76th OREGON LEGISLATIVE ASSEMBLY--2011 Regular Session
NOTE: Matter within { + braces and plus signs + } in an
amended section is new. Matter within { - braces and minus
signs - } is existing law to be omitted. New sections are within
{ + braces and plus signs + } .
LC 1952
A-Engrossed
Senate Bill 494
Ordered by the Senate March 4
Including Senate Amendments dated March 4
Sponsored by Senator BONAMICI, Representative DOHERTY; Senators
BATES, BOQUIST, DEVLIN, DINGFELDER, EDWARDS, HASS, JOHNSON,
MONNES ANDERSON, MONROE, MORSE, PROZANSKI, ROSENBAUM, STARR,
VERGER, WINTERS, Representatives GREENLICK, HARKER, HUNT,
NATHANSON (Presession filed.)
SUMMARY
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure.
Eliminates sunset on provisions related to business development
loans and entrepreneurial development loans.
Removes requirement that { + emerging + } small business
enterprise qualifying for loan from Oregon Business Development
Fund be certified { - emerging - } small business enterprise.
{ + Allows Oregon Business Development Department to loan
specified amount of moneys from fund during current fiscal year
that department did not spend during previous fiscal year. + }
Declares emergency, effective on passage.
A BILL FOR AN ACT
Relating to loans for economic development; creating new
provisions; amending ORS 285B.050, 285B.059, 285B.080, 285B.746
and 285B.749; repealing section 9, chapter 106, Oregon Laws
2010; and declaring an emergency.
Be It Enacted by the People of the State of Oregon:
SECTION 1. ORS 285B.050 is amended to read:
285B.050. As used in ORS 285B.050 to 285B.098, unless the
context requires otherwise:
(1) 'Applicant' means any county, municipality, person or any
combination of counties, municipalities or persons applying for a
loan from the Oregon Business Development Fund under ORS 285B.050
to 285B.098.
(2) 'Business development project' means the acquisition,
engineering, improvement, rehabilitation, construction, operation
or maintenance of any property, real or personal, that is used or
is suitable for use by an economic enterprise and that will
result in, or will aid, promote or facilitate, development of one
or more of the following activities:
(a) Manufacturing or other industrial production;
(b) Agricultural development or food processing;
(c) Aquacultural development or seafood processing;
(d) Development or improved utilization of natural resources;
(e) Convention facilities and trade centers;
(f) Transportation or freight facilities; and
(g) Other activities that represent new technology or type of
economic enterprise the Oregon Business Development Commission
determines is needed to diversify the economic base of an area
but not including:
(A) Construction of office buildings, including corporate
headquarters; and
(B) Retail businesses, shopping centers or food service
facilities.
(3) 'Collateral' has the meaning given that term in ORS 79.0102
for property subject to a security interest.
(4) 'County' means any county or federally recognized Oregon
Indian tribe.
{ - (5) 'Emerging small business' has the meaning given that
term by ORS 200.005. - }
{ - (6) - } { + (5) + } 'Local development group' means any
public or private corporation that has as one of its primary
purposes, as stated in its articles of incorporation, charter or
bylaws, the promotion of economic development in any part of the
State of Oregon.
{ - (7) - } { + (6) + } 'Municipality' means any city,
municipal corporation or quasi-municipal corporation.
{ - (8) - } { + (7) + } 'Person' means any individual,
association of individuals, joint venture, partnership, limited
liability company or corporation.
SECTION 2. ORS 285B.059, as amended by sections 1 and 5,
chapter 106, Oregon Laws 2010, is amended to read:
285B.059. (1) The Oregon Business Development Commission may
approve a business development project proposed in an application
filed under ORS 285B.050 to 285B.098 if, after investigation, the
commission finds that:
(a) The proposed business development project is feasible and a
reasonable risk from practical and economic standpoints, and that
the loan has reasonable prospect of repayment.
(b) The applicant can provide good and sufficient collateral
for the loan.
(c) Moneys in the Oregon Business Development Fund are or will
be available for the proposed business development project.
(d) There is a need for the proposed business development
project.
(e) The applicant has not received or entered into a contract
or contracts exceeding $1 million with the commission, under
authority of ORS 285B.050 to 285B.098, for the previous 365 days.
(2) { + (a) Except as provided in paragraph (b) of this
subsection, + } the total amount of moneys loaned from the fund
for a business development project may not exceed 50 percent of
the cost of the project.
{ + (b) The total amount of moneys loaned from the fund for a
business development project may exceed 50 percent of the cost of
the project if two or more lenders have denied requests from the
applicant to commit to participate in the financing of the
project and the applicant has no other available financing. + }
(3) { + (a) Except as provided in paragraph (b) of this
subsection, + } { - Except when the applicant is a county or
municipality or when there are payments other than the scheduled
principal and interest payments, - } moneys may not be loaned
from the fund for a business development project unless there
exists a commitment from a commercial or private lender, or a
local development group, to participate in the financing of the
project.
{ + (b) Moneys may be loaned from the fund for a business
development project without a commitment from a commercial or
private lender, or a local development group, to participate in
the financing of the project if:
(A) The applicant is a county or municipality;
(B) There are payments other than the scheduled principal and
interest payments; or
(C) Two or more lenders have denied requests from the applicant
to commit to participate in the financing of the project and the
applicant has no other available financing. + }
(4) To encourage private sector and local development group
participation in the financing of business development projects,
the commission may subordinate the security position of the fund
to that of other lenders.
