B.413 (1) and (2), 285B.419 (1), 285B.434 (2), (3), (4), (5), (7) and (8), 285B.464 and 285B.467 (2) and (8) do not apply to the application of a municipality seeking local matching funds for a project eligible under ORS 285B.410 [(3)(e)] (4)(d).

SECTION 37. ORS 285B.440 is amended to read:

285B.440. (1) The maximum amount of any grant to a municipality made from the Special Public Works Fund under ORS 285B.419 shall not exceed $1 million.

(2) No grant to a municipality shall be made for [a] an infrastructure or community facilities project in an amount that exceeds 85 percent of total project costs. A grant to a municipality for a community facilities project shall comply with ORS 285B.422 (3).

(3) The Economic and Community Development Department shall develop standards for determining the maximum proportion of any infrastructure or community facilities project which can be funded by grants. Such standards shall at a minimum provide grants equaling a larger percentage of total project costs for projects with greatest economic need.

(4) A grant contract under ORS 285B.437 (1)(a) to (d) and this section may provide for grants on behalf of the municipality on an annual basis in the form of partial repayment to bondholders of amounts owed them. In such cases, the contract shall provide that moneys are or will be available in the Special Public Works Fund for such annual payments.

SECTION 38. ORS 285B.443 is amended to read:

285B.443. (1) Any contract under ORS 285B.437 (1)(a) to (d) that includes provisions for a loan of state moneys to a municipality or the purchase of a bond of a municipality by the state shall include a plan for repayment by the municipality of moneys borrowed from the Special Public Works Fund for an infrastructure or community facilities project and interest on those moneys at a rate specified in the contract. The repayment plan:

(a) Shall provide for such evidence of debt assurance of, and security for, repayment by the municipality as is considered necessary by the Economic and Community Development Department.

(b) Shall set forth the allocation of special assessments or contractual responsibility among the owners of benefited properties for repayment to the municipality of the amount of the loan.

(c) Shall provide for repayment during a period which shall not exceed the usable life of the proposed project or 25 years, whichever is less.

(2) Notwithstanding any other provision of law, or any restriction on indebtedness contained in a charter, a municipality may borrow from the Special Public Works Fund by entering into a loan contract with the Economic and Community Development Department. The contract may be payable:

(a) From the revenues of [any] the infrastructure or community facilities project, including special assessment revenues;

(b) From amounts withheld under ORS 285B.449 (1);

(d) From any combination of paragraph (a), (b) or (c) of this subsection; or

(e) From any other sources.

(3) The loan contracts under subsection (2) of this section shall be authorized by an ordinance, order or resolution adopted with not less than 14 days’ prior notice. Notice shall be published at least once in a newspaper of general circulation within the municipality.

SECTION 39. ORS 285B.446 is amended to read:

285B.446. (1) The Economic and Community Development Department may enter into contracts to guaranty all or any portion of the obligations of a municipality which are issued to finance an infrastructure or community facilities project and are not sold to the State of Oregon.

(2) Notwithstanding subsection (1) of this section, guaranty contracts shall be payable solely from money in the Special Public Works Fund, and shall not constitute a debt or obligation of the State of Oregon. The department may, on behalf of the state, establish a special account in the fund, and commit to deposit into the account, specified portions of existing and future allocations to the fund. Such commitments shall be made by rule of the department and shall constitute covenants of the state for the benefit of the owners of obligations guaranteed by the state pursuant to this section.

SECTION 40. ORS 285B.452 is amended to read:

285B.452. In addition to making loans to municipalities for infrastructure and community facilities projects and purchasing debt obligations issued to finance [an infrastructure] a project, the Economic and Community Development Department may provide any other form of financial or other assistance that the department may consider appropriate to assist municipalities with [infrastructure] projects including the direct purchase by the department of goods or services related to [an infrastructure] a project.

SECTION 41. ORS 285B.455 is amended to read:

285B.455. (1) There is created the Special Public Works Fund, separate and distinct from the General Fund. All moneys credited to the Special Public Works Fund are appropriated continuously and shall be used for the purposes outlined in ORS 285A.075 (9) and 285B.410 to 285B.479. There shall be credited to the Special Public Works Fund, money appropriated to the fund by the Legislative Assembly, earnings on the fund, repayment of financial assistance and bond proceeds as authorized under ORS 285B.410 to 285B.479.

(2) Moneys in the Special Public Works 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 investments shall be credited to the account in the Special Public Works Fund designated by the Economic and Community Development Department.

