Oregon Bulletin
Rule
Caption: These Capital Access Program rules
are amending definitions, reporting and loan eligibility requirements.
Adm.
Order No.: OBDD 9-2011(Temp)
Filed with Sec. of
State: 12-19-2011
Certified to be
Effective: 12-19-11 thru 6-15-12
Notice Publication
Date:
Rules Amended: 123-018-0010, 123-018-0065, 123-018-0140
Subject: On September 27, 2010 The Small Business Jobs Act
(Congressional HB 5297) was signed into law. One component of the Small
Business Jobs Act was the creation of the State Small Business Credit
Initiative (SSBCI). SSBCI will support at least $15 billion in small business
lending by strengthening state small business programs that leverage
private-sector lenders to extend additional credit. $1.5 billion has been
allocated to provide capitalization for existing state loan and loan guarantee
programs. As a result of the bill, Oregon has been allocated more than $16.5
million for the purpose of providing capitalization to state managed business
finance programs (revolving loan programs, forgivable loan programs, loan
guarantee programs, capital access programs and venture capital
programs).
The primary
deliverable associated with the SSBCI program will be to demonstrate a 10:1
public/private leverage ratio. As a result, by December 31, 2016, to comply
with the terms and intent of the program will need to demonstrate that over
$165 million in private financing (debt and equity) result from the $16.5
million investment in the Business Finance programs outlined in the
application. As a result, the Capital Access Program was identified as a fund
to receive capitalization.
In order to begin
enrolling new loans using the SSBCI funds which will help Oregon begin to meet
the $165 million private leverage requirement associated with the SSBCI funds,
these rules have been amended to reflect the program changes and restrictions
associated with the federal funding.
Rules Coordinator: Mindee Sublette—(503) 986-0036
123-018-0010
Definitions
For the purposes of these rules additional definitions
may be found in Procedural Rules, OAR 123-001 as used in this division of
administrative rules, the following definitions apply, unless the context
requires otherwise:
(1) “Agreement” means a contract between a Financial
Institution and the Department authorizing the Financial Institution to
participate in the Program as required under ORS 285B.113.
(2) “Borrower” means a Qualified Business, including
but not limited to a corporation, partnership, limited liability company, joint
venture, sole proprietorship, cooperative, or non-profit corporation, that has
received a Qualified Loan from a Participating Financial Institution. The
borrower, or any principal of the borrower, may not be an executive officer,
director, or principal shareholder of the financial institution lender; a
member of the immediate family of such executive officer, director or principal
shareholder; or a related interest to any of the above. The terms “executive
officer”, “director”, “principal shareholder”, “immediate family”, and “related
interest” are described in 12 C.F.R. part 215.
(3) “Brownfield” means any real property where
expansion or redevelopment is complicated by actual or perceived environmental
contamination.
(4) “Department” means the State of Oregon Business
Development Department under ORS Chapter 285A.
(5) “Distressed Area” means a geographic area so
designated as described in division 024 of these administrative rules.
(6) “Enrolled Loan” means a Qualified Loan enrolled in
the Program as described in OAR 123-018-0080, including but not limited to a
term loan or line of credit.
(7) “Environmental action” on a brownfield(s) means
activities undertaken to:
(a) Determine if a release has occurred, or may occur,
if the release or potential release poses a significant threat to human health
or the environment, or if additional remedial actions may be required at the
site;
(b) Conduct a remedial investigation and a feasibility
study;
(c) Plan for remedial action or removal; or
(d) Conduct a remedial action or removal action at a
site.
(8) “Fund” means the Capital Access Fund in the State
Treasury under ORS 285B.109.
(9) “Loss” means any principal amount due and not paid,
accrued interest due and not paid, and actual and necessary, documented
out-of-pocket collection expenses at the time the Participating Financial
Institution determines, in a manner consistent with its standard lending and
loan loss criteria and normal method for making such determinations, that an
Enrolled Loan is uncollectible and is to be charged off as a loss. The amount
of principal and interest included in the Loss shall not exceed the principal
amount of the Enrolled Loan, plus accrued and unpaid interest on covered
principal amount from the date the Qualified Loan is made.
