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The Oregon Administrative Rules contain OARs filed through April 15, 2013

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OREGON BUSINESS DEVELOPMENT DEPARTMENT

DIVISION 17

OPERATION OF OREGON BUSINESS DEVELOPMENT FUND

123-017-0005

Purpose

The purpose of these rules is to provide procedures, standards and criteria for the making of loans from the Oregon Business Development Fund.

Stat. Auth.: ORS 285A.075
Stats. Implemented: ORS 285B.050 - 285B.098
Hist.: EDD 2-1983(Temp), f. & ef. 5-25-83; EDD 1-1984, f. & ef. 1-5-84; EDD 37-1988, f. & cert. ef. 12-15-88; EDD 11-1999, f. & cert. ef. 10-11-99

123-017-0007

Policy and Set Asides

(1) It is the policy of the Business Development Commission, the Finance Committee and the Business Development Department to make loans from the Oregon Business Development Fund to qualified applicants without regard to race, color, creed, sex, age or national origin.

(2) Fifteen percent of the available money in the Fund shall be set aside for loans to emerging small enterprises that are located in or draw their work forces from within distressed areas.

(3) The Oregon Targeted Development Account is hereby established within the Oregon Business Development Fund to make loans in distressed areas. The Commission authorizes the Department to transfer from time to time up to $10 million into or out of the Oregon Targeted Development Account.

Stat. Auth.: ORS 285A.075
Stats. Implemented: ORS 285B.050 - 285B.098
Hist.: EDD 1-1984, f. & ef. 1-5-84; EDD 10-1988, f. & cert. ef. 3-18-88; EDD 37-1988, f. & cert. ef. 12-15-88; EDD 9-1989(Temp), f. & cert. ef. 11-3-89; EDD 5-1990, f. & cert. ef. 3-5-90; EDD 11-1999, f. & cert. ef. 10-11-99; EDD 6-2001, f. & cert. ef. 10-9-01; EDD 5-2005, f. & cert. ef. 5-11-05; EDD 22-2009, f. 11-30-09, cert. ef. 12-1-09

123-017-0008

Delegation

(1) Authority for the day-to-day operation of the fund, including approval of loans and projects, and amendments thereto, is delegated to the Finance Committee.

(2) The Commission shall review and evaluate the operation of the fund with such frequency as it may from time to time determine, and may order any changes that it considers necessary or desirable.

(3) The Commission shall retain final authority over policies and administrative procedures governing the operation of the fund.

(4) The Director or designee is authorized to execute any document reasonably necessary or convenient to close any loan approved by the Finance Committee or, in the case of loans of $250,000 or less, by the Director.

(5) When applicable, the references to the Finance Committee shall include the Director, acting in regard to loans for business development projects of $250,000 or less pursuant to ORS 285B.080(3).

Stat. Auth.: ORS 285A.075
Stats. Implemented: ORS 285B.050 - 285B.098
Hist.: EDD 10-1988, f. & cert. ef. 3-18-88; EDD 37-1988, f. & cert. ef. 12-15-88; EDD 9-1989(Temp), f. & cert. ef. 11-3-89; EDD 5-1990, f. & cert. ef. 3-5-90; EDD 11-1999, f. & cert. ef. 10-11-99; EDD 6-2001, f. & cert. ef. 10-9-01; EDD 6-2007(Temp), f & cert. ef. 8-29-07 thru 2-23-08; EDD 3-2008(Temp), f. & cert. ef. 2-26-08 thru 8-1-08; EDD 21-2008, f. 7-31-08, cert. ef. 8-1-08; EDD 22-2009, f. 11-30-09, cert. ef. 12-1-09; OBDD 9-2010(Temp), f. & cert. ef. 4-12-10 thru 10-9-10; OBDD 20-2010(Temp), f. & cert. ef. 5-28-10 thru 10-9-10; OBDD 33-2010, f. & cert. ef. 10-1-10

123-017-0010

Definitions

For the purposes of these rules additional definitions may be found in Procedural Rules, OAR 123-001. For purposes of this division of administrative rules, unless the context demands otherwise:

(1) "Applicant" means any county, municipality, person or any combination of counties, municipalities or persons applying for a loan from the Oregon Business Development Fund under ORS 285B.050 to 285B.098.