(3) The Economic and Community Development Department shall be the agency for the State of Oregon for the administration of the Special Public Works Fund.

(4) The department may establish such other accounts within the Special Public Works Fund for the payment of project costs, reserves, debt service payments, credit enhancement, administration and operation expenses or any other purpose necessary to carry out ORS 285B.410 to 285B.479.

(5) Out of moneys in the Special Public Works Fund, the department may:

(a) Make technical assistance grants and loans to municipalities [of less than 5,000 residents. A technical assistance grant shall not exceed $10,000. A technical assistance loan shall not exceed $20,000]. No more than $400,000 or one percent of the value of the fund, whichever is less, shall be expended on technical assistance grants and loans in any biennium.

(b) Make grants to municipalities to provide local matching funds for the purposes of a project described in ORS 285B.410 [(3)(e)] (4)(d) in an amount that does not exceed $2.5 million in any biennium.

SECTION 42. ORS 285B.458 is amended to read:

285B.458. Not less than 60 percent of the [funds disbursed] grants awarded from the Special Public Works Fund in any biennium shall be used to provide assistance to distressed area [and] or nonurban infrastructure projects.

SECTION 43. ORS 285B.461 is amended to read:

285B.461. (1) Out of the moneys in the Special Public Works Fund the Economic and Community Development Department may expend funds for the purposes of administering ORS 285B.410 to 285B.479. Administrative expenses of the department that are paid from the Special Public Works Fund may not exceed four percent of the total assets of the fund reduced by the bonded debt liabilities in any one year.

(2) As used in this section, “administrative expenses” includes the department’s costs for:

(a) Investigating, approving and monitoring municipalities that apply for assistance for infrastructure or community facilities projects and servicing and collecting outstanding loans and grants made to municipalities; and

(b) Contracting for planning and technical assistance and other support services for municipalities.

SECTION 44. ORS 285B.464 is amended to read:

285B.464. Notwithstanding any other provision of ORS 285B.410 to 285B.479, the costs of administering infrastructure, community facilities and community development projects that are related to the purpose of the community development block grant program may be charged to the Special Public Works Fund and used as a match for federal funds available for the administration of community development block grant funds.

SECTION 45. ORS 285B.467 is amended to read:

285B.467. (1) The Economic and Community Development Department shall adopt by rule standards by which to determine the eligibility for revenue bond financing under ORS 285B.467 to 285B.479 of infrastructure and community facilities projects that have qualified under ORS 285B.419 to 285B.437 and 285B.449.

(2) In adopting rules establishing guidelines or criteria for awarding loans or grants for drinking water projects, the department shall coordinate the department’s rulemaking process with the Water Resources Department and the Department of Human Services in order to assure that rules adopted under this subsection are consistent with rules adopted under ORS 431.120 and 541.845. The rules adopted under this subsection shall:

(a) Require the installation of meters on all new service connections to any distribution lines funded under ORS 285B.410, 285B.461, 285B.560 to 285B.599, 431.120, 541.700, 541.705, 541.755, 541.765, 541.830, 541.845 and this section; and

(b) Require a plan, to be adopted by the municipality, for installation of meters on all service connections throughout the drinking water system.

(3) Upon determining an infrastructure or community facilities project eligible for revenue bond financing under ORS 285B.467 to 285B.479, the department shall forward the application to the State Treasurer, who shall determine whether to issue revenue bonds.

(4) Notwithstanding ORS 285B.410 [(3)(a)] (4)(a) and 285B.416 (1), when an infrastructure or community facilities project is determined to be eligible for revenue bond financing under ORS 285B.467 to 285B.479, direct project management costs and the costs for preliminary planning or legal, fiscal and economic investigations, reports and studies to determine the economic and engineering feasibility of the project are included within the total project costs of the project and may be paid from bond proceeds.

(5) Administrative expenses of the department in processing applications and investigating proposed infrastructure and community facilities projects and bond sales shall not be derived from bond proceeds.

(6) The department may pledge all or any portion of the existing or future assets and receipts of the Special Public Works Fund to pay debt service on bonds issued pursuant to ORS 285B.410 to 285B.479. Such pledge shall take effect immediately, without delivery of the pledged funds to third parties, and the lien of the pledge shall be superior to all other liens of any nature.

(7) The department is authorized to establish separate accounts within the fund for separate bond issues.

(8) As used in this section, “service connection” does not include fire hydrants, fire sprinkler system connections, line blow-offs and drains, stand-by emergency interties, valve controlled drinking fountains and other similar intermittently used connections.