(10) “Loss Reserve Account” means an account in the
State Treasury or any Financial Institution that is established and maintained
by the Department for the benefit of a Financial Institution participating in
Program.
(11) “Participating Financial Institution” means a
Financial Institution that has executed an Agreement with the Department to
participate in the Program, has enrolled one or more qualified loans, and has
adequate capacity, as determined by the Department, to underwrite and monitor
business-purpose loans.
(12) “Primary Economic Effect” means the majority of
economic benefit resulting from a business activity. A business’s Primary
Economic Effect is in a particular geographic location if either at least 51
percent of the business’s total revenues are generated, or at least 51 percent
of the business’s total jobs are created or retained, in that location.
(13) “Principal” in regards to a Borrower is defined
as:
(a) If a sole proprietorship, the proprietor;
(b) If a partnership, each managing partner and each
partner who is a natural person and holds a twenty percent (20%) or more
ownership interest in the partnership; and
(c) If a corporation, limited liability company,
association or a development company, each director, each of the five most
highly compensated executives or officers of the entity, and each natural
person who is a direct or indirect holder of twenty percent (20%) or more of
the ownership stock or stock equivalent of the entity.
(14) “Principal” in regards to a Lender is defined as:
(a) If a sole proprietorship, the proprietor;
(b) If a partnership, each partner; and
(c) If a corporation, limited liability company,
association or a development company, each director, each of the five most highly
compensated executives, officers or employees of the entity, and each direct or
indirect holder of twenty percent (20%) or more of the ownership stock or stock
equivalent of the entity.
(15) “Program” means the Capital Access Program
authorized by ORS 285B.109 to 285B.119.
(16) “Qualified Business” means any person, conducting
business for profit or not for profit, which is authorized to conduct business
in the State of Oregon.
(17) “Qualified Loan” means a loan or portion of a loan
made by a Participating Financial Institution to a Qualified Business for any
business activity that has its Primary Economic Effect in Oregon. The term does
not include a loan or portion of a loan used for any of the following purposes:
(a) The purchase of owner-occupied residential housing
or for the construction, improvement, or purchase of residential housing that
is owned or to be owned by the Borrower;
(b) The purchase of real property that is intended for
resale or not used for the business operations of the Borrower;
(c) Refinance of the balance of an existing loan that
is not an Enrolled Loan. Any portion of the loan used for a qualified purpose
(i.e., that is in excess of the balance of an existing loan that is not an
Enrolled Loan) may be eligible to be enrolled.
(d) The purchase of securities;
(e) Lobbying activities;
(f) Repayment of delinquent federal or state income
taxes unless the Borrower has a payment plan in place with the relevant taxing
authority;
(g) Repayment of taxes held in trust or escrow;
(h) Reimbursement of funds owed to any owner, including
any equity injection or injection of capital for the business’ continuance;
(i) Purchase of any portion of the ownership interest
of any owner of the business; or
(j) Refinance of any portion of a loan enrolled in
another state or federal credit enhancement or credit insurance program. The
term also does not include a loan where any Principal of the Borrower has been
convicted of a sex offense against a minor as such terms are defined in section
111 of the Sex Offender Registration and Notification Act (42 U.S.C. 16911).
[Publications: Publications
referenced are available from the agency.]
Stat. Auth.: ORS 285A.075,
285B.115(3) & 285B.117(4)
Stats. Implemented: ORS 285B.109 -
285B.119
Hist.: EDD 27-1990(Temp), f. &
cert. ef. 10-16-90; EDD 3-1991, f. & cert. ef. 4-17-91; EDD 15-1991(Temp),
f. & cert. ef. 10-31-91; EDD 11-1992, f. & cert. ef. 8-18-92; EDD
1-1994(Temp), f. & cert. ef. 1-11-94; EDD 9-1994, f. 5-27-94, cert. ef.
6-1-94; EDD 10-1997(Temp), f. & cert. ef. 10-7-97; EDD 9-1998, f. &
cert. ef. 5-22-98; EDD 8-2005, f. & cert. ef. 10-24-05; EDD 8-2007(Temp),
f. & cert. ef. 9-4-07 thru 2-29-08; EDD 6-2008(Temp), f. & cert. ef.
