Chapter 956 Oregon Laws 1999

Session Law

AN ACT

HB 2088

Relating to community development; appropriating money; and limiting expenditures.

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

SECTION 1. The Legislative Assembly finds that:

(1) The population of the state is growing and is expected to continue growing well into the 21st Century. That population growth is uneven, resulting in some places struggling to manage new people, jobs and building, and other places being eager to attract a share of growth and economic development. A community's pattern of development can accommodate a growing population and help rebuild rural and distressed economies while maintaining the state's quality of life. Downtown areas need to be revitalized to accommodate more business and civic activity. Affordable housing must be developed near job centers. Rural and distressed communities need to be rebuilt to allow all sectors of the state to share in economic prosperity.

(2) Numerous barriers exist to achieving vibrant downtown areas and community centers, ample affordable housing and thriving rural economies. Overcoming those barriers will require the state to work in partnership with local communities, the private sector and community-based groups to provide livability. Regulations must be balanced with incentives. Private sector financing must be better leveraged. Local planning and zoning codes must allow the redevelopment of strategic infill sites. The needs of working families for housing, transportation and services that are affordable and accessible must be addressed by the entire community.

(3) A critical element in the creation of effective partnerships is a flexible funding source that can serve as an incentive to achieving quality development. Careful targeting of financial incentives can provide the needed impetus for revitalization of downtown areas throughout the state, the creation of affordable housing in the proper places and new job centers in places working to attract new growth.

(4) State government, in tandem with local and federal governments, nonprofit organizations and the business sector, provides a variety of tools to help build strong Oregon communities. Targeted financial incentives will complement existing tools and allow state government and its partners to enhance livability and make cost-effective use of public infrastructure. The resulting communities will be economically viable and will have housing that is affordable to community residents.

SECTION 2. There is hereby established the Community Development Incentive Project Fund, separate and distinct from the General Fund.

SECTION 3. Interest earned by the Community Development Incentive Project Fund shall be credited to the fund. In addition to any other moneys specifically designated by law, the fund shall consist of any amounts appropriated by the Legislative Assembly and any gifts, grants or donations.

SECTION 4. All moneys deposited in the Community Development Incentive Project Fund are continuously appropriated to the Housing and Community Services Department to carry out the purposes of the fund. In addition to any other purpose specifically provided by law, moneys deposited in the fund shall be expended for community development purposes, including but not limited to:

(1) Promoting affordable housing development near jobs and transportation;

(2) Revitalizing downtowns and community centers; and

(3) Rebuilding rural and distressed economies.

SECTION 5. (1) The Housing and Community Services Department may use the moneys in the Community Development Incentive Project Fund in any manner permitted under section 8 of this 1999 Act. However, the primary purpose of the fund is to finance developments identified by the Community Development Incentive Advisory Board if other state or private financing sources are inadequate or unavailable. The department shall make the final determination as to whether financing sources are inadequate or unavailable.

(2) In expending moneys from the fund, the department may use financing mechanisms that include, but are not limited to:

(a) Grants or loans for the development of multifamily or single-family affordable housing located near community centers or employment centers.

(b) Grants or loans for the development of mixed-use real estate projects located in downtown or community center areas.

(c) Grants or loans that result in the placement or retention of businesses in downtown or community center areas.

(d) Partial loan guarantees or other credit enhancement tools to private commercial lenders.

(e) Grants or loans to finance infrastructure development that creates jobs or housing in communities identified by the Economic Development Department as rural or distressed.

(f) Interim ownership by the Housing and Community Services Department of real estate located within downtown or community center areas.

(g) Other financial tools or incentives that the Community Development Incentive Advisory Board determines would further the intended purposes of the fund.

SECTION 6. (1) There is created a Community Development Incentive Advisory Board consisting of the following members:

(a) The Director of the Economic Development Department;

(b) The Director of the Department of Environmental Quality;

(c) The Director of the Housing and Community Services Department;

(d) The Director of the Department of Land Conservation and Development;

(e) The Director of Transportation;

(f) One representative from each of the following industries:

(A) Commercial real estate development;

(B) Residential real estate development; and

(C) Banking;

(g) One representative from each of the following:

(A) Community development organizations;

(B) Economic development organizations;

(C) Downtown development organizations;

(D) The Association of Oregon Counties; and

(E) The League of Oregon Cities; and

(h) One person not otherwise qualified under this subsection who possesses a demonstrated interest in community development.