(5) In each fiscal year of a biennium, { - not less than - }
15 percent of all moneys available for lending from the fund is
reserved for loans to { - certified - } emerging small
business enterprises { + as defined by the Oregon Business
Development Department by rule, + } which are located in or draw
their workforces from within distressed areas as determined by
the Oregon Business Development Department in cooperation with
the Employment Department of this state. { - Any amounts
reserved for loans to such businesses that are not loaned in one
fiscal year shall be added to the amount reserved for loans to
such businesses in the subsequent fiscal year. If the Oregon - }
{ + If the Oregon + } Business Development Department
{ - is - } { + was + } unable to obtain a sufficient number of
approvable applications to meet the requirements of this
subsection { + in the previous fiscal year + }, it may, { + in
the current fiscal year and + } notwithstanding the limitations
imposed by ORS 285B.050 (2)(g)(B), make loans { + , in an amount
that does not exceed the 15 percent reserved for the prior fiscal
year less the amount of loans made to emerging small business
enterprises located in rural and distressed areas during the
previous fiscal year, + } to service and retail businesses
operated by { - emerging - } small business enterprises
{ + that are located in or draw their workforces from within
distressed areas as determined by the Oregon Business Development
Department in cooperation with the Employment Department of this
state. As used in this subsection, 'rural area' and 'distressed
area' have the meaning given those terms in ORS 285A.010 + }.
SECTION 3. ORS 285B.080, as amended by sections 2 and 6,
chapter 106, Oregon Laws 2010, is amended to read:
285B.080. (1) The Oregon Business Development Commission may
appoint the Director of the Oregon Business Development
Department as the commission's representative and agent in all
matters pertaining to ORS 285B.050 to 285B.098.
(2) The director shall ensure that all provisions of ORS
285B.050 to 285B.098 are complied with and that appropriately
trained personnel are employed to properly administer the fiscal
and other portions of ORS 285B.050 to 285B.098.
(3) The director shall have the authority in the director's
sole discretion to approve loans for business development
projects in the amount of { + $250,000 + } { - $100,000 - }
or less and to disburse funds for such projects.
SECTION 4. ORS 285B.746, as amended by sections 3 and 7,
chapter 106, Oregon Laws 2010, is amended to read:
285B.746. (1) The Oregon Business Development Department may
approve a loan requested in an application filed under ORS
285B.743 if, after investigation, it finds that:
(a) The applicant is enrolled in a small business management
program with a small business development center or certified
entity;
(b) The applicant has prepared a business plan for the
business, which has been reviewed by a small business development
center or other entity certified by the department to review
business plans; and
(c) The applicant is not effectively owned or controlled by
another business entity or other person that, either by itself or
when combined with the applicant, is not eligible for a loan
under ORS 285B.740 to 285B.758.
(2) In addition to the requirements for loan approval described
in subsection (1) of this section, in order to obtain a loan
under ORS 285B.740 to 285B.758, an applicant must also satisfy
{ + one + } { - two - } of the following conditions:
{ - (a) The business or proposed business, at the time of
application, must not have been operating for more than 36
months. - }
{ - (b) - } { + (a) + } The business must have annual
revenues of { + $500,000 or less + } { - less than
$175,000 - } in the 12-month period immediately preceding the
date of application.
{ - (c) - } { + (b) + } The business or proposed business
must be owned, in whole or in part, by a person certified as
having a severe disability by the Department of Human Services or
the Commission for the Blind.
SECTION 5. ORS 285B.749, as amended by sections 4 and 8,
chapter 106, Oregon Laws 2010, is amended to read:
285B.749. (1) The Oregon Business Development Department may
approve an entrepreneurial development loan under ORS 285B.740 to
285B.758 if, after investigation, it finds that:
(a) The loan has a reasonable prospect of repayment from cash
flow and collateral and { + is secured by good and sufficient
collateral + } { - that the loan is fully secured by collateral
value - } ; and
(b) The applicant provides equity funds for the project in the
form of cash or property in an amount equal to or greater than 20
percent of the amount of the loan.
(2) The department shall determine the amount of the initial
loan and any subsequent loan to the borrower. The maximum of all
loans to a borrower from the Oregon Entrepreneurial Development
Loan Fund may not exceed $70,000.
(3) Entrepreneurial development loans shall be made for a
period not exceeding five years at a rate of interest that does
not exceed 18 percent per annum.
SECTION 6. { + Section 9, chapter 106, Oregon Laws 2010, is
repealed. + }
SECTION 7. { + If this 2011 Act does not become effective
until after July 1, 2011, the amendments to ORS 285B.059 (2) and
(3), 285B.080, 285B.746 and 285B.749 by sections 2 to 5 of this
2011 Act are operative retroactively to that date and the
operation and effect of ORS 285B.059 (2) and (3), 285B.080,
285B.746 and 285B.749 continue unaffected from July 1, 2011, to
the effective date of this 2011 Act and thereafter. Any otherwise
lawful action taken or otherwise lawful obligation incurred under
the authority of the amendments to ORS 285B.059 (2) and (3),
285B.080, 285B.746 and 285B.749 by sections 2 to 5 of this 2011
Act after July 1, 2011, and before the effective date of this
2011 Act is ratified and approved. + }
SECTION 8. { + The amendments to ORS 285B.050 and 285B.059 (5)
by sections 1 and 2 of this 2011 Act apply to loans to small
business enterprises made on or after the effective date of this
2011 Act. + }
SECTION 9. { + This 2011 Act being necessary for the immediate
preservation of the public peace, health and safety, an emergency
is declared to exist, and this 2011 Act takes effect on its
passage. + }
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