Bill Text: OR SB1017 | 2010 | 1st Special Session | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft

---

Bill Title: Relating to loans for economic development; appropriating money; and declaring an emergency.

Spectrum: Moderate Partisan Bill (Democrat 21-4)

Status: (Passed) 2010-04-01 - Effective date, April 1, 2010. [SB1017 Detail]

Download: Oregon-2010-SB1017-Introduced.html

---

     75th OREGON LEGISLATIVE ASSEMBLY--2010 Special Session

NOTE:  Matter within  { +  braces and plus signs + } in an
amended section is new. Matter within  { -  braces and minus
signs - } is existing law to be omitted. New sections are within
 { +  braces and plus signs + } .

LC 119

                        Senate Bill 1017

Sponsored by Senator BONAMICI, Representative DOHERTY; Senators
  BATES, BURDICK, COURTNEY, DEVLIN, DINGFELDER, GEORGE, HASS,
  METSGER, MONNES ANDERSON, MONROE, ROSENBAUM, SCHRADER, TELFER,
  VERGER, WINTERS, Representatives CANNON, CLEM, GREENLICK,
  HARKER, MAURER (Presession filed.)

                             SUMMARY

The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure as
introduced.

  Creates exception to maximum loan amount permitted from Oregon
Business Development Fund for certain applicants proposing
business development projects. Increases maximum amount of loan
that may be approved by Director of Oregon Business Development
Department.
  Expands eligibility for entrepreneurial development loan to
include any business already operating. Increases maximum amount
of annual revenue business may have for purpose of loan
eligibility. Changes collateral requirement for entrepreneurial
development loan.
  Appropriates moneys from Tax Amnesty Fund to Oregon Business
Development Department.
  Sunsets June 30, 2011.
  Declares emergency, effective on passage.