SECTION 46. ORS 285B.470 is amended to read:

285B.470. In addition to any other powers granted by law in relation to an infrastructure or community facilities project, the Economic and Community Development Department, acting through the State Treasurer or designee may:

(1) Make all contracts, execute all instruments and do all things necessary or convenient in the exercise of the powers granted by this section, or in the performance of its covenants or duties, or in order to secure the payment of its bonds;

(2) Enter into and perform such contracts and agreements with municipalities as the department may consider proper and feasible for or concerning the planning, construction, installation, lease or other acquisition, and the financing of [infrastructure] projects; and

(3) Enter into covenants for the benefit of bond owners regarding the use and expenditure of moneys in the Special Public Works Fund.

SECTION 47. ORS 285B.473 is amended to read:

285B.473. If the State Treasurer determines that revenue bonds should be issued:

(1) The State Treasurer may authorize and issue in the name of the State of Oregon revenue bonds secured by moneys paid to the Special Public Works Fund pledged therefor to finance or refinance in whole or part the cost of acquisition, construction, reconstruction, improvement or extension of infrastructure and community facilities projects. The bonds shall be issued in the manner prescribed by ORS chapter 286, and refunding bonds may be issued to refinance such revenue bonds.

(2) The State Treasurer shall designate the underwriter and enter into appropriate agreements with the underwriter to carry out the provisions of ORS 285B.467 to 285B.479. The Economic and Community Development Department, with the approval of the State Treasurer, shall designate the trustee and enter into appropriate agreements with the trustee to carry out the provisions of ORS 285B.467 to 285B.479. The department may appoint bond counsel as authorized by ORS 288.523, or the State Treasurer may enter into an agreement with bond counsel if the services provided under the agreement comply with the provisions of ORS 288.523 and the appointment is approved by the Attorney General as required by ORS 288.523. The department may not make an appointment or enter into an agreement under this subsection unless the State Treasurer has reviewed and approved the terms and conditions of the appointment or agreement. ORS 279.712 does not apply to any appointment or agreement described in this subsection.

SECTION 48. ORS 285B.476 is amended to read:

285B.476. (1) ORS 285B.350 to 285B.362 and 285B.368 apply to revenue bonds issued under ORS 285B.467 to 285B.479.

(2) The proceeds of revenue bonds issued and sold under ORS 285B.467 to 285B.479 shall be deposited in the Special Public Works Fund and used for the payment of a loan to a municipality for an infrastructure or community facilities project and costs of issuing the revenue bonds.

(3) A loan made with money derived from the sale of revenue bonds under this section shall be made as other loans under ORS 285B.419 to 285B.437, 285B.443 and 285B.449 are made, except that the loan contract shall set forth a schedule of payments which shall not exceed the usable life of the contracted [infrastructure] project.

SECTION 49. ORS 285B.482 is amended to read:

285B.482. (1) Notwithstanding any other law relating to revenue bonds issued and sold under ORS 285B.467 to 285B.479 or ORS 285B.572, 285B.575 and 285B.578, such revenue bonds may be issued and sold as parity bonds.

(2) Proceeds of revenue bonds issued and sold under ORS 285B.467 to 285B.479 or ORS 285B.572, 285B.575 and 285B.578, together with the investment earnings thereon, may be consolidated into one or more funds or accounts and may be pledged to the holders of revenue bonds issued to finance [either] water projects, [or] infrastructure projects or [to the holders of revenue bonds issued to finance both water projects and infrastructure projects] community facilities projects.

(3) Any loan to a municipality made pursuant to ORS 285B.467 to 285B.479, 285B.560 to 285B.569 or 285B.572 to 285B.599, including loans funded in whole or in part with the proceeds of revenue bonds and loans funded with moneys in the Water Fund or the Special Public Works Fund, may be pledged to the holders of revenue bonds issued to finance [either] water projects, [or] infrastructure projects or [to the holders of revenue bonds issued to finance both water projects and infrastructure projects] community facilities projects.

(4) Funds or accounts established by the Economic and Community Development Department or the State Treasurer in connection with the issuance of revenue bonds under ORS 285B.467 to 285B.479 or ORS 285B.572, 285B.575 and 285B.578 and moneys held in the funds and accounts, together with the investment earnings thereon, may be consolidated into one or more funds or accounts and may be pledged to the holders of revenue bonds issued to finance [either] water projects, [or] infrastructure projects or [to the holders of revenue bonds issued to finance both water projects and infrastructure projects] community facilities projects.

