Chapter 509 Oregon Laws 1999

Session Law

AN ACT

SB 1128

Relating to economic development; creating new provisions; amending ORS 238.015, 285A.010, 285A.020, 285A.040, 285A.045, 285A.050, 285A.055, 285A.070, 285A.085, 285A.090, 285A.131, 285A.206, 285A.224, 285A.300, 285A.306, 285A.309, 285A.312, 285A.340, 285A.346, 285A.483, 285A.486, 285A.489, 285B.059, 285B.092, 285B.230, 285B.233, 285B.236, 285B.239, 285B.242, 285B.245, 285B.248, 285B.254, 285B.257, 285B.260, 285B.263, 285B.266, 285B.286, 285B.320, 285B.323, 285B.326, 285B.329, 285B.332, 285B.335, 285B.338, 285B.344, 285B.347, 285B.362, 285B.368, 285B.371, 285B.374, 285B.377, 285B.383, 285B.389, 285B.410, 285B.419, 285B.422, 285B.563 and 541.700; repealing ORS 285A.115, 285A.212, 285A.215, 285A.218, 285A.221, 285A.360, 285A.363, 285A.366, 285A.369, 285A.380, 285A.383, 285A.386, 285A.389, 285A.392, 285A.415, 285A.418, 285A.480, 285A.492, 285A.535, 285A.538, 285A.541, 285A.544, 285A.547, 285A.550, 285A.621, 285A.636, 285A.639, 285A.642, 285A.645, 285A.648, 285A.651, 285A.663, 285A.714, 285A.717, 285A.720, 285A.723, 285A.726, 285A.729, 285B.156, 285B.177, 285B.180, 285B.251, 285B.289, 285B.292, 285B.295 and 285B.298; and declaring an emergency.

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

SECTION 1. ORS 285A.010 is amended to read:

285A.010. As used in ORS chapters 285A and 285B, unless the context requires otherwise:

(1) "Commission" means the Oregon Economic and Community Development Commission.

(2) "Community" means an area or locality in which the body of inhabitants has common economic or employment interests. The term is not limited to a city, county or other political subdivision and need not, but may be, limited by political boundaries.

[(2)] (3) "Department" means the Economic and Community Development Department.

[(3)] (4) "Director" means the Director of the Economic and Community Development Department.

(5) "Distressed area" means a county, city, community or other geographic area that is designated as a distressed area by the department, based on indicators of economic distress or dislocation, including but not limited to unemployment, poverty and job loss.

(6) "International trade" means the export and import of agricultural, mineral and manufactured products, business services and banking.

(7) "Rural area" means an area located entirely outside of the acknowledged Portland Metropolitan Area Regional Urban Growth Boundary and the acknowledged urban growth boundaries of the cities of 30,000 or more in population, including Albany, Bend, Corvallis, Eugene, Springfield, Salem, Keizer or Medford.

(8) "Rural community" means a community located in a rural area.

(9) "Traded sector" means industries in which member firms sell their goods or services into markets for which national or international competition exists.

SECTION 2. ORS 285A.020 is amended to read:

285A.020. (1) The Legislative Assembly finds that:

(a) Oregon's economy continues to experience change and adjustment that greatly affect the well-being of its citizens.

(b) The state has a need for continuing economic development [and expansion to provide jobs for its citizens] to help provide the jobs for its citizens that lead to community vitality and a high quality of life.

[(c) Oregon should seek to increase its per capita income.]

[(d) Providing well-paid jobs is critical to assuring the economic security of Oregon families.]

[(e) Oregon communities continue to rely on a single firm or industry dependent on the wise use and development of the state's natural resources.]

[(f) Oregon's rural areas can benefit substantially from the further development and utilization of their natural resources and public assets.]

(2) The Legislative Assembly further finds that:

(a) Oregon's human resources constitute a major asset in the state's effort to promote economic expansion and improvement.

(b) Oregon's natural resources provide ample opportunities for productive and beneficial economic enterprise.

(c) Oregon's location on the growing economy of the Pacific Rim provides substantial opportunities and challenges in international trade.

(d) Oregon's special heritage, its respect for and cultivation of its environment and its quality of life are a unique and sustaining virtue that will both guide and assist [the state's economic expansion] in maintaining the state's economic health.

(3) It is the purpose of ORS [285A.010 to 285A.100, 285A.203, 285A.215 and 285A.218] chapters 285A and 285B to promote the improvement of Oregon's economy to better provide for the well-being of its citizens[, including the availability of health care services in underserved areas]. To that end, the Economic and Community Development Department shall [give priority to economic development efforts that meet the following criteria] invest resources in accordance with the following principles:

[(a) Develop the human resources of Oregon, by preparing citizens for careers and job opportunities which will provide for their long-term economic security, and aid the economically disadvantaged and distressed citizens of this state including women and minorities to achieve self-sufficiency.]

[(b) Promote development that will provide economic activity in small communities suffering from economic dislocation and in rural areas suffering from chronic underdevelopment.]

[(c) Promote the development of sectors of the economy that sell goods and services in markets for which national and international competition exists.]

[(d) Promote development which will provide family wage jobs for Oregonians.]

[(e) Promote development of sectors of the economy in which Oregon has an economic comparative advantage based on Oregon's labor force, natural resources or geographic location that will secure the long-term viability of the economic sector.]

(a) Structures and processes for making public investments and dealing with local and regional issues must be designed flexibly so that actions can adapt to the constantly changing conditions and demands under which communities and businesses operate.

(b) Partnerships among local, state and federal, public and private players should be used to set direction, develop projects and set priorities.

(c) The expected impact of public investments at all levels should be explicitly identified, in terms of measurable outcomes, whenever possible.

(d) State, federal and community goals, constraints and obligations should be identified at the beginning of the public investment planning process, and the state should work actively with communities and regions to accomplish their mutual objectives.

(4) The Legislative Assembly declares that it is the immediate economic strategy of the state to [focus its development and promotion efforts on Oregon's small businesses and on existing industries. To that end, all state economic development efforts shall, to the maximum extent feasible]:

[(a) Promote entrepreneurship and the growth and development of small businesses which have historically been the most important contributors to the state's economic expansion;]

[(b) Promote the development of new markets, nationally and in foreign nations, for goods and services produced in Oregon;]

[(c) Utilize the resources of the state's public and private educational system including higher education and community colleges; and]

[(d) Encourage additional new investment in Oregon by out-of-state firms that is consistent with the state's long-term economic betterment]

(a) Focus on Oregonians in communities that are rural, economically distressed or lack diverse employment opportunities, including providing assistance in recruiting jobs from outside the community or state and financing necessary infrastructure;

(b) Assist Oregonians who are underemployed or in low income jobs;

(c) Assist start-up companies and companies already doing business in Oregon; and

(d) Help regions that are committed to making strong progress toward an integrated structure and process for strategic planning and project development.

SECTION 3. ORS 285A.040 is amended to read:

285A.040. (1) There is established the Oregon Economic and Community Development Commission consisting of five members appointed by the Governor, subject to confirmation by the Senate in the manner prescribed in ORS 171.562 and 171.565. The Governor shall appoint members of the commission in compliance with all of the following:

(a) Members shall be appointed with due consideration given to representation of the different geographic regions of the state, and at least one member shall be a resident of the area east of the Cascade Range.

(b) Not more than three members shall belong to one political party. Party affiliation shall be determined by the appropriate entry on official election registration cards.

(c) At least one member shall be an individual with substantial experience or training in international trade or an individual who, at the time of appointment, is involved in international trade. Such experience or involvement in international trade may include importing or exporting goods into or from the State of Oregon.

(2) The term of office of each member is four years, but a member serves at the pleasure of the Governor. Before the expiration of the term of a member, the Governor shall appoint a successor whose term begins on July 1 next following. A member is eligible for reappointment. In case of a vacancy for any cause, the Governor shall appoint a person to fill the office for the unexpired term.

(3) A member of the commission is entitled to compensation and expenses as provided by ORS 292.495.

(4) The Governor shall appoint one of the commissioners as presiding officer of the commission. The presiding officer shall have such duties and powers as the commission determines are necessary for the office.

(5) Three members of the commission constitute a quorum for the transaction of business.

(6) The commission shall meet at least quarterly at a time and place determined by the commission. The commission shall also meet at such other times and places as are specified by the call of the presiding officer or of a majority of the commission.

(7) No vacancy shall impair the right of the remaining commissioners to exercise all the powers of the commission. If the commissioners are unable to agree, the Governor shall have the right to vote as a member of the commission.

SECTION 4. ORS 285A.045 is amended to read:

285A.045. (1) As its primary duty, the Oregon Economic and Community Development Commission shall develop and maintain an economic and community development policy for this state that implements the strategy declared in ORS 285A.020 (4) and that includes policies that:

(a) Maintain and create [family wage jobs and] jobs that raise real wage levels of Oregon workers.

(b) Increase the skill levels of the Oregon workforce.

(c) Improve the competitiveness of this state's [key] traded sector industries and achieve benchmarks for those industries established by the Oregon Progress Board.

(d) Invest public moneys in a manner that produces the greatest possible return on investment.

(e) Support statewide and regional strategies to develop and maintain the infrastructure necessary to support and strengthen the economy of this state.

(f) Identify and eliminate barriers that impede the competitiveness of Oregon businesses.

(g) Encourage expansion of existing Oregon businesses and the attraction of new business and industry to [the state] those communities that desire such development.

(2) It is the function of the Oregon Economic and Community Development Commission to establish the policies for economic and community development in this state in a manner consistent with the policies and purposes set forth in this section and ORS 285A.050. In addition, the commission shall perform any other duty vested in it by law.

(3) The commission shall keep complete and accurate records of all the meetings, transactions and business of the commission at the office of the Economic and Community Development Department.

(4) The commission shall set policy for and monitor programs relating to economic development and rural and community development and such other programs related to economic and community development that may be assigned by law to the department.