                        A BILL FOR AN ACT
Relating to loans for economic development; creating new
  provisions; amending ORS 285B.059, 285B.080, 285B.746 and
  285B.749; appropriating money; and declaring an emergency.
Be It Enacted by the People of the State of Oregon:
  SECTION 1. ORS 285B.059 is amended to read:
  285B.059. (1) The Oregon Business Development Commission may
approve a business development project proposed in an application
filed under ORS 285B.050 to 285B.098 if, after investigation, the
commission finds that:
  (a) The proposed business development project is feasible and a
reasonable risk from practical and economic standpoints, and that
the loan has reasonable prospect of repayment.
  (b) The applicant can provide good and sufficient collateral
for the loan.
  (c) Moneys in the Oregon Business Development Fund are or will
be available for the proposed business development project.
  (d) There is a need for the proposed business development
project.
  (e) The applicant has not received or entered into a contract
or contracts exceeding $1 million with the commission, under
authority of ORS 285B.050 to 285B.098, for the previous 365 days.
  (2) { + (a) Except as provided in paragraph (b) of this
subsection, + } the total amount of moneys loaned from the fund
for
  { - any - }   { + a + } business development project
 { - shall - }   { + may + } not exceed 50 percent of the cost of
the project.
   { +  (b) The total amount of moneys loaned from the fund for a
business development project may exceed 50 percent of the cost of
the project if two or more lenders have denied requests from the
applicant to commit to participate in the financing of the
project and the applicant has no other available financing. + }
  (3) { + (a) + }   { - Except when the applicant is a county or
municipality or when there are payments other than the scheduled
principal and interest payments, no money shall - }  { +  Except
as provided in paragraph (b) of this subsection, moneys may
not + } be loaned from the fund for
  { - any - }   { + a + } business development project unless
there exists a commitment from a commercial or private lender, or
a local development group, to participate in the financing of the
project.
   { +  (b) Moneys may be loaned from the fund for a business
development project without a commitment from a commercial or
private lender, or a local development group, to participate in
the financing of the project if:
  (A) The applicant is a county or municipality;
  (B) There are payments other than the scheduled principal and
interest payments; or
  (C) Two or more lenders have denied requests from the applicant
to commit to participate in the financing of the project and the
applicant has no other available financing. + }
  (4) To encourage private sector and local development group
participation in the financing of business development projects,
the commission may subordinate the security position of the fund
to that of other lenders.
  (5) In each fiscal year of a biennium, not less than 15 percent
of all moneys available for lending from the fund   { - are - }
 { + is + } reserved for loans to certified emerging small
business enterprises which are located in or draw their
workforces from within distressed areas as determined by the
Oregon Business Development Department in cooperation with the
Employment Department of this state. Any amounts reserved for
loans to such businesses that are not loaned in one fiscal year
shall be added to the amount reserved for loans to such
businesses in the subsequent fiscal year. If the Oregon Business
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 (2)(g)(B), make loans to service and retail
businesses operated by emerging small business enterprises.
  SECTION 2. ORS 285B.080 is amended to read:
  285B.080. (1) The Oregon Business Development Commission may
appoint the Director of the Oregon Business Development
Department as the commission's representative and agent in all
matters pertaining to ORS 285B.050 to 285B.098.
  (2) The director shall ensure that all provisions of ORS
285B.050 to 285B.098 are complied with and that appropriately
trained personnel are employed to properly administer the fiscal
and other portions of ORS 285B.050 to 285B.098.
  (3) The director shall have the authority in the director's
sole discretion to approve loans for business development
projects in the amount of   { - $100,000 - }  { +  $250,000 + }
or less and to disburse funds for such projects.
  SECTION 3. ORS 285B.746 is amended to read:
  285B.746. (1) The Oregon Business Development Department may
approve a loan requested in an application filed under ORS
285B.743 if, after investigation, it finds that:
  (a) The applicant is enrolled in a small business management
program with a small business development center or certified
entity;
  (b) The applicant has prepared a business plan for the
business, which has been reviewed by a small business development
center or other entity certified by the department to review
business plans; and
  (c) The applicant is not effectively owned or controlled by
another business entity or other person that, either by itself or
when combined with the applicant, is not eligible for a loan
under ORS 285B.740 to 285B.758.
  (2) In addition to the requirements for loan approval described
in subsection (1) of this section, in order to obtain a loan
under ORS 285B.740 to 285B.758, an applicant must also satisfy
 { - two - }  { +  one + } of the following conditions:
    { - (a) The business or proposed business, at the time of
application, must not have been operating for more than 36
months. - }
    { - (b) - }  { +  (a) + } The business must have annual
revenues of   { - less than $175,000 - }  { +  $500,000 or
less + } in the 12-month period immediately preceding the date of
application.
    { - (c) - }  { +  (b) + } The business or proposed business
 { - is - }   { + must be + } owned { + , + } in whole or in
part { + , + } by a person certified as having a severe
disability by the Department of Human Services or the Commission
for the Blind.
  SECTION 4. ORS 285B.749 is amended to read:
  285B.749. (1) The Oregon Business Development Department may
approve an entrepreneurial development loan under ORS 285B.740 to
285B.758 if, after investigation, it finds that:
  (a) The loan has a reasonable prospect of repayment from cash
flow and collateral and   { - that the loan is fully secured by
collateral value - }  { +  is secured by good and sufficient
collateral + }; and
  (b) The applicant provides equity funds for the project in the
form of cash or property in an amount equal to or greater than 20
percent of the amount of the loan.
  (2) The department shall determine the amount of the initial
loan and any subsequent loan to the borrower. The maximum of all
loans to a borrower from the Oregon Entrepreneurial Development
Loan Fund may not exceed $70,000.
  (3) Entrepreneurial development loans shall be made for a
period not exceeding five years at a rate of interest that does
not exceed 18 percent per annum.
  SECTION 5. ORS 285B.059, as amended by section 1 of this 2010
Act, is amended to read:
  285B.059. (1) The Oregon Business Development Commission may
approve a business development project proposed in an application
filed under ORS 285B.050 to 285B.098 if, after investigation, the
commission finds that:
  (a) The proposed business development project is feasible and a
reasonable risk from practical and economic standpoints, and that
the loan has reasonable prospect of repayment.
  (b) The applicant can provide good and sufficient collateral
for the loan.
  (c) Moneys in the Oregon Business Development Fund are or will
be available for the proposed business development project.
  (d) There is a need for the proposed business development
project.
  (e) The applicant has not received or entered into a contract
or contracts exceeding $1 million with the commission, under
authority of ORS 285B.050 to 285B.098, for the previous 365 days.
  (2)  { - (a) Except as provided in paragraph (b) of this
subsection, - }  The total amount of moneys loaned from the fund