3-4-08 thru 8-1-08; EDD 22-2008, f. 7-31-08, cert. ef. 8-1-08; OBDD 13-2010, f.
4-30-10, cert. ef. 5-1-10; OBDD 9-2011(Temp), f. & cert. ef. 12-19-11 thru
6-15-12
123-018-0065
Loan Eligibility
A Participating Financial Institution may determine
that a Qualified Loan is eligible for the Department to enroll in the Program
if the Participating Financial Institution determines the Qualified Loan meets
the following conditions:
(1) The Qualified Loan is not for a business enterprise
in which a person described in section (2) of this section has a shared
ownership, investment or other significant pecuniary interest; and
(2) The Qualified Loan is provided to a Borrower, who
is not an executive officer, director or principal shareholder of the
Participating Financial Institution, or person with comparable official
capacity with or significant ownership in the Participating Financial
Institution, or a member of the immediate family of such a person.
(3) The Borrower may not be:
(a) A business engaged in speculative activities that
develop profits from fluctuations in price rather than through normal course of
trade unless those activities are incidental to the regular activities of the
business and part of a legitimate risk management strategy to guard against
price fluctuations related to the regular activities of the business; or
(b) A business that earn more than half of its annual
net revenue from lending activities; or
(c) A business engaged in pyramid sales, where a
participant’s primary incentive is based on the sales made by an
ever-increasing number of participants; or
(d) A business engaged in activities that are
prohibited by federal law or applicable law in the jurisdiction where the
business is located or conducted; or
(e) A business engaged in gambling enterprises, unless
the business earns less than 33% of its annual net revenue from lottery sales.
Stat. Auth.: ORS 285A.075 &
285B.115(3)
Stats. Implemented: ORS 285B.115
& 285B.119
Hist.: EDD 8-2005, f. & cert.
ef. 10-24-05; OBDD 9-2011(Temp), f. & cert. ef. 12-19-11 thru 6-15-12
123-018-0140
Reporting
(1) When a Loss Reserve Account is domiciled with the
Participating Financial Institution, the Participating Financial Institution
shall provide the Department with a monthly statement providing details of the
balance and the payments and receipts activity in the Loss Reserve Account for
the prior month.
(2) On or before January 15, April 15, July 15, and
October 15 of each year, a Participating Financial Institution must file a
quarterly report with the Department providing a complete list of Enrolled
Loans and indicating the outstanding balance of each of its Enrolled Loans.
(3) When a Participating Financial Institution computes
the aggregate outstanding balance of all its Enrolled Loans, it may only
consider the balance of the portion of a loan enrolled in the Program.
Stat. Auth.: ORS 285A.075 &
285B.115(3)
Stats. Implemented: ORS 285B.115
Hist.: EDD 27-1990(Temp), f. &
cert. ef. 10-16-90; EDD 3-1991, f. & cert. ef. 4-17-91; EDD 15-1991(Temp),
f. & cert. ef. 10-31-91; EDD 11-1992, f. & cert. ef. 8-18-92; EDD
8-2005, f. & cert. ef. 10-24-05; OBDD 9-2011(Temp), f. & cert. ef.
12-19-11 thru 6-15-12
Rule
Caption: The Special Public Works Fund
rules are amended to lengthen the loan repayment period.
Adm.
Order No.: OBDD 10-2011
Filed with Sec. of
State: 12-30-2011
Certified to be
Effective: 1-1-12
Notice Publication
Date: 12-1-2011
Rules Amended: 123-042-0026, 123-042-0045
Subject: The Special Public Works Fund rules are amended to conform
to HB 2069 passed in the 2011 Legislative Session. The loan repayment period
has been extended from 25 years to 30 years.