(5) In carrying out its duties under subsection (1) of this section, the commission shall:

(a) Place priority on those policies that achieve benchmarks established by the Oregon Progress Board; and

(b) Coordinate its activities with the policies of the Education and Workforce Policy Advisor and the policymaking bodies of the Housing and Community Services Department, the Department of Transportation, the Department of Environmental Quality, the Department of Land Conservation and Development and the Employment Department, as well as other appropriate state and federal agencies.

SECTION 5. ORS 285A.050 is amended to read:

285A.050. (1) The Oregon Economic and Community Development Commission shall report biennially 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 [key] 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 [return on investment of public funds] impact of public investments at all levels, in terms of measurable outcomes wherever possible.

(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 [key] 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.

[(2) The commission shall establish a methodology for measuring return on public investments in economic development programs and projects. At a minimum, the methodology shall include estimates of state and local taxes and fees paid directly by the benefiting businesses and taxes paid by employees hired as a result of the public investment.]

[(3) The commission, in accordance with the methodology developed in subsection (2) of this section, shall establish guidelines for return on investment that shall be used by the department in evaluating potential investments of public funds for economic development.]

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

SECTION 6. ORS 285A.055 is amended to read:

285A.055. [(1)] Prior to the approval of bond financing of economic development projects under ORS 285B.320 to 285B.377, the making of a loan under ORS 285A.666 to 285A.732 or the making of any loan or the granting of any moneys from any source except for those allocated under chapter 777, Oregon Laws 1985, the Oregon Economic and Community Development Commission shall:

[(a)] (1) Determine that the action is cost effective, considering both major public expenses and major public benefits;

[(b)] (2) Find that the project will produce goods or services which are sold in markets for which national or international competition exists or, if the project is to be constructed and operated by a nonprofit organization, that the project will not compete with local for-profit businesses;

[(c)] (3) Determine that the action is the best use of the moneys involved, considering other pending applications for those moneys;

[(d)] (4) Find that the project involved is consistent with the Economic and Community Development Department's comprehensive policy and programs;

[(e)] (5) Find that the project involved is consistent with [all] applicable adopted local economic development plans; and

[(f)] (6) Provide for public notice of, and public comment on, the action.

[(2) When establishing standards under subsection (1) of this section, the standards of the commission shall provide that projects be approved in accordance with criteria reflecting the economic benefits to this state. Such criteria shall include, but need not be limited to, the following:]

[(a) Supporting projects that will increase the number of family wage jobs in this state. In adopting any definition of a "family wage job" as used in this paragraph, the commission shall consider local housing costs.]

[(b) Promoting economic recovery in small cities heavily dependent on a single industry.]

[(c) Emphasizing development in underdeveloped rural areas of this state.]

[(d) Utilizing the educational resources available at institutions of higher education.]

[(e) Supporting the development of the state's small businesses, especially businesses owned by women and members of minority groups.]

[(f) Encouraging the use of Oregon's human and natural resources in endeavors that harness Oregon's comparative economic advantages.]

[(g) Limiting assistance to projects that assist businesses selling goods and services in markets for which national or international competition exists.]

[(h) Notifying the Housing and Community Services Department of proposed projects and related workforce increases at the time an application is received by the commission.]

[(i) Considering housing needs based on the projected workforce increase in the developing area.]

SECTION 7. ORS 285A.070 is amended to read:

285A.070. (1) The Economic and Community Development Department [created by ORS 285A.075] is continued, but reorganized as provided in this section [and in the reorganization plan developed under section 5, chapter 736, Oregon Laws 1993].

(2) The Economic and Community Development Department shall [consist of not more than five divisions] be organized by the Director of the Economic and Community Development Department in whatever manner the director considers necessary to conduct the work of the department efficiently and effectively, subject to approval by the Oregon Economic and Community Development Commission.

(3) The department shall be under the supervision of the director [of the Economic Development Department], who shall be appointed by and shall hold office at the pleasure of the Governor. [Each division shall be under the supervision and control of a chief administrative officer appointed by the director.]

(4) The appointment of the director shall be subject to confirmation by the Senate in the manner provided by ORS 171.562 and 171.565.

(5) The director may appoint all subordinate officers and employees of the department and may prescribe their duties, assignments and reassignments and fix their compensation, subject to any applicable provisions of the State Personnel Relations Law. Subject to any other applicable law regulating travel expenses, the officers and employees of the department shall be allowed such reasonable and necessary travel and other expenses as may be incurred in the performance of their duties.

(6) The Oregon Economic and Community Development Commission [shall set review criteria for the director and] shall report [annually] periodically to the Governor on the director's performance [under the criteria] and make appropriate recommendations.

SECTION 8. ORS 285A.085 is amended to read:

285A.085. (1) Subject to policy direction by the Oregon Economic and Community Development Commission, the Director of the Economic and Community Development Department shall:

(a) Be the administrative head of the Economic and Community Development Department;

(b) Administer the laws of the state concerning economic development; and

(c) Intervene, as authorized by the commission, pursuant to the rules of practice and procedure, in the proceedings of state and federal agencies which may substantially affect economic development within Oregon.

[(2) Subject to ORS 285A.070 (2), the director, for purposes of administration and with the approval of the commission, may organize and reorganize the department in whatever manner the director considers necessary to conduct the work of the department properly.]

[(3)] (2) In addition to duties otherwise required by law and subject to the policy direction by the commission, the director shall prescribe rules for the government of the department, the conduct of its employees, the assignment and performance of its business and the custody, use and preservation of its records, papers and property in a manner consistent with applicable law.

[(4)] (3) The director may delegate to any of the employees of the department the exercise or discharge in the director's name of any power, duty or function of whatever character vested in or imposed by law upon the director. The official act of any such person so acting in the director's name and by the authority of the director shall be considered to be an official act of the director.

[(5)] (4) The director shall have authority to require a fidelity bond of any officer or employee of the department who has charge of, handles or has access to any state money or property, and who is not otherwise required by law to give a bond. The amounts of the bond shall be fixed by the director, except as otherwise provided by law, and the sureties shall be approved by the director. The department shall pay the premiums on the bonds.

SECTION 9. 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) Work with local units of government and the private sector to encourage and to assist them as they establish and carry out economic 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

(c) 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.

(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 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 [the state] 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) Make recommendations on rates to the Oregon Board of Maritime Pilots.]

[(14)] (13) Provide managers and other employees for foreign trade offices in those foreign countries in which the department considers a foreign trade office necessary. Managers and other employees shall be in the unclassified service, and the director shall set the salaries of those persons. Foreign trade offices shall:

(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; and

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

SECTION 10. ORS 285A.206 is amended to read:

285A.206. (1) In each calendar year, the Economic and Community Development Department shall prepare, in accordance with generally accepted governmental accounting principles, a financial statement relating to each of the following funds:

(a) The Special Public Works Fund created by ORS 285B.455;

(b) The [Community Development] Title I Bank Fund established by ORS 285A.306;

(d) The Oregon Economic and Community Development Fund created by ORS 285B.374;

(e) The Oregon Port Revolving Fund created by ORS 285A.708; and

(f) Any other fund or account that is used by the department or Oregon Economic and Community Development Commission to make loans or loan guarantees or to provide other financial assistance to private business firms organized for profit.

(2) The financial statements required by this section shall record and summarize all the financial transactions during the reporting period that involved moneys credited to a fund or account and shall describe the financial condition of the fund or an account at the end of the reporting period. The reporting period for financial statements required by this section shall be the fiscal year commencing on July 1 and ending on June 30.

(3) The financial statements required by this section shall be in a form prescribed by the Secretary of State.

(4) Each financial statement required by this section shall describe the financial transactions and condition of a single fund and shall be submitted to the Governor, the President of the Senate and the Speaker of the House of Representatives not later than December 31 in each year.

SECTION 11. 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 [shall] may allocate moneys in the fund for the following purposes:

(A) Industrial 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.

(4) The Economic and Community Development Department may 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) In providing assistance from the Economic Stabilization and Conversion Fund, the department shall give preference to employee-owned enterprises. The employee ownership funds shall be contracted out to fulfill the state's obligation under ORS 285A.535 to 285A.550. In contracting, the Economic Development Department shall give preference to contractors with prior experience in operating programs for technical assistance and public education in the area of employee ownerships.]

[(8)] (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 12. ORS 285A.300 is amended to read:

285A.300. As used in ORS 285A.300 to 285A.312, "fund" means the [Community Development] Title I Bank Fund.

SECTION 13. ORS 285A.306 is amended to read:

285A.306. (1) There is established in the State Treasury, separate and distinct from the General Fund, the [Community Development] Title I Bank Fund. All moneys in the fund are continuously appropriated to provide financing for community development projects.

(2) Moneys in the [Community Development] Title I Bank 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 and other program income shall be credited to the [Community Development] Title I Bank Fund.

(3) The [Community Development] Title I Bank Fund shall consist of:

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

[(b) Recaptured moneys from the Oregon Community Development Grant Program.]

[(c) Interest earnings on moneys loaned to cities and counties under the Oregon Community Development Grant Program for short-term financing of community development projects.]

[(d) Repayment of loans to municipalities made under the Oregon Community Development Grant Program, including interest earnings.]

(b) Repayment of loans made by cities and counties with grants from the Oregon Community Development Block Grant Program, including interest earnings.

(4) The Economic and Community Development Department[, or the agency assigned principal responsibility for administration of the moneys received from the federal Housing and Urban Development Community Development Block Grant Program for Small Cities,] shall be the agency for the State of Oregon for the administration of the fund.

(5) The department shall adopt rules and policies for the administration of the fund.

[(6) The department may establish a program for short-term financing of eligible community development projects using federal Community Development Block Grant moneys allocated to the state but not yet drawn from the federal treasury.]

[(7)] (6) The department may charge program administrative costs to the fund to pay for administrative expenses incurred to the department for processing applications and investigating community development projects.

SECTION 14. ORS 285A.309 is amended to read:

285A.309. All payments, receipts and interest from outstanding indebtedness shall be retained and accumulated in the [Community Development] Title I Bank Fund and used for the purposes specified in ORS 285A.303.