(2) "Business Development Project" means the acquisition, engineering, improvement, rehabilitation, construction, operation or maintenance of any property, real or personal, that is used or is suitable for use by an economic enterprise and that will result in or will aid, promote or facilitate, development of one or more of the following activities:

(a) Manufacturing or other industrial production;

(b) Agricultural development or food processing;

(d) Development or improved utilization of natural resources;

(e) Convention facilities and trade centers;

(f) Destination facilitiesother than retail or food service businesses;

(g) Transportation or freight facilities; and

(h) Other activities that represent new technology or type of economic enterprise that the Finance Committee determines are needed to diversify the economic base of an area but not including:

(A) Construction of office buildings, including corporate headquarters; and

(B) Retail businesses, shopping centers or food service facilities;

(C) An office area or facility providing an internal support function to, and serving as an integral part of, a business development project shall not be considered an office building under paragraph (h)(A) of this section.

(3) "Fund" or "OBDF" means the Oregon Business Development Fund as defined and set forth in ORS 285B.050–285B.098.

(4) "Local Development Group" means any public or private corporation that has as one of its primary purposes, as stated in its articles of incorporation, charter or bylaws, the promotion of economic development in any part of the State of Oregon.

(5) "Municipality" means any city, municipal corporation or quasi-municipal corporation.

(6) "Person" means any individual, association of individuals, joint venture, partnership, limited liability company or corporation.

(7) "Emerging Small Business" means any business as defined in ORS 200.005.

(8) "Convention center" means a facility for the holding of meetings, conferences, conventions, trade shows or similar gatherings. Sleeping accommodations may be included but at least one-third of the OBDF proceeds must be used for public meeting facilities. Such facilities must have the capacity to seat a minimum of 300 people. However, the Finance Committee, in its sole discretion, may approve financing for projects consisting solely or primarily of sleeping accommodations if the applicant sufficiently demonstrates that existing sleeping accommodations are inadequate for existing facility meeting space.

(9) "Destination facility" means a project which has a significant impact on the regional tourism economy and has the capacity to be marketed to national or international markets. Incidental food service facilities may be included. Sleeping accommodations without unique attraction capabilities are not eligible.

(10) “County” means any county or federally recognized Oregon Indian tribe.

Stat. Auth.: ORS 285A.110
Stats. Implemented: ORS 285B.050 & 285B.092
Hist.: EDD 2-1983(Temp), f. & ef. 5-25-83; EDD 1-1984, f. & ef. 1-5-84; EDD 10-1988, f. & cert. 3-18-88; EDD 37-1988, f. & cert. ef. 12-15-88; EDD 9-1989(Temp), f. & cert. ef. 11-3-89; EDD 5-1990, f. & cert. ef. 3-5-90; EDD 8-1996(Temp), f. & cert. ef. 8-13-96; EDD 4-1997, f. & cert. ef. 3-25-97; EDD 11-1999, f. & cert. ef. 10-11-99; EDD 6-2001, f. & cert. ef. 10-9-01; EDD 6-2007(Temp), f & cert. ef. 8-29-07 thru 2-23-08; EDD 3-2008(Temp), f. & cert. ef. 2-26-08 thru 8-1-08; EDD 21-2008, f. 7-31-08, cert. ef. 8-1-08; EDD 22-2009, f. 11-30-09, cert. ef. 12-1-09; OBDD 9-2010(Temp), f. & cert. ef. 4-12-10 thru 10-9-10; Administrative correction 10-26-10

123-017-0015

Eligibility

(1) Eligible projects are business development projects as defined in OAR 123-017-0010(2). If the Department is unable to obtain a sufficient number of approvable applications to meet the requirements of ORS 285B.059(5), it may, notwithstanding the limitations imposed by 285B.050(2)(g)(B), make loans to service and retail businesses operated by emerging small businesses which are located in or draw their workforces from within distressed areas as determined by the Department, when such projects provide compelling economic development benefits. The amount of loans the Department may make to service and retail businesses under (1) of this section shall be limited to the amount calculated under the method described in 285B.059(5).

(2) Eligible purposes are the financing of land, buildings, fixture, equipment and machinery, research and development, and the provision of working capital.

(3) Eligible applicants are defined in OAR 123-017-0010(1).

(4) The relocation of a facility from one labor market area to another, if not accompanied by an expansion of the applicant's business or employment, is an eligible activity if:

(a) The relocation is caused by forces beyond the control of the applicant; or

(b) The relocation is necessary for the continued operation of the business; or

(5) Relending of funds shall not be an eligible activity, except that the funds may be used for the local injection share of an SBA 503 or 504 Certified Development Company transaction.

(6) In cases where an otherwise eligible company or project has an insignificant (less than 25 percent) ineligible portion, the entire project may be determined eligible for a loan from the fund.