(5) Notwithstanding subsections (1) to (4) of this section, moneys held in the Water Fund shall not be used to finance or refinance the cost of an infrastructure project or a community facilities project unless the infrastructure project or community facilities project also qualifies as a water project, and moneys held in the Special Public Works Fund shall not be used to finance or refinance the cost of a water project unless the water project also qualifies as an infrastructure project or community facilities project.

SECTION 50. ORS 285B.563 is amended to read:

285B.563. (1) There is established in the State Treasury, separate and distinct from the General Fund, the Water Fund. All moneys in the fund are continuously appropriated to the Economic and Community Development Department [to provide financing for water projects, as] for the purposes described in ORS 285B.560 to 285B.599, including the direct project management costs and for the purpose specified in ORS 285A.075 (9).

(2)(a) Moneys in the Water Fund may be obligated to water projects.

(b) Moneys shall be used primarily to make loans to municipalities. The department may make a loan only if:

(A) The municipality applying for the loan certifies to the department that adequate funds will be available to repay the loan; and

(B) The department determines that the amount of the loan applied for is based on a reasonable and prudent expectation of the municipality’s ability to repay the loan.

(A) Financial hardship to the municipality, as determined by the department, based on consideration of anticipated water service charges or anticipated waste water service charges that exceed the statewide average for such charges, the per capita income of the municipality and such other factors as the department by rule may establish; and

(B) Special circumstances of the water project.

(d) The department may determine the amount of grant or loan funding on a case-by-case basis.

(3) The moneys in the fund may also be used to assist the department in selling revenue bonds on behalf of municipalities in order to carry out the purposes of ORS 285B.560 to 285B.599.

(4) With the approval of the State Treasurer, moneys in the Water Fund may be invested as provided by ORS 293.701 to 293.820. The earnings from such investments and other program income shall be credited to the Water Fund.

(5) The Water Fund shall consist of:

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

(b) Moneys transferred to the fund by the Economic and Community Development Department from the Special Public Works Fund created by ORS 285B.455.

(c) Moneys transferred to the fund by the Water Resources Commission from the Water Development Fund created by Article XI-I(1) of the Oregon Constitution.

(d) Moneys from any federal, state or other grants.

(e) Proceeds of revenue bonds issued under ORS 285B.575.

(f) Earnings on the fund.

(6) The department shall administer the fund.

(7) The department shall adopt rules and policies for the administration of the fund. The department shall coordinate its rulemaking regarding safe drinking water projects with the Water Resources Department and the Department of Human Services. The rules adopted under this subsection for safe drinking water projects shall:

(a) Require the installation of meters on all new service connections to any distribution lines funded with moneys from the fund or from the proceeds of revenue bonds issued under ORS 285B.572 to 285B.578.

(b) Require a plan, to be adopted by a municipality receiving financial assistance from the fund, for installation of meters on all service connections throughout the drinking water system not later than two years after the completion of a safe drinking water project.

(8)(a) The Economic and Community Development Department shall manage the Water Fund and any expenditures from accounts in the fund and transfers between accounts so that the fund value shall be equal to at least 50 percent of lottery revenues actually transferred to the fund plus interest on such amounts compounded annually at five percent.

(b) If necessary to ensure repayment of bonds issued under ORS 285B.560 to 285B.599, the department may reduce the value of the fund to less than the limit established in paragraph (a) of this subsection when the department:

(A) Finds that without such a reduction in fund value, bonds secured by the fund are likely to be in default; and

(B) Imposes a moratorium on grants until the requirements of paragraph (a) of this subsection are satisfied.

(9)(a) The department may charge administrative costs to the fund, but not to moneys segregated in the account created by subsection (11) of this section, to pay for administrative expenses incurred by the department.

(b) As used in this section, “administrative expenses” includes:

(A) The direct and administrative costs of processing applications, investigating water projects, monitoring recipients of financing for water projects and servicing and collecting outstanding financial awards made for water projects; and

(B) The costs of contracting for planning and technical assistance services and other support services for municipalities.

(c) To the extent permitted by federal law, administrative expenses of the department as limited in this subsection that are paid from the fund shall not exceed four percent of the total assets of the fund reduced by the bonded debt liabilities in any one year. Administrative expenses of the department as limited in this subsection may be paid from bond proceeds.

(10) The department may establish other accounts within the Water Fund for the payment of water projects costs, reserves, debt service payments, credit enhancements, costs of issuing revenue bonds, administrative and operating expenses or any other purpose necessary to carry out ORS 285B.560 to 285B.599.