SECTION 15. ORS 285A.312 is amended to read:

285A.312. All federal overlay statutes associated with moneys received from the federal Housing and Urban Development Community Development Block Grant Program for Small Cities shall continue to apply to the use of those moneys in the [Community Development] Title I Bank Fund received from sources described in ORS 285A.306 (3)(c) and (d).

SECTION 16. 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.

[(a)] (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 [employment] economic opportunities and [family wage] jobs for Oregonians.

(c) Oregon's women and minority-owned businesses are underrepresented in the business community.

[(b)] (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.

[(c)] (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.

[(d)] (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) 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) 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 and 285B.156 to 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.

[(a)] (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;

[(b)] (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; [and]

[(c)] (d) To encourage and support the formation of private sector organizations, including trade associations, organizations formed to meet the needs of [key] 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 17. ORS 285A.483 is amended to read:

285A.483. (1) The Legislative Assembly finds that:

(a) The rural communities of Oregon need assistance in assessing their economic opportunities, planning for long-term economic development and participating effectively in state economic development programs;

(b) Strong community leaders are essential to the ability of a rural community to identify economic opportunities and problems, build a consensus on community development issues and coordinate the development and implementation of plans to address those issues;

(c) Rural areas of Oregon, more than the urban areas of this state, suffer from significantly higher levels of unemployment, lower average wages and high levels of worker displacement due to advances in technology and [timber] natural resource supply shortages;

(d) These distressed rural communities in particular need strong, visionary leadership to guide them through the economic changes of the next decade, which may be a period of growing global competition, severe [timber] natural resource shortages and declining employment in rural areas;

(e) Rural areas have limited resources with which to acquire the technical assistance and leadership necessary to adequately respond to economic change; and

(f) Federal and state investment in community and leadership development in rural areas is insufficient.

(2) The Legislative Assembly therefore declares that it is the policy of the State of Oregon to promote economic stability and development in rural areas of this state.

(3) The Legislative Assembly further declares that the rural revitalization and leadership development program established by ORS 285A.480 to 285A.495 is intended to promote such state policy by providing rural communities with technical assistance for the assessment of their economic opportunities and the development of strategic plans for immediate and long-term economic development and by improving the leadership skills of individuals likely to become leaders in rural communities.

SECTION 18. ORS 285A.489 is amended to read:

285A.489. [(1)] The Economic and Community Development Department, in cooperation with private businesses, state universities and other interested parties, [shall establish a private, nonprofit corporation] may contract with organizations to carry out the purposes of ORS 285A.480 to 285A.495.

[(2) The Director of the Economic Development Department shall establish an initial board of directors with no more than 15 members including, but not limited to, a majority of members who are representatives from business and rural Oregon, the Director of the Economic Development Department or the deputy director, the Director of the Oregon State University Extension Service or the associate director and an individual skilled in leadership training. The board shall be chaired by a member from the private sector who is elected by a majority of the board. After the initial members of the board of directors are determined, the board, as part of its responsibilities, shall determine the subsequent membership of the board.]

SECTION 19. ORS 285B.266 is amended to read:

285B.266. (1) There is created a Strategic Reserve 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 Strategic Reserve Fund. The fund is continuously appropriated to the Economic and Community Development Department to be used to implement statewide strategies for economic development.

(2) The fund shall not be used to retire any debt or, except upon approval of the Joint Ways and Means Committee or, if the Legislative Assembly is not in session, the Emergency Board, to pay administrative expenses of the department. Expenses that are project related shall not be considered to be administrative expenses of the department.

(3) The department is directed [in the preparation of statewide strategies under this section, after considering the goals and policies of the Oregon Development Board established under section 2, chapter 908, Oregon Laws 1989, to place particular emphasis on developing cost-effective, long-term policies to assist the creation, expansion and preservation of Oregon's principal traded sector industries, including but not limited to agriculture, forest products, electronics and other diversified manufacturing] to place particular emphasis on investments that assist communities, businesses or industries in cost-effective projects that assist the creation, expansion and preservation of the principal traded sector industries of Oregon and encourage diversification and preservation of regional economies. The fund shall be used to assist economic and community development projects of public entities, industry groups or businesses with significant long-term, regional or statewide economic impacts, to provide interim financing mechanisms to augment existing public or private sector programs or to analyze statewide, long-term economic issues and opportunities.

[(4) The department shall notify the Housing and Community Services Department of any proposed Strategic Reserve Fund project with a related workforce increase at least two weeks before the signing of the contract for state participation in the project.]

SECTION 20. ORS 285B.286 is amended to read:

285B.286. For [key] traded sector industries, the Economic and Community Development Department shall undertake [a program of key] industry development activities which may include, but are not limited to, all of the following:

(1) Focus groups and other meetings and related studies to identify [key] traded sector industry members and issues of common concern within an industry.

(2) State technical and financial support for formation of industry associations, publication of association directories and related efforts to create or expand the activities of industry associations.

(3) Helping establish research consortia.

(4) Joint training and education programs and curricula related to the specific needs of [key] traded sector industries.

(5) Cooperative market development activities.

(6) Analysis of the need, feasibility and cost for establishing product certification and testing facilities and services.

[(7) Providing for methods of electronic communication and information dissemination among firms and groups of firms to facilitate network activity.]

SECTION 21. ORS 285B.389 is amended to read:

285B.389. (1) The Oregon Economic and Community Development Commission shall collect the fees set forth in subsection (2) of this section from an applicant that seeks to have the real and personal property constituting the eligible project declared eligible for the tax exemption provided in ORS 307.123. The fee may be collected even though the project has not been determined to be eligible for the tax exemption.

(2) The fees described in subsection (1) of this section are as follows:

(a) $10,000 upon application to the commission; and

(b) $50,000 when the eligible project is determined by the commission to be eligible for the tax exemption provided in ORS 307.123. The commission shall pay 50 percent of this fee to the Department of Revenue for the purpose of administration of ORS 307.123.

(3) The fees collected under subsection (2) of this section shall be deposited in the Financial Programs Account created by ORS 285A.212.

SECTION 22. 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 financial 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 [family wage] 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 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 [small cities and underdeveloped urban and rural areas] 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. The fund value shall be determined by summing the cash reserves and the outstanding principal amount of loans to municipalities. Any principal amounts of loans forgiven shall be subtracted from the value of the fund. The value of the fund shall include moneys in the fund that are pledged to the repayment of state bonds.

(b) The department shall quarterly certify the value of the fund to the State Treasurer [and to the Legislative Committee on Trade and Economic Development].

(c) If necessary to insure 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) Not more than 100 percent of the total cost of any infrastructure project shall be financed from the Special Public Works Fund.

(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 projects, the department shall cooperate to the maximum extent possible with other state agencies financing infrastructure 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 23. ORS 238.015 is amended to read:

238.015. No person may become a member of the system unless that person is in the service of a public employer and has completed six months' service uninterrupted by more than 30 consecutive working days during the six months' period. Every employee of a participating employer shall become a member of the system at the beginning of the first full pay period of the employee following the six months' period. All public employers participating in the Public Employees Retirement System established by chapter 401, Oregon Laws 1945, as amended, at the time of repeal of that chapter, and all school districts of the state, shall participate in, and their employees shall be members of, the system, except as follows:

(1)(a) An employee who is a member of, or eligible for membership in, a retirement system established by a public employer prior to April 8, 1953, or who is a member of, or eligible to membership in, an association established pursuant to ORS chapter 239, may not become a member of the system established by this chapter until the previously established system or the system of the association is integrated with the system established by this chapter pursuant to the procedure provided by ORS 238.680. As a member of the system established by this chapter an employee shall receive no retirement credit during such time as the employee heretofore excluded or hereafter excludes the employee from the previously established system or from the association, and shall receive only such retirement credit during the time the employee is a member of the previously established system or of the association as the contract of integration provides, except that any teacher who has been continuously employed by a school district of this state from July 1, 1929, to July 1, 1951, in which an association has been established pursuant to ORS chapter 239, and who has not been a member of such association at any time from July 1, 1929, to September 1, 1953, shall receive credit for prior service as provided by ORS 238.225 upon payment prior to December 1, 1953, to the board by such teacher of such contributions as would have been deducted from the salary of the teacher from July 1, 1946, to the date of becoming a member of this system if the teacher had become a member of this system on July 1, 1946, and the school district by which said teacher is employed shall transmit to the board, at such time as the board designates, such sums as the school district would have been required to transmit under the provisions of ORS 238.225 if such teacher had become a member of this system on July 1, 1946, and, upon such payments, such teacher shall be deemed to have been a member of the system established by this chapter for the purposes of this chapter continuously from July 1, 1946.

(b) Notwithstanding paragraph (a) of this subsection, an employee who is a member of, or eligible for membership in, an association established pursuant to ORS chapter 239 shall become a member of the system established by this chapter if the employee has separated, for any reason other than death or disability, from all service entitling the employee to membership in the system of the association, and the employee shall receive retirement credit under this chapter for the period of time the employee was a member of an association established pursuant to ORS chapter 239 upon payment to the Public Employees Retirement Board of all amounts in the individual account of the employee established pursuant to ORS chapter 239. The payment by the employee shall be deposited in the individual account of the employee in the Public Employees Retirement Fund. Upon such payment by the employee, the school board which previously employed the employee shall pay to the retirement board such sums as may be determined by actuarial computation to fund the retirement credit received by the employee. The school board may, with the consent of the board, make payment in three equal annual installments.

(c) Notwithstanding paragraph (a) of this subsection, an employee who is a member of a retirement system established by a public employer prior to April 8, 1953, shall become a member of the system established by this chapter if the employee has separated from all service entitling the employee to membership in the retirement system established prior to April 8, 1953; but the employee shall receive no retirement credit under this chapter for the time the employee is a member of, or eligible for membership in, the retirement system established prior to April 8, 1953. Furthermore, if the employee has been separated for disability from service entitling the employee to membership in a retirement system established prior to April 8, 1953, and is receiving a disability benefit under such retirement system at the time the employee becomes a member of the system established by this chapter, the employee shall not receive any benefit under this chapter for such disability.