Rules Coordinator: Mindee Sublette—(503) 986-0036
123-042-0026
Loan and Grant Information
(1) The moneys in the fund shall be used primarily to
provide loans to municipalities for projects. Grants may be given only when
loans are not feasible due to the financial need of the municipality or special
circumstances of a project. The level of loan or grant funding, if any, may be
determined by the authority on a case-by case-basis. The authority shall
determine awards in a manner that maximizes the use of available resources and
maintains the desired credit standards of the fund according to the following
criteria:
(a) Amount requested;
(b) Type;
(c) Interest rate;
(d) Terms and conditions of an award. The authority may
offer an alternate mix or lower amount of assistance than requested, and it may
investigate and recommend other sources of funds for all or part of a proposed
project.
(2) Grants:
(a) If the authority determines that a firm business
commitment project meets the minimum criteria for a grant, the authority may
make a further determination on the amount of the grant. The maximum grant
amount is $500,000 per project or 85% of allowable project costs, whichever is
less. The amount of grant will be based primarily on the number of eligible
commercial and industrial jobs proposed to be created or retained with a
maximum of $5,000 for each job created or retained. The maximum grant amount
will be awarded only in special circumstances as described in the authority’s
adopted policy.
(b) If a grant is for the acquisition and improvement
of real property, the maximum grant amount shall not exceed the fair market
value of the real property after the improvements have been made or the value
placed on the real property and improvements on the assessment rolls, whichever
is less.
(c) The authority shall receive in accordance with OAR
123 division 70 a copy of the appropriate First Source Hiring Agreement or
assurance from the municipality that one will be entered into before the grant
is dispersed.
(d) Not less than 60 percent of the grants awarded from
the Special Public Works Fund in any biennium shall be used to provide
assistance to distressed or rural areas.
(e) The authority may not expend more than $900,000 for
grants or direct assistance, if any, for planning projects to municipalities in
a biennium.
(f) A development project that qualifies as an eligible
commercial jobs project or a firm business commitment project may be eligible
to receive a grant. When making a determination to award a grant, the authority
will apply prudent fiscal management of the fund in order to manage constrained
funding resources. In addition to the criteria and process contained in its
policies on grant and loan funding, the authority shall apply the following
minimum criteria for grants:
(A) The authority’s financial analysis determines that
the municipality’s borrowing capacity is insufficient to support the amount of
the loan requested for the project;
(B) Jobs will be created or retained as a result of the
grant being awarded; and
(C) The authority has received confirmation that the
firm business commitment or the eligible commercial jobs project will not
occur, or that the jobs will be lost, if the municipality does not receive a
grant.
(3) Loans:
(a) Maximum loan amount for a project will be based on
the authority’s financial and credit analysis of the municipality’s capacity to
repay, the availability of moneys in the fund, and prudent fund management.
Projects that the authority determines are not financially feasible, or loans
that cannot be adequately secured, will not be funded.
(b) When the authority makes a loan to finance
temporary project financing, all of the following apply:
(A) The municipality must receive an award from the
authority before project construction begins
(B) The award will consist of loan only, and will not
exceed the cost of the project;
(C) The repayment terms of the loan can include
deferred repayment of principal and/or interest for the term of the loan.
(c) A development project may receive loan funding as
follows:
(A) The initial or renegotiated term is limited to the
usable life of the contracted project, or 30 years from the year of project
completion, whichever is less.
(B) The interest rate on a loan will be based on market
conditions for similar debt, and will be set at the time of the award.
(C) The interest rate on a state revenue bond loan will
be equal to the coupon rates on the bonds. Until the state revenue bonds are
sold, the municipality will pay interest on the outstanding principal balance
of the loan at the rate established by the authority.
(d) The maximum loan amount per project is $10,000,000.
(e) A loan amount requiring Board approval shall be
established by the Board.
(f) The loan shall be a full faith and credit
obligation, which is payable from any taxes that the municipality may levy
within the limitations of Article XI, Sections 11 and 11b, of the Oregon
Constitution and all legally available funds of the municipality. Additional
pledges of revenue or other collateral may also be required and may include,
but are not limited to:
(A) Specific revenues of the municipality may also be
required to be pledged as security, including revenues of the project, special
assessment revenues and other collateral.