(11) There is created within the Water Fund a separate and distinct account for the proceeds from the sale of water development general obligation bonds issued for safe drinking water projects and credited to the special account under this section. Any investment earnings thereon shall be segregated in and continuously appropriated to a special, separately accounted for subaccount of this account. Moneys credited to this account shall be maintained separate and distinct from moneys credited to subaccounts created under subsection (10) of this section. Notwithstanding ORS 285B.566 or subsection (4) of this section, all repayments of moneys loaned from the account created by this subsection, including interest on such moneys, shall be credited to the Water Development Administration and Bond Sinking Fund created by ORS 541.830.

SECTION 51. ORS 285B.593 is amended to read:

285B.593. Out of the moneys in the Water Fund, the Economic and Community Development Department may make technical assistance grants and loans to municipalities [with fewer than 5,000 residents] as specified by the department by rule. Technical assistance grants and loans shall be for the purpose of completing preliminary planning, legal, fiscal and economic investigations, reports and studies to determine the economic and engineering feasibility of water projects. [A technical assistance grant shall not exceed $10,000. A technical assistance loan shall not exceed $20,000.]

SECTION 52. ORS 285B.596 is amended to read:

285B.596. Not less than 60 percent of the [moneys appropriated to] grants awarded from the Water Fund shall be used to provide assistance to distressed area [and] or nonurban water projects.

SECTION 53. ORS 285B.839 is amended to read:

285B.839. (1) Following the designation of a vertical housing development zone under ORS 285B.833, a person proposing to construct a vertical housing development project and seeking the partial property tax exemption set forth in ORS 285B.845 shall apply to the Economic and Community Development Department for certification.

(2) The application shall be on a form prescribed by the department and shall contain any information required by the department, including all of the following:

(a) The address of the proposed vertical housing development project;

(b) A description of the existing state of the property;

(d) A description of the commercial uses to which the first floor or lower floors are to be put; and

(e) A description of the residential housing to be located on the upper floor or floors of the proposed vertical housing development project.

(3) The application must be filed under this section on or before the date residential units that are a part of the vertical housing development project are ready for occupancy.

(4) The department shall review each application submitted under this section and shall certify or deny certification based on whether the proposed vertical housing development project meets the criteria set forth in ORS 285B.842.

(5) The department may request any documentation or undertake any investigation necessary to ascertain the veracity of any statement made on an application under this section.

(6) The department shall certify or deny certification within 60 days following the date the application is filed with the department.

(7) A denial of certification may be appealed to the department in the manner of a contested case under ORS 183.310 to 183.550.

(8) The department may charge an application fee to offset the cost of administering the application and certification process under this section.

SECTION 54. ORS 657.665 is amended to read:

657.665. (1) Information secured from employing units, employees or other individuals pursuant to this chapter:

(a) Shall be confidential and for the exclusive use and information of the Director of the Employment Department in the discharge of duties and shall not be open to the public (other than to public employees in the performance of their public duties under state or federal laws for the payment of unemployment insurance benefits and to public employees in the performance of their public duties under the recognized compensation and retirement, relief or welfare laws of this state), except to the extent necessary for the presentation of a claim and except as required by the regulations of the United States Secretary of Health and Human Services pursuant to section 3304(a) of the Federal Unemployment Tax Act, as amended, and except as required by section 303 of the Social Security Act, as amended.

(b) Shall not be used in any court in any action or proceeding pending therein unless the director or the state is a party to such action or proceedings or the proceedings concern the establishment, enforcement or modification of a support obligation and support services are being provided by the Division of Child Support or the district attorney pursuant to ORS 25.080.

(2) However, any claimant or legal representative, at a hearing before a hearing officer, shall be supplied with information from such records to the extent necessary for the proper presentation of a claim.

(3) Notwithstanding subsection (1) of this section, information secured from employing units pursuant to this chapter may be released:

(a) To agencies of this state, [and political subdivisions acting alone or in concert in city, county, metropolitan, regional or state planning] federal agencies and local government agencies to the extent necessary to properly carry out governmental planning, performance measurement, program analysis, socioeconomic analysis and policy analysis functions performed under applicable law. Information provided such agencies shall be confidential and shall not be released by such agencies in any manner that would be identifiable as to individuals, claimants, employees or employing units. Costs of furnishing information pursuant to this subsection not prepared for the use of the Employment Department shall be borne by the parties requesting the information; and

(b) In accordance with ORS 657.673.