(2) Any active member of the Public Employees Retirement System who, through the annexation of a political subdivision employing the member or by change of employment, becomes the employee of another political subdivision which is participating in the Public Employees Retirement System and has also a separate retirement system for its employees, shall remain an active member of the Public Employees Retirement System unless, within 60 days after the effective date of the annexation or change of employment or April 8, 1953, the member shall by written notice to the Public Employees Retirement Board and to the administrative body of the new public employer elect to relinquish membership in the Public Employees Retirement System and become a member of the separate retirement system of the employer, if eligible for membership in that retirement system, and the member shall be so carried by the new employer. Immediately upon such annexation of any political subdivision or such change of employment, the new public employer shall inform such employee in writing of the right of the employee to exercise an election as in this section provided.

(3) A political subdivision (other than a school district) not participating in the retirement system established by chapter 401, Oregon Laws 1945, as amended, which employs one or more employees, each of whose position requires 600 hours of service per year, or an agency created by two or more political subdivisions to provide themselves governmental services, which employs one or more employees, each of whose position requires 600 hours of service per year, may, through its governing body, notify the board in writing, that it elects to include its employees in the system hereby established. Such public employer may request the board to make a study and estimate of the cost of including it and its eligible employees, other than volunteer firefighters, in the system, which the board thereupon shall cause to be made and the cost of which the employer shall bear. Upon completion of the study and estimate the employer may apply for admission to the system, whereupon it shall begin to participate therein and its eligible employees other than volunteer firefighters shall become members of the system. If the employer is an agency created by two or more political subdivisions to provide themselves governmental services and ceases thereafter to transmit to the board current service contributions for any of its eligible employees, the benefits based upon employer current service contributions to which such employees would otherwise be entitled shall be reduced accordingly.

(4) Except as subsection (7) of this section provides otherwise with reference to volunteer firefighters, no employee whose position with one public employer or concurrent positions with two or more public employers normally require less than 600 hours of service per year may become a member of the system.

(5) No inmate of a state institution or an alien on a training or educational visa working for any participating employer, even though the inmate or alien received compensation from a participating employer, shall be eligible to become a member of the system. No person employed by a participating employer and defined by such employer as a student employee is eligible to become a member of the system for such student employment.

(6) A person holding an elective office or an appointive office with a fixed term or an office as head of a department to which the person is appointed by the Governor may become a member of the system by giving the board written notice of desire to do so within 30 days after taking the office or, in the event that the officer is not eligible to become a member of the system at the time of taking the office, within 30 days after becoming so eligible. Membership so established shall not be discontinued during the appointive or elective term of the officer except upon separation of the officer from service.

(7) A public employer employing volunteer firefighters may apply to the board at any time for them to become members of the system. Upon receiving the application the board shall fix a wage at which, for purposes of this chapter only, they shall be considered to be employed and which shall be the basis for computing the amounts of the contributions which they pay into, and of the benefits which they and their beneficiaries receive from, the fund; and if the wage so fixed is satisfactory to the employer, shall include the firefighters in the system.

(8)(a) In the event that an employee enters the service of a public employer which is participating in or later begins to participate in the system and in the event that at the time of entering that service or at the time that the employer begins to participate in the system the employee has commenced to purchase and is continuing to purchase a retirement annuity, if the employer deems the annuity adequate for the purposes of this chapter it may enter into an agreement with the employee and the board pursuant to which the employee may be exempted from contributing to the Public Employees Retirement Fund, and, if no public funds are being used to purchase the annuity or a corresponding pension, the employer, in lieu of the contributions which it otherwise would make to the fund on account of the employee, may make contributions toward the cost of purchasing the annuity. Such employee otherwise shall be subject to the provisions of this chapter, except that neither the employee nor any person claiming under the employee shall receive any payments from the retirement fund as service or disability allowance.

(b) An employee who enters into an agreement under paragraph (a) of this subsection may elect at any time thereafter to start to participate in the system by giving written notice of desire to participate to the board and to the employer. The employee shall receive no retirement credit for the period during which the employee was exempted from contributing to the fund under the agreement, but the employee shall be considered to have completed the six months' service required for membership in the system. When the employee starts to participate in the system the employer shall start to contribute to the fund on the account of the employee in the same manner as the employer contributes on the account of other employees who are active members of the system and the employer shall stop making contributions toward the cost of purchasing the retirement annuity.

(9)(a) All new appointees in the Federal Cooperative Extension Service or in any other service in which participation in the Federal Civil Service retirement program is mandatory, who receive a federal appointment on or after July 1, 1955, may participate in the Public Employees Retirement System only by giving written notice of their election to so participate to the Public Employees Retirement Board within six months after the effective date of their appointment.

(b) All persons employed by the Federal Cooperative Extension Service or by any other service in which participation in the Federal Civil Service retirement program is mandatory, who are under federal appointment as of July 1, 1955, and who are members of the state retirement system, shall continue such membership unless, prior to February 1, 1956, they give written notice to the Public Employees Retirement Board of their desire to cancel their membership.

(c) Any person who is an active member of the Public Employees Retirement System, who, on or after July 1, 1955, is employed by the Federal Cooperative Extension Service or by any other service in which participation in the Federal Civil Service retirement program is mandatory, and who is given a federal appointment, shall continue such membership in the Public Employees Retirement System unless, within six months after the effective date of the appointment, the person gives written notice to the Public Employees Retirement Board of the desire to cancel membership.

(d) A cancellation of membership under paragraph (b) or (c) of this subsection terminates membership in the Public Employees Retirement System and cancels the right to any benefits from, or claims against, that system. Such cancellation prevents the withdrawing member from claiming thereafter any retirement credit for any period of employment before the cancellation. Upon receipt of a notice of cancellation, the Public Employees Retirement Board shall refund to the withdrawing member, regardless of age, the account balance of the employee in the retirement fund.

(10) Managers and other employees of foreign trade offices of the Economic and Community Development Department who live and perform services in foreign countries under the provisions of ORS 285A.090 [(14)] (13) shall not be members of the system. However, any person who is an active member of the system immediately before becoming a manager or employee of a foreign trade office shall continue to be a member of the system during the period of time the person serves as a manager or employee of the foreign trade office.

(11) An employee who is an employee of the Oregon Health Sciences University may not be an active member of the Public Employees Retirement System if that employee is participating in an alternative retirement program established by the university pursuant to ORS 353.250.

SECTION 24. ORS 285A.131 is amended to read:

285A.131. (1) There is established the International Trade Commission consisting of nine members appointed by the Governor. In appointing members of the commission, the Governor shall appoint some members who represent businesses specializing in international trade and some who represent [key] traded sector industries. At least one member of the International Trade Commission appointed by the Governor shall be a member of the Oregon Economic and Community Development Commission.

(2) In addition to the members appointed by the Governor, the President of the Senate and the Speaker of the House of Representatives shall appoint one member each to serve as nonvoting, ex officio members of the International Trade Commission.

(3) The members of the commission who are appointed by the Governor shall serve on the commission at the pleasure of the Governor.

(4) The members of the commission who are appointed by the Governor may receive payment for their actual and necessary travel and other expenses as provided in ORS 285A.060.

(5) The Economic and Community Development Department shall provide staff support for the International Trade Commission.

(6) The commission may appoint work groups and task forces as the commission considers appropriate to assist the commission in carrying out the duties of the commission under this section and ORS 285A.133. Work groups and task forces may include individuals who are not members of the commission.

(7) The Director of the Economic and Community Development Department, with the approval of the Governor, shall appoint an executive director of the International Division of the Economic and Community Development Department from a list of candidates submitted by the International Trade Commission.

SECTION 25. ORS 285A.346 is amended to read:

285A.346. (1) 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:

(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)[(d)](f) relating to fees for business assistance programs for small businesses.

(3) 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) 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 26. ORS 285B.383 is amended to read:

285B.383. (1) If an eligible project directly benefits a [key] traded sector industry, as defined in ORS 285B.280 (3), and if the total cost of the eligible project exceeds $100 million, the State of Oregon, acting through the Oregon Economic and Community Development Commission, may determine that the real and personal property constituting the eligible project is eligible for the tax exemption provided in ORS 307.123, and the State of Oregon, acting through the State Treasurer, may authorize and issue revenue bonds in accordance with ORS 285B.320 to 285B.377 to finance the costs of the eligible project.

(2) Nothing in this section authorizes [the refinancing of existing eligible projects that meet the requirements of this section or authorizes] the Oregon Economic and Community Development Commission to determine that an existing eligible project is eligible for the tax exemption provided in ORS 307.123.

(3) A business firm that will be benefited by an eligible project shall enter into a first-source hiring agreement with a publicly funded job training provider that will remain in effect until the end of the tax exemption period.

(4) If an eligible project is leased or subleased to any person, the lessee shall be required to pay property taxes levied upon or with respect to the leased premises only in accordance with ORS 307.123.

(5) For purposes of determining the assessment and taxation of the eligible project in ORS 307.123 and the calculation of the community services fee in ORS 285B.386 (4)(b), in addition to the requirements set out in ORS 285B.323 [(2)] (3), the invested cost of all real and personal property to be included in the eligible project shall be established by the Oregon Economic and Community Development Commission when it determines that the project is an eligible project.

SECTION 27. ORS 285B.059 is amended to read:

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

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

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

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

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

(e) If the proposed project is to be located in an incorporated city, the governing body of that city has executed a resolution recommending the proposed project.

(f) If the proposed project is to be located outside any incorporated city, the governing body of the county in which the project is to be located has executed a resolution recommending the proposed project.

(g) The Housing and Community Services Department received notification of the proposed project and any related workforce increase at the time the application was received by the commission.