(2) Advisory board members described in subsection (1)(a) to (e) of this section shall serve as ex officio members. An ex officio member may delegate board membership duties to an employee of the member's department.

(3) The Governor shall appoint the members described under paragraphs (f), (g) and (h) of this subsection. The appointments shall be for a four-year term. Appointed members serve at the pleasure of the Governor.

(4) All members of the advisory board are entitled to compensation as provided under ORS 292.495 for actual and necessary travel expenses incurred in the performance of board duties. In addition, the members of the board representing industries or organizations are entitled to compensation as provided under ORS 292.495.

SECTION 7. (1) The Community Development Incentive Advisory Board shall:

(a) Develop program guidelines, including specific project criteria and financing mechanisms.

(b) Review applications seeking funding from the Community Development Incentive Project Fund and make recommendations for funding approval to the Director of the Housing and Community Services Department.

(c) Review proposals for cooperative agreements or joint projects between the Housing and Community Services Department and other agencies to facilitate the goals of the fund.

(2) Subject to available financing, the advisory board may recommend, and the director may approve, any project that carries out the goals of the fund.

SECTION 8. The Housing and Community Services Department shall:

(1) Administer the Community Development Incentive Project Fund in accordance with rules adopted by the department. Notwithstanding ORS 456.555, department administration of the fund is not subject to State Housing Council policy, rules or standards.

(2) Verify documentation and approve or disapprove funding recommended by the Community Development Incentive Advisory Board under section 7 of this 1999 Act.

(3) Seek to leverage local, federal and private financial resources for use in conjunction with fund expenditures.

(4) Emphasize use of the fund to fill funding gaps in projects identified by the advisory board that are designed to achieve the objectives of the fund.

(5) If making a fund expenditure as a loan, establish lending criteria that allow the fund to create quality development patterns and produce a sound loan portfolio. In establishing the criteria, the department shall permit the assumption of an appropriate level of risk, maintain a reserve for losses and provide for the periodic monitoring of reserve adequacy. Loan repayments may be used by the department in any financially prudent manner consistent with fund goals.

SECTION 9. In addition to any other power or authority granted to the Housing and Community Services Department, the department may:

(1) Acquire property and hold, conserve, improve, lease, sell or otherwise use or exercise control over the property for the purpose of facilitating the use of the property as part of a community development project.

(2) Enter into cooperative agreements or joint projects with other agencies as recommended by the advisory board and approved by the Director of the Housing and Community Services Department.

(3) To the extent authorized by law, enter into contracts for the purchase of land and improvements and exercise control over purchased land and improvements.

(4) To the extent authorized by law, enter into contracts for the completion of site development functions including, but not limited to, design services, design review with local governments and completion of the permitting process.

SECTION 10. In addition to any other duties imposed by law, during the period beginning on the effective date of this 1999 Act and ending June 30, 2000, the Community Development Incentive Advisory Board shall develop specific incentives to achieve the goals of the Community Development Incentive Project Fund and shall recommend those incentives to the Housing and Community Services Department.

SECTION 11. Section 10 of this 1999 Act is repealed January 1, 2001.

SECTION 12. Notwithstanding any other law, the maximum limit for payment of expenses from fees, moneys or other revenues, including Miscellaneous Receipts, but excluding lottery funds and federal revenues, collected or received by the Housing and Community Services Department established in chapter 742, Oregon Laws 1999 (Enrolled House Bill 5033), is increased by $1.

SECTION 13. If House Bill 2153 becomes law and establishes the Community Development Incentive Project Fund, section 2 of this 1999 Act is repealed.

Approved by the Governor August 17, 1999

Filed in the office of Secretary of State August 18, 1999

Effective date October 23, 1999

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