(7) Other than as specified in section (6) and (10) of this rule, Fund financing will be limited to 40 percent of the amount of the eligible costs, except that Fund financing may equal up to 50 percent of eligible costs when the application is submitted through a Financial Institution.

(8) Tourist facilities shall not be eligible unless:

(a) The project can be qualified as a convention center; or

(b) The project can be qualified as a destination attraction with significant regional economic impact.

(9) Refinancing of existing debt, including existing trade payables and delinquent taxes, shall not be eligible unless the applicant demonstrates to the satisfaction of the Finance Committee that:

(a) The applicant contributes significantly to a target population or to a geographical area targeted by the Oregon Business Development Fund;

(b) The applicant requires refinancing to remain viable. Assessment of viability will be made at the sole discretion of the Finance Committee;

(c) Lenders agree to extend due dates, provide additional financing or provide other favorable terms to the applicant; and

(d) The applicant meets all other requirements set forth in statute and administrative rule, including demonstrating to the satisfaction of the Finance Committee that the project is feasible and a reasonable risk, has a reasonable prospect of repayment and can provide good and sufficient collateral.

(10) Except for the Oregon Targeted Development Account, Fund financing may exceed 40 percent of the amount of the eligible project costs and/or may be approved without a commitment from a commercial or private lender, or a local development group, to participate in the financing of the project, if

(a) Two or more Financial Institutions have denied a financing request for the project by the borrower. Such denied financing request must:

(A) Be for a loan for an eligible Fund loan purpose; and

(B) Be evidenced by a written denial from the Financial Institution specifying the reason(s) for the denial. Denial for reasons such as an incomplete application, failure to provide requested information, or the requested loan is for a purpose for which or on terms under which the Financial Institution does not make loans is not acceptable as a denial of financing; and

(b) The applicant certifies that there is no other available financing for the project with documentation as required by the Finance Committee.

Stat. Auth.: ORS 285A.075
Stats. Implemented: ORS 285B.059, 285B.080(3) & 285B.092
Hist.: EDD 2-1983(Temp), f. & ef. 5-25-83; EDD 1-1984, f. & ef. 1-5-84; EDD 10-1988, f. & cert. ef. 3-18-88; EDD 37-1988, f. & cert. ef. 12-15-88; EDD 9-1989(Temp), f. & cert. ef. 11-3-89; EDD 5-1990, f. & cert. ef. 3-5-90; EDD 25-1990 (Temp), f. & cert. ef. 9-13-90; EDD 29-1990, f. & cert. ef. 12-12-90; EDD 6-1991(Temp), f. & cert. ef. 6-18-91; EDD 8-1996(Temp), f. & cert. ef. 8-13-96; EDD 4-1997, f. & cert. ef. 3-25-97; EDD 9-1997(Temp), f. & cert. ef. 10-7-97; EDD 8-1998, f. & cert. ef. 5-22-98; EDD 11-1999, f. & cert. ef. 10-11-99; EDD 6-2001, f. & cert. ef. 10-9-01; EDD 6-2007(Temp), f & cert. ef. 8-29-07 thru 2-23-08; EDD 3-2008(Temp), f. & cert. ef. 2-26-08 thru 8-1-08; EDD 21-2008, f. 7-31-08, cert. ef. 8-1-08; EDD 22-2009, f. 11-30-09, cert. ef. 12-1-09; OBDD 9-2010(Temp), f. & cert. ef. 4-12-10 thru 10-9-10; OBDD 20-2010(Temp), f. & cert. ef. 5-28-10 thru 10-9-10; OBDD 33-2010, f. & cert. ef. 10-1-10

123-017-0020

Preference

(1) Except in the case of a loan made from the Oregon Targeted Development Account, the Finance Committee shall give preference to loan applications for projects that demonstrate an overall community benefit and that have one or more of the following characteristics:

(a) Have a ratio of at least one projected job created or saved per $30,000 sought to be borrowed from the Oregon Business Development Fund.

(b) Are operated by businesses with 100 or fewer employees;

(d) Are located in Enterprise Zones designated under ORS 285C.050 – 285C.250;

(e) Employ displaced workers in the area;

(f) Assist in the economic diversification of the area;

(g) Contain a significant amount of owner equity capital. At least ten percent of the project costs for established companies (three years old or more) and 30 percent of project costs for start-ups (firms less than three years old, or firms making the transition from research and development to production) should come from equity or subordinated loans from the owners;

(h) Maximize participation by financial institutions and local development groups;

(i) Produce goods or services for the export market;

(j) Encourage the flow of capital from outside the local area; and

(k) Do not cause severe adverse competitive disadvantages to existing businesses.