(h) The applicant has not received or entered into a contract or contracts exceeding $500,000 with the commission, under authority of ORS 285B.050 to 285B.098, for the previous 365 days, nor is there an amount equal to 20 percent of the total value of the fund in outstanding loans with the commission at any one time for business development projects located in the same county as the proposed project. However, nothing in this paragraph prevents the commission from making a loan to an emerging small business, as provided in subsection (6) of this section, or making a loan of less than $100,000, as provided in ORS 285B.080.

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

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

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

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

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

(7) In the operation of the Oregon Business Development Fund, the commission and the department shall, to the maximum extent feasible and consistent with constitutional limitations, seek to assure that an amount equal to that specified in subsection (6) of this section be loaned to businesses owned and operated by women and minorities.

SECTION 28. ORS 285B.092 is amended to read:

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

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

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

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

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

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

(C) The amount of the purchase or buyout of superior or prior liens or mortgages on that project does not exceed $500,000.

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

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

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

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

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

(3) Notwithstanding any other law, if at any time there are insufficient funds in the Oregon Entrepreneurial Development Loan Fund established by section 13, chapter 688, Oregon Laws 1991, the Director of the Economic and Community Development Department may direct the transfer of unobligated funds from the Oregon Business Development Fund to the Oregon Entrepreneurial Development Loan Fund. Transfers under this subsection shall be in amounts necessary to meet the reasonably foreseeable demand for participation in the entrepreneurial loan program.

SECTION 29. ORS 285B.320 is amended to read:

285B.320. The Legislative Assembly finds that by use of the powers and procedures described in ORS 285B.320 to 285B.377 for the assembling and financing of lands for industrial, commercial and research and development uses and for the construction and financing of facilities for such uses, financed through the issuance of [revenue] bonds secured solely by the properties, loan payments, [and] rentals or other financing payments thus made available, the state may be able to reduce substantially in various counties the occurrence of economic conditions requiring more expensive remedial action. It is the purpose of ORS 285B.320 to 285B.377 to authorize the exercise of powers granted by ORS 285B.320 to 285B.377 by this state in addition to and not in lieu of any other powers it may possess.

SECTION 30. ORS 285B.323 is amended to read:

285B.323. As used in ORS 285B.320 to 285B.377, unless the context requires otherwise:

(1) "Bond" means any evidence of indebtedness, including but not limited to any bond, note, obligation, loan agreement, financing agreement, contracts for leasing, rental or financing of real or personal property, including contracts for rental, long term leases under an optional contract for purchase, financing agreements with vendors, financial institutions or others or for purchase of any property secured by revenues or from other financing sources as provided in ORS 285B.320 to 285B.377. A bond, as defined in this subsection and issued under ORS 285B.320 to 285B.377, shall be considered a revenue bond for purposes of ORS 286.031.

[(1)] (2) "Economic development project" includes any properties, real or personal, used or useful in connection with a revenue producing enterprise. "Economic development project" shall not include any facility or facilities designed primarily for the generation, transmission, sale or distribution of electrical energy.

[(2)] (3) "Eligible project" means an economic development project found by the Oregon Economic and Community Development Commission to meet standards of the commission adopted under ORS 285A.110. The commission may treat as a single eligible project for bonding purposes any number of economic development projects determined to be eligible projects.

SECTION 31. ORS 285B.326 is amended to read:

285B.326. (1) Upon determining an economic development project an "eligible project," the Oregon Economic and Community Development Commission shall forward the application to the State Treasurer, who shall determine whether to issue the [revenue] bonds.

(2) The commission shall collect the fees set forth in subsection (3) of this section from an applicant that seeks to have an economic development project declared eligible for financing. The fee may be collected even though the project has not been determined to be eligible for financing. Moneys collected under this subsection are continuously appropriated to the commission for the purpose of administration or funding of any program it is authorized to operate. Participation fees received on bonds issued pursuant to ORS 285B.377 may be paid to local development groups for administration expenses related to investigating proposed economic development projects and assisting the commission in processing applications pursuant to ORS 285B.377.

(3) The fees described in subsection (2) of this section are as follows:

(a) $250 for an application of not to exceed $500,000.

(b) $500 for an application of more than $500,000.

(c) A closing fee of not to exceed one-half of one percent of the total bond issue for the project, as determined by the commission.

(d) A one-time participation fee, not to exceed one-half of one percent of the total bond issue or an annual participation fee not to exceed one one-sixteenth of one percent of the outstanding principal of the bond issue as determined by the commission.

(e) For bonds issued under ORS 285B.374 and 285B.377, insurance assessments in amounts and payable at such times as are required by rules adopted pursuant to ORS 285A.110.

SECTION 32. ORS 285B.329 is amended to read:

285B.329. The state, acting through the State Treasurer, shall not undertake to finance any economic development project pursuant to ORS 285B.320 to 285B.377 before the Oregon Economic and Community Development Commission has reviewed the project pursuant to standards adopted under ORS 285A.110.

SECTION 33. ORS 285B.332 is amended to read:

285B.332. (1) The undertaking of any eligible project must be requested by official action of the governing body of the county taken at a regular or duly called special meeting thereof by the affirmative vote of a majority of its members.

(2) The governing body of any Oregon county is encouraged to forward appropriate prospective eligible projects to the Oregon Economic and Community Development Commission for processing pursuant to ORS 285B.326.

(3) For purposes of this section, for projects located on a federally recognized Oregon Indian reservation, the governing body of a county shall be considered to be the governing body of the federally recognized Oregon Indian tribe.

(4) If the governing body is requesting the undertaking of an eligible project under ORS 285B.386, it may impose additional reasonable requirements on the applicant.

SECTION 34. ORS 285B.335 is amended to read:

285B.335. In addition to any other powers granted by law or by charter, in relation to an eligible project, the state, acting through the State Treasurer or a designee thereof may:

(1) Enter into agreements to finance the costs of an eligible project by loaning or otherwise making available the proceeds of bonds authorized by ORS 285B.374 and 285B.377 to any person, firm or public or private corporation or federal or state governmental subdivision or agency under such terms and with such security as the state may approve;

(2) Lease and sublease eligible projects to any person, firm or public or private corporation or federal or state governmental subdivision or agency in such manner that rents to be charged for the use of such projects shall be established, and revised from time to time as necessary, so as to produce income and revenue sufficient to provide for the prompt payment of principal of and interest on all bonds issued under this section when due, and the lease or financing agreement shall also provide that the lessee, borrower or financing party shall be required to pay all expenses of the operation and maintenance of the project including, but without limitation, adequate insurance thereon and insurance against all liability for injury to persons or property arising from the operation thereof, and all taxes and special assessments levied upon or with respect to the leased premises and payable during the term of the lease, during which term ad valorem taxes in the same amount and to the same extent as though the lessee were the owner of all real and personal property comprising the project;

(3) Pledge and assign to the holders of such bonds or a trustee therefor all or any part of the revenues of one or more eligible projects owned or to be acquired by the state, and define and segregate such revenues or provide for the payment thereof to a trustee;

(4) Mortgage or otherwise encumber eligible projects in favor of the holders of such bonds or in favor of any escrow agent, vendor, lender, other financing party or [a] trustee therefor. However, in creating any such mortgages or encumbrances the state can not obligate itself except with respect to the project;

(5) Make all contracts, execute and deliver 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; including a contract entered into prior to the construction, acquisition and installation of the eligible project authorizing the lessee, borrower or other financing party, subject to such terms and conditions as the state shall find necessary or desirable and proper, to provide for the construction, acquisition and installation of the buildings, improvements and equipment to be included in the project by any means available to the lessee, borrower or other financing party, and in the manner determined by the lessee, borrower or other financing party, and without advertisement for bids as may be required for the construction, acquisition or installation of other public facilities;

(6) Enter into and perform such contracts and agreements with political subdivisions and state agencies as the respective governing bodies of the same may consider proper and feasible for or concerning the planning, construction, installation, lease, or other acquisition, and the financing of such facilities, which contracts and agreements may establish a board, commission or such other body as may be deemed proper for the supervision and general management of the facilities of the eligible project; and

(7) Accept from any authorized agency of the state or Federal Government loans or grants for the planning, construction, acquisition, leasing, or other provision of any eligible project, and enter into agreements with such agency respecting such loans or grants.

SECTION 35. ORS 285B.338 is amended to read:

285B.338. In carrying out its duties under ORS 285B.320 to 285B.377, the Oregon Economic and Community Development Commission, acting for and in behalf of the state as its duly authorized agency, may:

(1) Acquire, construct and hold in whole or in part any lands, buildings, easements, water and air rights, improvements to lands and buildings and capital equipment to be located permanently or used exclusively on such lands or in such buildings, which are deemed necessary in connection with an eligible project to be situated within the state, and construct, reconstruct, improve, better and extend such projects, and enter into contracts therefor; and

(2) Sell and convey all properties acquired in connection with eligible projects, including without limitation the sale and conveyance thereof subject to any mortgage and the sale and conveyance thereof under an option granted to the lessee of the eligible project, for such price, and at such time as the state may determine. However, no sale or conveyance of such properties shall ever be made in such manner as to impair the rights of interests of the holder, or holders, or any bonds issued under the authority of ORS 285B.320 to 285B.377.

SECTION 36. ORS 285B.344 is amended to read:

285B.344. (1) If the State Treasurer determines that [revenue] bonds should be issued:

(a) The State Treasurer may authorize and issue in the name of the State of Oregon [revenue] bonds secured by revenues from eligible economic development projects or from other financing sources, and where applicable, secured as provided in ORS 285B.374 and 285B.377, to finance or refinance in whole or part the cost of acquisition, construction, reconstruction, improvement or extension of projects. The bonds shall be identified by project and issued in the manner prescribed by ORS 286.010, 286.020 and 286.105 to 286.135, and refunding bonds may be issued to refinance such [revenue] bonds.

(b) The State Treasurer shall designate the underwriter, trustee, [and] bond counsel, vendor, lender or other financing party, if any, and enter into appropriate agreements with each to carry out the provisions of ORS 285B.320 to 285B.377.

