HOUSE COMMITTEE ON TRADE AND ECONOMIC DEVELOPMENT

 

 

April 28, 2003 Hearing Room D

1:00 PM Tapes  49 - 50

 

 

MEMBERS PRESENT:            Rep. Patti Smith, Chair

Rep. Vicki Berger, Vice-Chair

Rep. Mary Gallegos, Vice-Chair

Rep. Dave Hunt

Rep. Steve March

Rep. Dennis Richardson

 

MEMBER EXCUSED:             Rep. Mark Hass

 

STAFF PRESENT:                  Kimberly A.  Medford, Committee Administrator

Ryan Sherlock, Committee Assistant

 

MEASURE HEARD:                     SB 215B – Public Hearing and Work Session

 

 

These minutes are in compliance with Senate and House Rules.  Only text enclosed in quotation marks reports a speaker’s exact words.  For complete contents, please refer to the tapes.

 

TAPE/#

Speaker

Comments

TAPE 49, A

003

Chair Smith

Calls the meeting to order at 1:06 p.m. and opens the public hearing on SB 215B.

SB 215B PUBLIC HEARING

005

Kimberly A. Medford

Committee Administrator, provides an overview of SB 215B.

015

Mark Huston

Oregon Economic and Community Development Department. Offers written testimony (EXHIBIT A) in support of SB 215B:

1. Increases the Maximum Loan Amount of the Oregon Business Development Fund (OBDF) to $1 million from $500,000.

075

Rep. March

Asks whether the maximum loan amount is in statute or in rule.

080

Huston

Explains that the maximum loan amount is defined by statute at 50%, but is further defined by rule at 40%.

085

Rep. Hunt

Asks how much is currently in the fund.

090

Huston

Explains that the fund currently holds about nineteen million dollars, and further discusses the make-up of the fund.

095

Rep. Hunt

Asks for the current status of requests for additional funds through the lottery.

100

Huston

Explains that the issue is currently before the Committee on Ways and Means.

105

Doris Penwell

Oregon Economic and Community Development Department. Comments on issue of funding through bond sales.

110

Rep. March

Ask how the bonds are sold and marketed.

115

Huston

Discusses marketing of the bonds in question, and continues with testimony in favor of SB 215B:

2. Eliminate the Set-asides in the Oregon Business Development Fund.

160

Chair Smith

Asks how the business community is alerted to the availability of these funds.

165

Huston

Discusses how the business community is notified including reference to regional offices, partnerships, and the organization’s website. Continues with testimony in support of SB 215B:

3. Eliminate Local Government Resolution of Support for Oregon Business Development Fund Loan.

4. Modify the County Limit on Loans from the Oregon Business Development Fund.

200

Rep. March

Asks whether the department exceeded its statutory authority in assessing loans to businesses in Lane County.

205

Huston

Explains the department did not exceed authority.

210

Rep. March

Points out language in the written testimony which indicates the department exceeded its statutory authority.

215

Huston

Clarifies that the wording in question is misleading and the OBDF has not issued more funds in Lane County than allowed by statute. Continues with testimony in support of SB 215B:

5. Capital Access Program: Allows the Department to Make Initial Deposits in Loan Loss Reserve Accounts for the Capital Access Program.

255

Rep. Richardson

Clarifies that this would make the state liable, effectively limiting the issuing banks liability.

260

Huston

Discusses the banks risk versus the risk incurred by the state.

280

Rep. Richardson

Clarifies figures in the testimony regarding the number of loan applications.

290

Huston

Comments on the figures in question.

315

Rep. Berger

Asks how “distressed areas” are defined by the department.

320

Huston

Explains the process and formula for defining “distressed areas.”

340

Rep. Berger

Asks Ms. Penwell whether there are inconsistencies in the differing definition of “distressed areas.”

355

Penwell

Discusses the various ways in which “distressed areas” is defined, with reference to the Distressed Areas and Associated Index Values chart (EXHIBIT B).

365

Rep. March

Clarifies how the capital access program works.

370

Huston

Outlines the function of the capital access program.

390

Rep. March

Clarifies the default rate.

395

Huston

Explains that the default rate is about 5%, and continues with testimony in favor of SB 215B:

6. Eliminate the Statutory Provision of the Insurance Account for Industrial Development Bonds (Umbrella Reserve Bonds).

425

Rep. Gallegos

Asks for a definition of “eligible projects” wording in the bill.

435

Huston

Discusses the way in which “eligible projects” are defined.

TAPE 50, A

030

Chair Smith

Closes the public hearing on SB 215B, and opens a work session on SB 215B.

SB 215B WORK SESSION

035

Rep. Gallegos

Comments on her perceptions of the bill and the issue.

040

Rep. Gallegos

MOTION:  Moves SB 215B to the floor with a DO PASS recommendation.

045

 

VOTE:  6-0

EXCUSED:  1 - Hass

 

Chair Smith

Hearing no objection, declares the motion CARRIED.

050

Rep. March

MOTION:  Moves SB 215B be placed on the CONSENT CALENDAR.

055

 

VOTE:  6-0

EXCUSED:  1 - Hass

 

Chair Smith

Hearing no objection, declares the motion CARRIED.

060

Chair Smith

Closes the Work Session on SB 215B, and adjourns the meeting at   1:42 p.m.

 

 

EXHIBIT SUMMARY

 

A – SB 215B, written testimony, Mark Huston, 7 pp

B – SB 215B, Distressed Areas and Associated Index Values (chart), Mark Huston, 1 p