(B) If repayment of a loan substantially depends on
revenues the municipality will receive from a lessee or payments from a
benefiting business, the authority will assess the financial capacity of the
payor, the adequacy of the security, the financial instrument(s) requiring such
payments to the municipality, and any liens, pledge(s), or assignments of
collateral from the payor to the municipality. The authority may require an
assignment of such revenue and collateral from the municipality.
(C) If repayment of the loan substantially depends on a
pledge of tax increment revenues from an urban renewal agency to the borrowing
municipality, the authority’s financial analysis will extend to the financial
feasibility of the projected revenues and the financial and legal adequacy of
the proposed pledge of tax increment revenue.
Stat. Auth.: ORS 285B.419 & 285A.075
Stats. Implemented: ORS 285B.410 -
285B.482
Hist.: EDD 10-2006, f. & cert.
ef. 11-1-06; EDD 13-2008(Temp), f. & cert. ef. 4-9-08 thru 10-5-08; EDD
31-2008, f. 10-2-08, cert. ef. 10-3-08; OBDD 41-2010, f. 11-30-10, cert. ef.
12-1-10; OBDD 10-2011, f. 12-30-11, cert. ef. 1-1-12
123-042-0045
Planning Project Eligibility,
Criteria and Funding
(1) A planning project, as defined in ORS 285B.410(9),
may be eligible for a loan. The authority will make awards for loans based on
availability of moneys in the fund and prudent fund management as well as its
financial analysis of the municipality’s ability to repay the loan;
(2) A planning project conducted for the purpose of
developing industrial lands, including planning for industrial site
certification, is eligible for a grant of up to $60,000 per site, per biennium
or 85% of the allowable planning project cost, whichever is less. This type of
planning project must meet the following criteria:
(a) The land must be zoned ‘industrial”; and
(b) The land meets marketability standards as
determined by the department using its adopted policy
Stat. Auth.: ORS 285B.419 &
285A.075
Stats. Implemented: ORS 285B.410 -
285B.482
Hist.: EDD 10-2006, f. & cert.
ef. 11-1-06; OBDD 41-2010, f. 11-30-10, cert. ef. 12-1-10; OBDD 10-2011, f.
12-30-11, cert. ef. 1-1-12
Rule
Caption: These rules are being amended to
correct small errors made in a former filing.
Adm.
Order No.: OBDD 11-2011
Filed with Sec. of
State: 12-30-2011
Certified to be
Effective: 1-1-12
Notice Publication
Date: 12-1-2011
Rules Amended: 123-475-0012, 123-475-0025, 123-475-0030
Subject: These rules are being amended due to small spelling
errors and the addition of the word “compatible” in 123-475-0030.
Rules Coordinator: Mindee Sublette—(503) 986-0036
123-475-0012
Public Art Advisory Committee
The Oregon Arts Commission may establish a Public Art
Advisory Committee consisting of two Oregon Arts Commissioners and up to seven
arts professionals designated by the Oregon Arts Commission. The Oregon Arts
Commission may use the Public Art Advisory Committee to make recommendations
regarding general policies of the Program. The Public Art Advisory Committee
will serve as a review panel for creation of a Roster of Prequalified Artists,
may nominate and review artists for consideration by individual Art Selection
Committees, and will serve as a review panel for Relocation or Deaccession
requests. The Public Art Advisory Committee will not make selections for individual
Program projects.
Stat. Auth.: ORS 359.025, 359.142
Stats. Implemented: ORS 276.073
– 276.090
Hist.: OAC 1-2010, f. 6-30-10,
cert. ef. 7-1-10; Renumbered from 190-020-0012, OBDD 36-2010, f. 10-14-10,
cert. ef. 11-1-10; OBDD 11-2011, f. 12-30-11, cert. ef. 1-1-12
123-475-0025
Selection Committee Procedure
(1) The Selection Committee shall meet to consider the
particular needs of the Project including budget, suitable art forms,
appropriate locations, and method of artist/artwork selection.
(2) The Selection Committee may use any of the
following methods for selection of Works of Art for a Project:
(a) Open Competition: A prospectus will be prepared by
the Oregon Arts Commission with the approval of the Selection Committee and
will be made broadly available to artists. Artists will be asked to submit
images or other materials to the Commission. The Selection Committee may
commission new work and also may purchase available work.