(2) Any escrow agent, bond registrar, paying agent or trustee, if any, designated by the State Treasurer to carry out all or part of the powers specified in ORS 285B.335 must agree to furnish financial statements and audit reports for each bond issue.

SECTION 37. ORS 285B.347 is amended to read:

285B.347. In determining whether to issue [revenue] bonds under ORS 285B.320 to 285B.377, the State Treasurer shall consider:

(1) The [bond] market for the types of bonds proposed for issuance.

(2) The terms and conditions of the proposed issue.

(3) Such other relevant factors as the State Treasurer considers necessary to protect the financial integrity of the state.

SECTION 38. ORS 285B.362 is amended to read:

285B.362. The official action authorizing the issuance of bonds under ORS 285B.320 to 285B.377 to finance or refinance in whole or in part, the acquisition, construction, installation, reconstruction, improvement, betterment or extension of any eligible project may contain covenants, notwithstanding that such covenants may limit the exercises of powers conferred by ORS 285B.320 to 285B.377 in the following respects and in such other respects as the state, acting through the State Treasurer, or the designee of the treasurer may decide:

(1) The rents to be charged for the use of properties acquired, constructed, installed, reconstructed, improved, bettered or extended under the authority of ORS 285B.320 to 285B.377;

(2) The use and disposition of the revenues of such projects;

(3) The creation and maintenance of sinking funds and the regulation, use and disposition thereof;

(4) The creation and maintenance of funds to provide for maintaining the eligible project and replacement of properties depreciated, damaged, destroyed or condemned;

(5) The purpose or purposes to which the proceeds of sale of bonds may be applied and the use and disposition of such proceeds;

(6) The nature of mortgages or other encumbrances on the eligible project made in favor of the holder or holders of such bonds or in favor of any escrow agent, vendor, lender, other financing party or [a] trustee therefor;

(7) The events of default and the rights and liabilities arising thereon and the terms and conditions upon which the holders of any bonds may bring any suit or action on such bonds or on any coupons appurtenant thereto;

(8) The issuance of other or additional bonds or instruments payable from or constituting a charge against the revenue of the eligible project;

(9) The insurance to be carried upon the eligible project and the use and disposition of insurance moneys;

(10) The keeping of books of account and the inspection and audit thereof;

(11) The terms and conditions upon which any or all of the bonds shall become or may be declared due before maturity and the terms and conditions upon which such declaration and its consequences may be waived;

(12) The rights, liabilities, powers and duties arising upon the breach by the municipality or redevelopment agency of any covenants, conditions or obligations;

(13) The appointing of and vesting in a trustee or trustees of the right to enforce any covenants made to secure or to pay the bonds; the powers and duties of such trustee or trustees, and the limitation of their liabilities;

(14) The terms and conditions upon which the holder or holders of the bonds, or the holders of any proportion or percentage of them, may enforce any covenants made under ORS 285B.320 to 285B.377;

(15) A procedure by which the terms of any official action authorizing bonds or of any other contract with bondholders, including but not limited to an indenture of trust or similar instrument, may be amended or abrogated, and the amount of bonds the holders of which may consent thereto, and the manner in which such consent may be given; and

(16) The subordination of the security of any bonds issued under ORS 285B.320 to 285B.377 and the payment of principal and interest thereof, to the extent deemed feasible and desirable by the state, to other bonds or obligations of the state issued to finance the eligible project or that may be outstanding when the bonds thus subordinated are issued and delivered.

SECTION 39. ORS 285B.368 is amended to read:

285B.368. Subject to any contractual limitation binding upon the holders of any issue of [revenue] bonds, or any escrow agent, vendor, lender, other financing party or [a] trustee therefor, including but not limited to the restriction of the exercise of any remedy to a specified proportion or percentage of such holders, any holder of bonds, or any trustee therefor, for the equal benefit and protection of all bondholders similarly situated, may:

(1) By action or proceeding for legal or equitable remedies, enforce their rights against the state and any of its officers, agents and employees, and may require and compel the state or any such officers, agents or employees to perform and carry out its and their duties and obligations under ORS 285B.320 to 285B.377 and its and their covenants and agreements with bondholders;

(2) By action require the state to account as if it was the trustee of an express trust;

(3) By action enjoin any acts or things which may be unlawful or in violation of the right of the bondholders;

(4) Bring action upon the bonds;

(5) Foreclose any mortgage or lien given under the authority of ORS 285B.320 to 285B.377 and cause the property standing as security to be sold under any proceedings permitted by law or equity; and

(6) Exercise any right or remedy conferred by ORS 285B.320 to 285B.377 without exhausting and without regard to any other right or remedy conferred by ORS 285B.320 to 285B.377 or any other law of this state, none of which rights and remedies is intended to be exclusive of any other, and each is cumulative and in addition to every other right and remedy.

SECTION 40. ORS 285B.371 is amended to read:

285B.371. The state, acting through the State Treasurer and the Oregon Economic and Community Development Commission, or either of them, may loan the proceeds of the bonds authorized by ORS 285B.320 to 285B.377 for eligible projects without the necessity of the state having any ownership or leasehold interest in the eligible projects. Loans made pursuant to this section shall be secured, if at all, to the extent deemed necessary or desirable by the State Treasurer and the Oregon Economic and Community Development Commission.

SECTION 41. ORS 285B.374 is amended to read:

285B.374. (1) There is created within the State Treasury a revolving trust fund known as the Oregon Economic and Community Development Fund, separate and distinct from the General Fund. Interest earned by the fund shall be credited to the fund. Moneys in this fund shall be used in accordance with agreements made by the state, acting through the State Treasurer or the State Treasurer's designee, for the benefit of the holders of bonds issued under ORS 285B.377, but only to pay:

(a) Principal of, interest and redemption premium, if any, on bonds issued under ORS 285B.377;

(b) Insurance premiums for bonds issued under ORS 285B.377; and

(2) The following moneys shall be credited to the Oregon Economic and Community Development Fund:

(a) Reserve funds established for bonds issued under ORS 285B.377.

(b) Such moneys as may be appropriated to the fund by the Legislative Assembly.

(c) Payments made in respect of eligible projects under loan agreements, financing agreements, notes, obligations, indentures, leases or subleases [which] that are dedicated to payments of bond principal, interest and redemption premium, if any.

(d) Earnings from investment of moneys in the fund.

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

(f) Any other moneys required to be placed in the fund pursuant to any agreement authorized by ORS 271.510, 271.520, 285B.092, 285B.320 to 285B.326, 285B.335, 285B.341, 285B.344, 285B.350, 285B.365, 285B.371 to 285B.377 and 777.250.

(3) There is created a trust account within the Oregon Economic and Community Development Fund to be known as the Economic Development Insurance Account. Fees authorized under ORS 285B.326 (3)(e) and other moneys required to be placed in the account pursuant to any agreement authorized by ORS 271.510, 271.520, 285B.092, 285B.320 to 285B.326, 285B.335, 285B.341, 285B.344, 285B.350, 285B.365, 285B.371 to 285B.377 and 777.250 and such other assets as may be required pursuant to ORS 285B.377 (4) and earnings in the account shall be credited to the Economic Development Insurance Account. Fees authorized under ORS 285B.326 (3)(d) shall be credited to the Economic Development Insurance Account, unless otherwise required as repayment for transfers provided for in subsection (4)(b) of this section. Moneys in the Economic Development Insurance Account shall be used only to replenish reserves established in the Oregon Economic and Community Development Fund or to pay principal and interest due on bonds authorized under ORS 285B.377 and to pay insurance premiums for such bonds, in accordance with rules adopted by the state, acting through the State Treasurer or the State Treasurer's designee.

(4) If, at any time, there are insufficient moneys in the Oregon Economic and Community Development Fund available for timely payment of the bonds authorized by ORS 285B.377, then the conditions precedent to a transfer of moneys under ORS 293.210 from the Oregon Business Development Fund to the Oregon Economic and Community Development Fund shall be deemed to be met for:

(a) A transfer of any liquid assets in the Oregon Business Development Fund which are not then required to meet obligations against that fund; and

(b) A maximum transfer of $3 million from any other state funds having excess money, but only under terms for repayment which are approved by the State Treasurer.

SECTION 42. ORS 285B.377 is amended to read:

285B.377. (1) In addition to bonds authorized by ORS 285B.320 to 285B.377, the state may issue bonds to finance eligible projects which are secured in part by the assets of the Oregon Economic and Community Development Fund, as provided in this section.

(2) The aggregate principal amount of [revenue] bonds issued pursuant to this section which are outstanding at any time shall not exceed $20 million.

(3) Bonds issued pursuant to this section shall be secured in the manner provided in rules adopted by the Oregon Economic and Community Development Commission and approved by the State Treasurer.

(4) The commission may require participants to agree to such arrangements as it and the State Treasurer deem necessary to secure the payment of the principal of, and interest on, the bonds, and redemption premium, if any. Such arrangements may include, but are not limited to, establishment of a debt service reserve, creation of a self-insurance program, the purchase of insurance or other similar devises ensuring the payment of the principal of, and interest on, the bonds issued pursuant to this section.

(5) Within 30 days following the closing of each fiscal quarter, the commission shall report on its operations to the Governor, State Treasurer and the Legislative Assembly. The report shall include a summary of the activities of the commission relating to bonds issued under this section.

(6) Notwithstanding the provisions of ORS 285B.365, the state may pledge to the payment of bonds authorized by this section any funds or revenues specifically set forth in this section, as well as any other funds or revenues which may be used for such purposes under any other provision of state law.

(7) Except to the extent they are inconsistent with the provisions of this section or the rules adopted under ORS 271.510, 271.520, 285B.092, 285B.320 to 285B.326, 285B.335, 285B.341, 285B.344, 285B.350, 285B.365, 285B.371 to 285B.377 and 777.250, the provisions of ORS 285B.320 to 285B.377 apply to the bonds issued under ORS 271.510, 271.520, 285B.092, 285B.320 to 285B.326, 285B.335, 285B.341, 285B.344, 285B.350, 285B.365, 285B.371 to 285B.377 and 777.250 and the loans made pursuant to this section.