(4) Nothing in this section shall prevent the Employment Department from providing names and addresses of employing units to the Bureau of Labor and Industries for the purpose of disseminating information to employing units. The names and addresses provided shall be confidential and shall not be used for any other purposes. Costs of furnishing information pursuant to this subsection not prepared for the use of the Employment Department shall be borne by the bureau.

(5) Nothing in this section shall prevent the Employment Department from providing to the Commissioner of the Bureau of Labor and Industries, for the purpose of performing duties under ORS 279.348 to 279.380, the names, addresses and industrial codes of employer units, the number of employees each unit employs during a given time period and the firm number assigned to employer units by the Employment Department. Information so provided shall be confidential and shall not be released by the commissioner in any manner that would identify such employing units except to the extent necessary to carry out the purposes of this subsection and as provided in subsection (1)(b) of this section. Costs of furnishing information pursuant to this subsection not prepared for the use of the Employment Department shall be borne by the bureau.

(6) Nothing in this section shall prevent the Employment Department from providing information required under ORS 657.660 (3) and (4) to the Public Employees Retirement System for the purpose of determining the eligibility of members of the retirement system for disability retirement allowances under ORS chapter 238. The information provided shall be confidential and shall not be used for any other purposes. Costs of furnishing information pursuant to this subsection shall be borne by the Public Employees Retirement System.

(7) Nothing in this section shall prevent the Employment Department from providing to the Oregon Economic and Community Development Commission information required by the commission in performing its duty under ORS 285A.050 to verify changes in employment levels following direct employer participation in Economic and Community Development Department programs or indirect participation through municipalities under ORS 285B.410 to 285B.479 and regional boards and partnerships under ORS 285B.230 to 285B.269. Information provided to the commission may include an employer’s employment level, total subject wages payroll and whole hours worked. The information may not be used for any other purpose and must be held confidential. The commission may not release the information in any manner that would identify the employing unit or any employee except to the extent necessary to carry out its duties under ORS 285A.050. Costs of furnishing information under this subsection that is not prepared for the use of the Employment Department shall be borne by the commission.

[(7)] (8) Any officer or employee of the Director of the Employment Department, who, except with authority of the director or pursuant to regulations, or as otherwise required by law, shall disclose confidential information under this section, thereafter may be disqualified from holding any appointment or employment by the director.

[(8)] (9) Nothing in this section shall prevent the Employment Department from providing information to the Department of Revenue for the purpose of performing its duties under ORS 293.250, or the revenue and tax laws of this state. Information provided may include names and addresses of employers and employees and payroll data of employers and employees. Information so provided shall be confidential and shall not be released by the Director of the Department of Revenue in any manner that would identify such employing unit or employee except to the extent necessary to carry out its duties under ORS 293.250 or in auditing or reviewing any report or return required or permitted to be filed under the revenue and tax laws administered by the department. However, the Director of the Department of Revenue shall not disclose any information received to any private collection agency or for any other purpose. Costs of furnishing information pursuant to this subsection not prepared for the use of the Employment Department shall be borne by the Department of Revenue.

[(9) Nothing in this section shall prevent the Employment Department from providing information to the Department of Consumer and Business Services for the purpose of performing its duties under ORS chapter 656. Information provided may include names and addresses of employers and employees and payroll data of employers and employees. Information so provided shall be confidential and shall not be released by the Director of the Department of Consumer and Business Services in any manner that would identify such employing unit or employee except to the extent necessary to carry out its duties under ORS chapter 656. However, the Director of the Department of Consumer and Business Services shall not disclose any information received to any private collection agency or for any other purpose. Costs of furnishing information pursuant to this subsection not prepared for the use of the Employment Department shall be borne by the Department of Consumer and Business Services.]

(10) Nothing in this section shall prevent the Employment Department from providing information to the Department of Consumer and Business Services for the purpose of performing its duties under ORS chapters 654 and 656. Information provided may include but is not limited to the name, address, number of employees and industrial classification code of an employer and payroll data of employers and employees. Information provided shall be confidential and may not be released by the Department of Consumer and Business Services in any manner that would identify an employing unit or employee except to the extent necessary to carry out the department’s duties under ORS chapters 654 and 656, including administrative hearings and court proceedings in which the Department of Consumer and Business Services is a party. Costs of furnishing information pursuant to this subsection that is not prepared for the use of the Employment Department shall be borne by the Department of Consumer and Business Services.