(b) Two-stage competition. An open competition may
occur in two stages whereby a limited number of finalists selected from the
first stage of competition will be asked to submit more detailed proposals.
Each of the finalists may enter into a contract with the Contracting Agency
that provides for payment of a professional fee for preparation of a detailed
proposal or consultation interview. The Oregon Arts Commission or Selection
Committee may recommend the amount of the professional fee.
(c) Prequalified Artist Roster: The Selection Committee
may interview or commission proposals from one or more artists on the
Prequalified Artist Roster, or may make direction selection(s) from the Roster.
(d) Nominated Pool: The Selection Committee may
designate an informal panel of arts professionals to nominate artists
appropriate for consideration for the Project. The resulting pool will be
reviewed by the Selection Committee.
(e) The Public Art Advisory Committee may designate an
informal panel of arts professionals to nominate artists appropriate for
consideration to the State of Oregon Art Collection. The resulting pool(s) may
be reviewed by individual Selection Committees.
(f) Limited Competition: In cases when, in the judgment
of the Oregon Arts Commission, it is not feasible to conduct an open
competition for a specific Work of Art, the Oregon Arts Commission will
initiate a Limited Competition by inviting several artists to submit materials
to the Selection Committee. If detailed proposals or consultation interviews
are requested, each artist will be paid a professional fee for preparation of
the detailed proposal or consultation interview. The Oregon Arts Commission or
Selection Committee may recommend the amount of the professional fee.
(g) Direct Selection: When budget constraints or
construction schedules are such that the Selection Committee determines that an
open competition cannot be held, Direct Selection of the artist(s) or completed
work will be made by the Selection Committee.
Stat. Auth.: ORS 359.025, 359.142
Stats. Implemented: ORS
276.073-276.090
Hist.: AC 1-1979, f. & ef.
7-23-79; AC 1-1991, f. 3-22-91, cert. ef. 3-21-91; OAC 1-2010, f. 6-30-10,
cert. ef. 7-1-10; Renumbered from 190-020-0025, OBDD 36-2010, f. 10-14-10,
cert. ef. 11-1-10; OBDD 11-2011, f. 12-30-11, cert. ef. 1-1-12
123-475-0030
Criteria for Selecting Works of
Art
(1) Style and Nature: Works of Art of any aesthetic
persuasion that are compatible in scale, material, form and content with their
surroundings may be considered.
(2) Diversity of the Collection: The Oregon Arts
Commission seeks to encourage and maintain a diverse collection for the state,
including site-specific works developed with collaboration between an artist
and design team, existing works of art created by an artist and purchased for
permanent installation, and, when appropriate, documented time-based works or
installations.
(3) Quality: The inherent quality of the work itself
will be the highest priority for selection.
(4) Media: All forms of Works of Art may be considered.
Works of Art may be either portable or permanently affixed or integral to the
building or structure, or part of a temporary exhibition.
(5) Permanence: Due consideration will be given to
structural and surface soundness and to permanence in terms of relative
protection against theft, vandalism, weathering, or excessive maintenance or
repair costs.
(6) Method of Acquisition: Either existing works or
those commissioned for specific Projects may be acquired.
Stat. Auth.: ORS 359.025, 359.142
Stats. Implemented: ORS 276.073
– 276.090
Hist.: AC 1-1979, f. & ef.
7-23-79; AC 1-1991, f. 3-22-91, cert. ef. 3-21-91; OAC 1-2010, f. 6-30-10,
cert. ef. 7-1-10; Renumbered from 190-020-0030, OBDD 36-2010, f. 10-14-10,
cert. ef. 11-1-10; OBDD 11-2011, f. 12-30-11, cert. ef. 1-1-12
Notes
1.) This online version of the OREGON BULLETIN is provided for convenience of reference and enhanced access. The official, record copy of this publication is contained in the original Administrative Orders and Rulemaking Notices filed with the Secretary of State, Archives Division. Discrepancies, if any, are satisfied in favor of the original versions. Use the OAR Revision Cumulative Index found in the Oregon Bulletin to access a numerical list of rulemaking actions after November 15, 2011.
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