SECTION 43. ORS 285B.410 is amended to read:

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

(1) "Municipality" means a city, a county, a port incorporated under ORS 777.010 and 777.050, the Port of Portland created by ORS 778.010, a metropolitan service district organized under ORS chapter 268, a domestic water supply district organized under ORS chapter 264, a water authority or sanitary authority organized under ORS 450.600 to 450.989, a water improvement district organized under ORS chapter 552, a water control district organized under ORS chapter 553, a sanitary district organized under ORS 450.005 to 450.245, a county service district organized under ORS chapter 451 or a tribal council of an Indian tribe in this state.

(2) "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 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 evaluation of 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 evaluation" 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 Health Division of the Department of Human Resources 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. [As used in this paragraph,] "Community facilities" includes facilities that [provide educational, commercial, recreational, cultural, social or similar services to the public, and that] are owned by a municipality and are operated by either the municipality or a person under a management contract or operating agreement with the municipality.

(3) "Public transportation" includes public depots, public parking, public docks, public wharves, railroads and airport facilities.

(4) "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

(5) "Sewage treatment works" includes all facilities necessary for collecting, pumping, treating and disposing of sanitary or storm sewage.

(6) "Solid waste disposal site" has the meaning given to the term "disposal site" by ORS 459.005.

(7) "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.

(8) "Urban infrastructure projects" includes all those 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.

(9) "Nonurban infrastructure projects" includes all those projects which do not meet the definition of urban infrastructure projects.

SECTION 44. ORS 285B.422 is amended to read:

285B.422. (1) The Economic and Community Development Department may provide financial assistance to municipalities for infrastructure projects that are community facilities projects as described in ORS 285B.410 (2)(d).

(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;

(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) Notwithstanding any other provision of ORS 285B.410 to 285B.479, community facilities projects shall be eligible only for loans made with moneys derived from the sale of revenue bonds issued under ORS 285B.467 or for loans made from the Special Public Works Fund. No grants shall be made from the Special Public Works Fund for the costs of a community facilities project. 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 community facilities.

(4) ORS 285B.413 (1) and (2), [285B.416,] 285B.419 (1), 285B.434 (2), (4)[,] and (5) [and (8), 285B.440, 285B.452, 285B.455 (5)], 285B.464 and 285B.467 (2) and (8) do not apply to a municipality applying for financial assistance for a community facilities project.

SECTION 45. 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.

(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.

[(e) The amount of grants made under ORS 285B.560 to 285B.599 shall not exceed 50 percent of the moneys allocated to the fund from proceeds of the Oregon State Lottery.]

(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 Health Division of the Department of Human Resources. 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. The fund value shall be determined by adding the cash reserves and the outstanding principal amount of loans to municipalities. Any amount of loan principal that is forgiven shall be subtracted from the value of the fund. The value of the fund shall include moneys in the fund that are pledged to the repayment of state bonds.

(b) The department shall certify to the State Treasurer in each quarter the value of the fund.

(c) 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.

[(8)] (9)(a) The department may charge administrative costs to the fund, but not to moneys segregated in the account created by subsection [(10)] (11) of this section, to pay for administrative expenses incurred by the department for processing applications, investigating water projects, monitoring recipients of financing for water projects and servicing and collecting outstanding financial awards made for water projects.

(b) To the extent permitted by federal law, administrative expenses of the department as limited in paragraph (a) of this subsection that are paid from the fund shall not exceed four percent of the moneys allocated to the fund in any biennium. Administrative expenses of the department as limited in paragraph (a) of this subsection may be paid from bond proceeds.

[(9)] (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.

[(10)] (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 [(9)] (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 46. ORS 541.700 is amended to read:

541.700. As used in ORS 541.700 to 541.855, unless the context requires otherwise:

(1) "Commission" means the Water Resources Commission appointed under ORS 536.022.

(2) "Construction" means the construction, or improvement or rehabilitation, in whole or in part, of a water development project, including planning and engineering work directly related to such construction or improvement or rehabilitation, or any combination of such construction or improvement or rehabilitation.

(3) "Director" means the Water Resources Director appointed pursuant to ORS 536.032.

(4) "Federal water development project" means a project that meets the requirements of the Watershed Protection and Flood Prevention Act (68 Stat. 666), as amended, or the Small Reclamation Projects Act of 1956 (70 Stat. 1044), as amended.

(5)(a) "Secondary use" means:

(A) Any water-related recreational use.

(B) Any wildlife or natural resource conservation use.

(D) Water quality enhancement directly related to the development of a new water development project.

(E) Any flood control use.

(F) Any power generation use.

(G) Any water supply system utilized for the purpose of agricultural temperature control.

(H) Any water supply system utilized for the maintenance of livestock.

(I) Any water supply system utilized as a domestic water system for the benefit of an individual residence related to the operation of the water development project.

(b) "Secondary use" does not include any use that is incompatible with a water development project.

(6) "Water development project" means:

(a) An undertaking, in whole or in part, in this state for the purpose of irrigation, including dams, storage reservoirs, wells or well systems, pumping plants, pipelines, canals, ditches, revetments and any other structure, facility and property necessary or convenient for supplying lands with water for irrigation purposes.

(b) An undertaking, in whole or in part, in this state for the purpose of drainage, including ditching, tiling, piping, channel improvement, pumping plants or other agronomically approved methods of land drainage that will increase soil versatility and productivity.

(c) An undertaking, in whole or in part, in this state for the purpose of providing water for municipal use, which may include safe drinking water for communities with population less than 30,000, including dams, storage reservoirs, wells or well systems, pumping plants, treatment facilities, pipelines, canals, ditches, revetments and all other structures and facilities necessary or convenient for supplying water. An undertaking may provide water to two or more communities with a combined population of more than 30,000. An undertaking may be part of a project that provides water to a community with a population of more than 30,000, but loans of moneys from the Water Development Fund, including moneys in ORS 285B.563 [(10)] (11) may be made only to communities served by the project that have a population of less than 30,000.

(d) An undertaking, in whole or in part, in this state for the purpose of fish protection, including fish screening or by-pass devices, fishways and all other structures and facilities necessary or convenient for providing fish protection.

(e) An undertaking, in whole or in part, in this state for the purpose of watershed enhancement including methods and materials to restore, maintain and enhance the biological, chemical and physical integrity of the riparian zones and associated uplands of the state's rivers, lakes and estuaries systems and recommended by the Governor's Watershed Enhancement Board established under ORS 541.360.

(f) Secondary uses in conjunction with projects described in paragraphs (a) to (e) of this subsection.

(7) "Water developer" means:

(a) Any individual resident of this state;

(b) Any partnership for profit subject to the provisions of ORS chapter 67, 68 or 70, whose principal income is from farming in Oregon;

(c) Any corporation for profit subject to the provisions of ORS chapter 60, whose principal income is from farming in Oregon;

(d) Any nonprofit corporation subject to the provisions of ORS chapter 65, whose principal income is from farming in Oregon;

(e) Any cooperative subject to the provisions of ORS chapter 62, whose principal income is from farming in Oregon;

(f) Any irrigation district organized under or subject to ORS chapter 545;

(g) Any water improvement district organized under ORS chapter 552;

(h) Any water control district organized under ORS chapter 553;

(i) Any irrigation or drainage corporation organized under or subject to ORS chapter 554;

(j) Any drainage district organized under ORS chapter 547 or subject to all or part of ORS chapter 545;

(k) Any corporation, cooperative, company or other association formed prior to 1917 for the purpose of distributing water for irrigation purposes;

(L) Any port district organized under ORS 777.005 to 777.725, 777.915 to 777.953 and 777.990;

(m) Any city or county;

(n) Any organization formed for the purpose of distributing water for community water supply; or

(o) Any local soil and water conservation district organized under ORS 568.210 to 568.808 and 568.900 to 568.933.

SECTION 47. ORS 285B.230 is amended to read:

285B.230. As used in ORS 285B.230 to 285B.251 and 285B.269, unless the context requires otherwise:

[(1) "Key industry" has the meaning given that term in ORS 285B.280.]

[(2)] (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.

(3) "Regional [strategy] investment plan" is a [six-year] long-term economic and community development plan, updated each biennium, [to build or enlarge key industries that are recommended by the region and its citizens. A regional strategy shall consider the needs of industry, the region's workforce and the economic and community development priorities of the region, including rural communities] 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;

(c) Ensuring that economic strategies reinforce Oregon's long-term prosperity and livability; and

(d) Coordinating efforts of economic and community development, education, 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 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 48. ORS 285B.233 is amended to read:

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

(2) The Legislative Assembly declares that the purpose of ORS 285B.230 to 285B.251 and 285B.269 is:

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

(b) To [encourage the coordination of regional strategies with the statewide key industries program] 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;

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

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

SECTION 49. ORS 285B.236 is amended to read:

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

(2) The [standards] guidelines shall provide that the [strategies] regional investment plans are approved in accordance with criteria reflecting the economic and community benefits to the state. Each [strategy] regional investment plan must at a minimum set forth in measurable terms the extent to which the [strategy will retain, increase or lead to an increase in the number of family wage jobs in this state] plan 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. [However, the boundaries of a region established by the department shall not be changed for the duration of the regional strategy developed for the region under ORS 285B.242 or prior to July 1, 1999] 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 [economy and to select its strategy accordingly] economic and community development needs.

[(5) The department shall notify the Housing and Community Services Department of any proposed regional strategy with a related workforce increase at the time the department receives the region's completed regional strategy proposal under ORS 285B.239.]

[(6) All regions of this state shall be eligible to participate in the program operated under ORS 285B.230 to 285B.251 and 285B.269.]