[(10)] (11) Nothing in this section shall prevent the Employment Department from providing information to the Construction Contractors Board for the purpose of performing its duties under ORS chapter 701. Information provided to the board may include names and addresses of employers and status of their compliance with this chapter.

[(11)] (12) Nothing in this section shall prevent the Employment Department from providing information to the State Fire Marshal to assist the State Fire Marshal in carrying out duties, functions and powers under ORS 453.307 to 453.414. Information so provided shall be the employer or agent name, address, telephone number and standard industrial classification. Information so provided shall be confidential and shall not be released by the State Fire Marshal in any manner that would identify such employing units except to the extent necessary to carry out duties under ORS 453.307 to 453.414. Costs of furnishing information pursuant to this subsection not prepared for the use of the Employment Department shall be borne by the office of the State Fire Marshal.

[(12)] (13) Nothing in this section shall prevent the Employment Department from providing information to the Oregon Student Assistance Commission for the purposes of performing the commission’s duties under ORS chapter 348 and Title IV of the Higher Education Act of 1965, as amended. Information provided may include names and addresses of employers and employees and payroll data of employers and employees. Information so provided shall be confidential and shall not be released by the Oregon Student Assistance Commission in any manner that would identify such employing unit or employee except to the extent necessary to carry out duties under ORS chapter 348 or Title IV of the Higher Education Act of 1965, as amended. Costs of furnishing information pursuant to this subsection not prepared for the use of the Employment Department shall be borne by the Oregon Student Assistance Commission.

[(13)] (14) Any person or officer or employee of an entity to whom information is disclosed or given by the Employment Department pursuant to this section, who divulges or uses such information for any purpose other than that specified in the provision of law or agreement authorizing the use or disclosure, may be disqualified from holding any appointment or employment, or performing any service under contract, with the state agency employing that person or officer.

(15) Notwithstanding subsection (1) of this section, the industrial classification code assigned to an employing unit may be released to state agencies, federal agencies and local government agencies to the extent necessary to carry out governmental functions performed under applicable law. Information provided to such agencies is confidential and may not be released by the agencies in any manner that would allow identification of an employing unit. Costs of furnishing information that is not prepared for the use of the Employment Department shall be paid by the party requesting the information under this subsection.

SECTION 54a. If House Bill 3120 becomes law, ORS 657.665, as amended by section 54 of this 2003 Act, is amended to read:

657.665. (1) Information secured from employing units, employees or other individuals pursuant to this chapter:

(3) Notwithstanding subsection (1) of this section, information secured from employing units pursuant to this chapter may be released:

(a) To agencies of this state, federal agencies and local government agencies to the extent necessary to properly carry out governmental planning, performance measurement, program analysis, socioeconomic analysis and policy analysis functions performed under applicable law. Information provided such agencies shall be confidential and shall not be released by such agencies in any manner that would be identifiable as to individuals, claimants, employees or employing units. Costs of furnishing information pursuant to this subsection not prepared for the use of the Employment Department shall be borne by the parties requesting the information; and

(b) In accordance with ORS 657.673.

(8) Any officer or employee of the Director of the Employment Department, who, except with authority of the director or pursuant to regulations, or as otherwise required by law, shall disclose confidential information under this section, thereafter may be disqualified from holding any appointment or employment by the director.

(9) Nothing in this section shall prevent the Employment Department from providing information to the Department of Revenue for the purpose of performing its duties under ORS 293.250, or the revenue and tax laws of this state. Information provided may include names and addresses of employers and employees and payroll data of employers and employees. Information so provided shall be confidential and shall not be released by the Director of the Department of Revenue in any manner that would identify such employing unit or employee except to the extent necessary to carry out its duties under ORS 293.250 or in auditing or reviewing any report or return required or permitted to be filed under the revenue and tax laws administered by the department. However, the Director of the Department of Revenue shall not disclose any information received to any private collection agency or for any other purpose. Costs of furnishing information pursuant to this subsection not prepared for the use of the Employment Department shall be borne by the Department of Revenue.

(11) Nothing in this section shall prevent the Employment Department from providing information to the Construction Contractors Board for the purpose of performing its duties under ORS chapter 701. Information provided to the board may include names and addresses of employers and status of their compliance with this chapter.

(12) Nothing in this section shall prevent the Employment Department from providing information to the State Fire Marshal to assist the State Fire Marshal in carrying out duties, functions and powers under ORS 453.307 to 453.414. Information so provided shall be the employer or agent name, address, telephone number and standard industrial classification. Information so provided shall be confidential and shall not be released by the State Fire Marshal in any manner that would identify such employing units except to the extent necessary to carry out duties under ORS 453.307 to 453.414. Costs of furnishing information pursuant to this subsection not prepared for the use of the Employment Department shall be borne by the office of the State Fire Marshal.