for a business development project may not exceed 50 percent of
the cost of the project.
    { - (b) The total amount of moneys loaned from the fund for a
business development project may exceed 50 percent of the cost of
the project if two or more lenders have denied requests from the
applicant to commit to participate in the financing of the
project and the applicant has no other available financing. - }
  (3)  { - (a) Except as provided in paragraph (b) of this
subsection, - }  { +  Except when the applicant is a county or
municipality or when there are payments other than the scheduled
principal and interest payments,  + }moneys may not be loaned
from the fund for a business development project unless there
exists a commitment from a commercial or private lender, or a
local development group, to participate in the financing of the
project.
    { - (b) Moneys may be loaned from the fund for a business
development project without a commitment from a commercial or
private lender, or a local development group, to participate in
the financing of the project if: - }
    { - (A) The applicant is a county or municipality; - }
    { - (B) There are payments other than the scheduled principal
and interest payments; or - }
    { - (C) Two or more lenders have denied requests from the
applicant to commit to participate in the financing of the
project and the applicant has no other available financing. - }
  (4) To encourage private sector and local development group
participation in the financing of business development projects,
the commission may subordinate the security position of the fund
to that of other lenders.
  (5) In each fiscal year of a biennium, not less than 15 percent
of all moneys available for lending from the fund is reserved for
loans to certified emerging small business enterprises which are
located in or draw their workforces from within distressed areas
as determined by the Oregon Business Development Department in
cooperation with the Employment Department of this state. Any
amounts reserved for loans to such businesses that are not loaned
in one fiscal year shall be added to the amount reserved for
loans to such businesses in the subsequent fiscal year. If the
Oregon Business 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 (2)(g)(B), make loans to
service and retail businesses operated by emerging small business
enterprises.
  SECTION 6. ORS 285B.080, as amended by section 2 of this 2010
Act, is amended to read:
  285B.080. (1) The Oregon Business Development Commission may
appoint the Director of the Oregon Business Development
Department as the commission's representative and agent in all
matters pertaining to ORS 285B.050 to 285B.098.
  (2) The director shall ensure that all provisions of ORS
285B.050 to 285B.098 are complied with and that appropriately
trained personnel are employed to properly administer the fiscal
and other portions of ORS 285B.050 to 285B.098.
  (3) The director shall have the authority in the director's
sole discretion to approve loans for business development
projects in the amount of   { - $250,000 - }  { +  $100,000 + }
or less and to disburse funds for such projects.
  SECTION 7. ORS 285B.746, as amended by section 3 of this 2010
Act, is amended to read:
  285B.746. (1) The Oregon Business Development Department may
approve a loan requested in an application filed under ORS
285B.743 if, after investigation, it finds that:
  (a) The applicant is enrolled in a small business management
program with a small business development center or certified
entity;
  (b) The applicant has prepared a business plan for the
business, which has been reviewed by a small business development
center or other entity certified by the department to review
business plans; and
  (c) The applicant is not effectively owned or controlled by
another business entity or other person that, either by itself or
when combined with the applicant, is not eligible for a loan
under ORS 285B.740 to 285B.758.
  (2) In addition to the requirements for loan approval described
in subsection (1) of this section, in order to obtain a loan
under ORS 285B.740 to 285B.758, an applicant must also satisfy
 { - one - }  { +  two  + }of the following conditions:
   { +  (a) The business or proposed business, at the time of
application, must not have been operating for more than 36
months. + }
    { - (a) - }  { +  (b) + } The business must have annual
revenues of   { - $500,000 or less - }  { +  less than
$175,000 + } in the 12-month period immediately preceding the
date of application.
    { - (b) - }  { +  (c) + } The business or proposed business
must be owned, in whole or in part, by a person certified as
having a severe disability by the Department of Human Services or
the Commission for the Blind.
  SECTION 8. ORS 285B.749, as amended by section 4 of this 2010
Act, is amended to read:
  285B.749. (1) The Oregon Business Development Department may
approve an entrepreneurial development loan under ORS 285B.740 to
285B.758 if, after investigation, it finds that:
  (a) The loan has a reasonable prospect of repayment from cash
flow and collateral and   { - is secured by good and sufficient
collateral - }  { +  that the loan is fully secured by collateral
value + }; and
  (b) The applicant provides equity funds for the project in the
form of cash or property in an amount equal to or greater than 20
percent of the amount of the loan.
  (2) The department shall determine the amount of the initial
loan and any subsequent loan to the borrower. The maximum of all
loans to a borrower from the Oregon Entrepreneurial Development
Loan Fund may not exceed $70,000.
  (3) Entrepreneurial development loans shall be made for a
period not exceeding five years at a rate of interest that does
not exceed 18 percent per annum.
  SECTION 9.  { + The amendments to ORS 285B.059, 285B.080,
285B.746 and 285B.749 by sections 5 to 8 of this 2010 Act become
operative on July 1, 2011. + }
  SECTION 10.  { + In addition to and not in lieu of any other
appropriation, there is appropriated to the Oregon Business
Development Department, for the biennium ending June 30, 2011,
out of the Tax Amnesty Fund created under section 7, chapter 710,
Oregon Laws 2009, the amount of $_______ for the purpose of
carrying out the provisions of ORS 285B.050 to 285B.098. + }
  SECTION 11.  { + This 2010 Act being necessary for the
immediate preservation of the public peace, health and safety, an
emergency is declared to exist, and this 2010 Act takes effect on
its passage. + }
                         ----------