SECTION 50. ORS 285B.239 is amended to read:

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

(1) An identification of [the key industries that the region is seeking to stimulate with its regional strategy] 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 [strategy] regional investment plan;

(3) An analysis of barriers to [development] implementation of the [selected key industries in the region] regional investment plan and an identification of the means to overcome those barriers;

(4) A long-term [action] plan [extending over a period of 6 to 10 years] to implement the regional [strategy] investment plan, including necessary actions by:

(a) Local governments;

(b) The private sector;

(d) Federal Government;

(5) A two-year [action] implementation plan with a prioritized list of projects and activities to be undertaken or funded by the state from lottery proceeds and other sources;

(6) A plan for involvement of disadvantaged and minority groups in the [regional strategies and an identification of job training and employment practices to benefit the economically disadvantaged including but not limited to, affirmative action goals] 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 [strategy document] regional investment plan, for measuring and monitoring [strategy] regional investment plan performance. [As a minimum requirement,] The evaluation plan shall include [a method and time schedule] regional benchmarks for monitoring achievement of the [long-term goals and objectives and the two-year action plan of the region. The plan shall also include criteria for measuring long-term and short-term economic effects] regional investment plans and priorities. When regional benchmarks are established, interim indicators of performance shall be determined after negotiation between the regional board and the Oregon Economic and Community Development Commission. The regional board shall periodically submit performance reports to the county governing bodies in the region, the Oregon Economic and Community Development Commission, the Governor and the Legislative Assembly; and

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

SECTION 51. 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 [strategy] investment plan as provided in ORS 285B.239. The governing body of a county shall designate a regional [strategy] board to develop the [strategy recommendation] regional investment plan. The regional [strategy] board shall consist of individuals [selected from the general public. A majority of the members of the regional strategy board shall be individuals who primarily represent the private economic sector] who represent various local interests including cities, counties, ports, special districts and Indian tribes and significant representation from the private economic sector. The regional [strategy] board shall include members who are representatives of rural interests, including local government.

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

(3) The regional [strategy] 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 [strategy] investment plan described in ORS 285B.239.

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

(5) [Regions shall select a strategy and submit recommendations for the strategy] A region shall submit the regional investment plan 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 [strategy requests] regional investment plans and [assure] ensure compliance with the requirements of ORS 285B.230 to 285B.251 and 285B.269. The Oregon Economic and Community Development Commission shall make recommendations on approval of the [strategy] plan to the Governor for final approval or shall return the [strategy] plan to the regional [strategy] board for further modification.

(6) [Regions that fail to submit regional strategies to the department within 11 months after the beginning of the biennium and do not receive final approval of those strategies within 15 months after the beginning of the biennium may not continue to participate in the regional strategies program established by ORS 285B.230 to 285B.251 and 285B.269 or receive moneys from the Regional Strategies Fund for the program for that biennium. The department shall reallocate any moneys designated for regions that fail to meet the deadlines to regions remaining in the regional strategies program] 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 [strategy] investment plan is developed by a regional [strategy] board, adopted by the governing bodies of the counties and approved by the Governor, the regional [strategy] board, in each biennium, shall [refine] update the [strategy] plan and recommend a two-year [action] implementation plan [to implement the strategy during that biennium]. The [action] implementation plan 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) [A regional strategy shall not be approved by the Oregon Economic Development Commission or by the Governor unless those portions of the strategy relating to key industries are submitted to a statewide organization representing the affected key industries for its review and comment. For the purposes of this subsection, the Economic Development Department shall determine which statewide organizations represent the affected key industries. If the department determines that no statewide organization exists, the provisions of this subsection shall not apply to the relevant portions of a regional strategy] The Governor may delegate responsibility for review and approval of a regional investment plan to a regional partnership.

SECTION 52. ORS 285B.245 is amended to read:

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

(2) The Economic and Community Development Department shall coordinate adopted regional [strategies] investment plans with existing state and local economic development efforts to support a state strategy for economic development. Regions using regional [strategies] 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 [insure] ensure coordination among statewide marketing efforts and regional tourism and industrial marketing projects funded through the regional [strategies] investment program established under ORS 285B.230 to 285B.251 and 285B.269.

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

SECTION 53. ORS 285B.248 is amended to read:

285B.248. In carrying out the provisions of ORS 285B.230 to 285B.251 and 285B.269, the Economic and Community Development Department shall work to [assure] ensure that all counties are included in a region with an adopted [strategy] regional investment plan and that each regional [strategy] investment plan is approved for implementation.

SECTION 54. 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 [strategy] 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 55. ORS 285B.257 is amended to read:

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

(2) Each regional [strategy] board shall update the regional [economic development strategy] investment plan 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 [approved] 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 [strategy] 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 [strategy] 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 [strategy] 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 [strategy] board. The report 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 56. ORS 285B.260 is amended to read:

285B.260. (1) There is created a Regional [Strategies] 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 [Strategies] 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 [Strategies] Investment Fund to pay for the administrative expenses of operating the regional [strategies] investment program under ORS 285B.230 to 285B.251 and 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 [strategy] investment plan.

SECTION 57. 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) Not less than 75 percent of the moneys in the Regional Strategies Fund as regional guideline funds for:]

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

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

(c) Personnel necessary to administer the plans and projects.

[(b)] (2) [not more than 25 percent of the moneys in the Regional Strategies Fund] 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 [selected by the Governor] that implement the approved regional [strategies] investment plans of two or more regions with common economic and community development priorities. Funding for multiregion projects under this [paragraph] subsection shall be awarded, at the discretion of the [Governor] commission, according to the quality of the defined projects. [Multiregion projects that receive funding under this paragraph must support the development of the key industries included in the regional strategies for the regions.]

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

[(3)] (4) In each biennium, a regional [strategy] board may dedicate a portion of regional [guideline] 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 [strategy] investment plan and that support the [development of the key industries] regional priorities included in the regional [strategy] investment plan. The terms and conditions of grants or loans to be made under this subsection must be contained in the regional [strategy] investment plan at the time it is submitted for state review.

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

[(5)] (6) In each biennium, each regional [strategy] 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 in achieving the regional [strategy goals] economic and community development priorities described in ORS 285B.236 (2). Future grants to a regional [strategy] board [shall] may be based on the performance of the board.

SECTION 58. ORS 285A.486 is amended to read:

285A.486. (1) Rural communities participating in the rural revitalization program established by ORS 285A.480 to 285A.495 shall be provided with technical assistance to:

(a) Assess their economic strengths, weaknesses, opportunities and threats;

(b) Develop short term and long term strategic plans based on the assessment;

(c) Assist the communities in developing organizational structures and other activities needed to implement and sustain their strategic plans; and

(d) Resolve problems that may arise in communities as they work to implement their strategic development plans.

(2) The program of leadership training carried on under ORS 285A.480 to 285A.495 shall develop the skills of individuals enrolled in the program by:

(a) Exposing program participants to a broad range of regional, national and international issues affecting rural areas.

(b) Teaching participants about effective management techniques, group problem solving methods and consensus building processes.

(d) Educating participants about the functions of local, state and national governments and the state legislative process.

(e) Teaching participants about the elements of effective leadership.

(f) Providing participants with opportunities to apply leadership skills to community development work.

(3) The Economic and Community Development Department shall insure that the community development and leadership training efforts carried out under the rural revitalization program are coordinated with existing state and local community development and leadership training programs in a manner that contributes to the quality and effectiveness of the programs established by ORS 285A.480 to 285A.495, maximizes the use of available resources and expands development and training opportunities for communities and rural residents. The department shall coordinate programs under ORS 285A.480 to 285A.495 with other programs including, but not limited to, federal programs, the regional [strategies] investment program established under ORS 285B.230 to 285B.269, the special public works program established under ORS 285B.464 and 285B.410 to 285B.479, state workforce and job training programs, programs offered by the Oregon State University Extension Service and leadership training programs offered by local chambers of commerce.

SECTION 59. The amendments to ORS 285B.242, 285B.260 and 285B.263 by sections 51, 56 and 57 of this 1999 Act change the name of the Regional Strategies Fund to the Regional Investment Fund. For purposes of the laws of this state and the rules of state agencies, the Regional Investment Fund is a continuation of the Regional Strategies Fund and not a new fund.

SECTION 60. (1) The amendments to ORS 285A.040 by section 3 of this 1999 Act are intended to change the name of the Oregon Economic Development Commission to the Oregon Economic and Community Development Commission.

(2) The amendments to ORS 285A.070 by section 7 of this 1999 Act are intended to change the name of the Economic Development Department to the Economic and Community Development Department.

(3) The amendments to ORS 285A.085 by section 8 of this 1999 Act are intended to change the name of the Director of the Economic Development Department to the Director of the Economic and Community Development Department.

(4) For the purpose of harmonizing and clarifying statute sections published in Oregon Revised Statutes, the Legislative Counsel may substitute for words designating the Oregon Economic Development Commission, the Economic Development Department and the Director of the Economic Development Department, wherever they occur in Oregon Revised Statutes, words designating the Oregon Economic and Community Development Commission, the Economic and Community Development Department and the Director of the Economic and Community Development Department respectively.

SECTION 61. ORS 285A.115, 285A.212, 285A.215, 285A.218, 285A.221, 285A.360, 285A.363, 285A.366, 285A.369, 285A.380, 285A.383, 285A.386, 285A.389, 285A.392, 285A.415, 285A.418, 285A.480, 285A.492, 285A.535, 285A.538, 285A.541, 285A.544, 285A.547, 285A.550, 285A.621, 285A.636, 285A.639, 285A.642, 285A.645, 285A.648, 285A.651, 285A.663, 285A.714, 285A.717, 285A.720, 285A.723, 285A.726, 285A.729, 285B.156, 285B.177, 285B.180, 285B.251, 285B.289, 285B.292, 285B.295 and 285B.298 are repealed.

SECTION 62. This 1999 Act being necessary for the immediate preservation of the public peace, health and safety, an emergency is declared to exist, and this 1999 Act takes effect on July 1, 1999.

Approved by the Governor July 6, 1999

Filed in the office of Secretary of State July 6, 1999

Effective date July 6, 1999

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