(13) Nothing in this section shall prevent the Employment Department from providing information to the Oregon Student Assistance Commission for the purposes of performing the commission’s duties under ORS chapter 348 and Title IV of the Higher Education Act of 1965, as amended. Information provided may include names and addresses of employers and employees and payroll data of employers and employees. Information so provided shall be confidential and shall not be released by the Oregon Student Assistance Commission in any manner that would identify such employing unit or employee except to the extent necessary to carry out duties under ORS chapter 348 or Title IV of the Higher Education Act of 1965, as amended. Costs of furnishing information pursuant to this subsection not prepared for the use of the Employment Department shall be borne by the Oregon Student Assistance Commission.

(14) Any person or officer or employee of an entity to whom information is disclosed or given by the Employment Department pursuant to this section, who divulges or uses such information for any purpose other than that specified in the provision of law or agreement authorizing the use or disclosure, may be disqualified from holding any appointment or employment, or performing any service under contract, with the state agency employing that person or officer.

(15) Notwithstanding subsection (1) of this section, the industrial classification code assigned to an employing unit may be released to state agencies, federal agencies and local government agencies to the extent necessary to carry out governmental functions performed under applicable law. Except as provided in section 10, chapter 749, Oregon Laws 2003 (Enrolled House Bill 3120), information provided to such agencies is confidential and may not be released by the agencies in any manner that would allow identification of an employing unit. Costs of furnishing information that is not prepared for the use of the Employment Department shall be paid by the party requesting the information under this subsection.

SECTION 55. Section 19, chapter 607, Oregon Laws 1987, as amended by section 2, chapter 539, Oregon Laws 1991, is amended to read:

Sec. 19. (1) Notwithstanding ORS 285A.708 (1) and 285A.711, available moneys in the Oregon Port Revolving Fund that were accrued as net earned income of the fund may be transferred to the Port Planning and Marketing Fund created under ORS 285A.654.

(2) Notwithstanding ORS 285A.654 (1)(b), moneys transferred to the Port Planning and Marketing Fund under this section may be used for payments of grants under ORS 285A.654 to 285A.660 to ports incorporated under ORS 285A.603 to 285A.732 or ORS chapter 777 or 778.

(3) In addition to and notwithstanding any other law, an amount not to exceed [1.5] four percent of the assets of the Oregon Port Revolving Fund as calculated on July 1 of each year shall be transferred to the Port Planning and Marketing Fund under this section.

SECTION 56. ORS 285A.343 and section 20, chapter 607, Oregon Laws 1987, are repealed.

SECTION 57. ORS 285B.464 and 285B.482 are added to and made a part of ORS 285B.410 to 285B.479.

SECTION 58. The Oregon Economic and Community Development Commission shall develop a mission statement for the Economic and Community Development Department that gives the highest priority to promoting job development in Oregon by:

(1) Assisting existing companies that desire to expand;

(2) Assisting existing companies that desire to develop new products;

(3) Promoting the commercialization of technology developed at colleges and universities in Oregon;

(4) Recruiting businesses in targeted industries to locate in Oregon;

(5) Providing assistance to communities for local economic development efforts; and

(6) Developing infrastructure for communities that supports local economic development efforts.

SECTION 59. The Oregon Economic and Community Development Commission shall recommend legislation to the Seventy-third Legislative Assembly to modify ORS 285A.090 to reflect the priorities established under section 58 of this 2003 Act.

SECTION 60. (1) The Oregon Economic and Community Development Commission shall establish regions for the purpose of job development and community assistance by the Economic and Community Development Department. When establishing the regions, the commission must consider the optimal size for each region that will most effectively facilitate economic development activities in the region. Regions established by the commission do not have to be of the same size or population.

(2) The Director of the Economic and Community Development Department shall provide for economic innovation coordination in the central office, which shall assist the field representatives in:

(a) Establishing contacts between local businesses and universities and community colleges in Oregon to promote the use of the research capacities of these institutions for development of new products; and

(b) Serving as a liaison between the clients of the Economic and Community Development Department and the Oregon Council for Knowledge and Economic Development to promote effective linkage between regional economic development efforts and technological advances in Oregon.

Approved by the Governor September 17, 2003

Filed in the office of Secretary of State September 18, 2003

Effective date January 1, 2004

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