(2) The Finance Committee shall be the sole judge of the relative importance of each of the above factors for each individual loan application under consideration. Factors will not necessarily be assigned the same weights under all circumstances.

(3) In the case of a loan made from the Oregon Targeted Development Account, the Finance Committee will strive to fund projects that will create or save at least one job for every $20,000 of Oregon Business Development Fund investment.

Stat. Auth.: ORS 285A.075
Stats. Implemented: ORS 285B.059 & 285B.092
Hist.: EDD 2-1998(Temp), f. & cert. ef. 5-25-83; EDD 1-1984, f. & cert. ef. 1-5-84; EDD 10-1988, f. & cert. ef. 3-18-88; EDD 37-1988, f. & cert. ef. 12-15-88; EDD 5-1990, f. & cert. ef. 3-5-90; EDD 6-1991(Temp), f. & cert. ef. 6-18-91; EDD 11-1999, f. & cert. ef. 10-11-99; EDD 6-2001, f. & cert. ef. 10-9-01; EDD 5-2005, f. & cert. ef. 5-11-05; EDD 6-2007(Temp), f & cert. ef. 8-29-07 thru 2-23-08; EDD 3-2008(Temp), f. & cert. ef. 2-26-08 thru 8-1-08; EDD 21-2008, f. 7-31-08, cert. ef. 8-1-08; OBDD 20-2010(Temp), f. & cert. ef. 5-28-10 thru 10-9-10; OBDD 33-2010, f. & cert. ef. 10-1-10

123-017-0025

Application Procedure

(1) It is the policy of the Finance Committee to strive for and encourage, throughout the application process:

(a) Maximum participation by financial institutions and local development groups; and

(b) A minimum administrative burden on the applicant and on the local government.

(2) Any applicant may submit an application to the Department on a form approved by the Department, together with an application fee.

(3) If the amount of the loan being sought from the Fund is $250,000 or less, the Director may in the Director's sole discretion approve or deny the loan request or forward it to the Finance Committee for the Committee's consideration.

(4) If the amount of the loan being sought from the fund exceeds $250,000 the Department shall make a recommendation to the Finance Committee, which may in its sole discretion approve or deny the loan request.

(5) If a loan request is approved, the Department shall prepare the documents necessary to close the loan transaction. Such documents shall reflect all terms and conditions upon which the Finance Committee or the Director may have conditioned approval of the loan. Any material modifications of those terms and conditions must be approved by the Chair of the Finance Committee or his/her designee, or the Director for loans of $250,000 or less.

Stat. Auth.: ORS 285A.075
Stats. Implemented: ORS 285B.053 & 285B.092
Hist.: EDD 2-1983(Temp), f. & ef. 5-25-83; EDD 1-1984, f. & ef. 1-5-84; EDD 10-1988, f. & cert. ef. 3-18-88; EDD 37-1988, f. & cert. ef. 12-15-87; EDD 11-1999, f. & cert. ef. 10-11-99; EDD 6-2001, f. & cert. ef. 10-9-01; EDD 5-2005, f. & cert. ef. 5-11-05; EDD 6-2007(Temp), f & cert. ef. 8-29-07 thru 2-23-08; EDD 3-2008(Temp), f. & cert. ef. 2-26-08 thru 8-1-08; EDD 21-2008, f. 7-31-08, cert. ef. 8-1-08; EDD 22-2009, f. 11-30-09, cert. ef. 12-1-09; OBDD 9-2010(Temp), f. & cert. ef. 4-12-10 thru 10-9-10; OBDD 20-2010(Temp), f. & cert. ef. 5-28-10 thru 10-9-10; OBDD 33-2010, f. & cert. ef. 10-1-10

123-017-0030

Loan Conditions

(1) The Director (for loan requests of $250,000 or less) or the Finance Committee may approve a loan request if it finds that:

(a) Fund participation in any financing shall not exceed 40 percent of the total amount of the eligible project costs, except that Fund financing may be up to 50 percent when an application is submitted through a Financial institution or Fund financing may exceed 40 percent when two or more Financial Institutions have denied financing as outlined in OAR 123-017-0015(10).

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

(c) The applicant can provide good and sufficient collateral for the loan, as determined by the Commission. The Commission's security interest may be subordinated to the security interest of other lenders participating in the project. The security interest of loans from the Oregon Targeted Development Account will not be subordinated to the security interest of other lenders, unless the Finance Committee or the Director finds there is an abundance of collateral and/or company or guarantor financial strength. The Business Development Commission may make loans in distressed areas, as defined by the Department, without regard to the requirements for security and collateral under ORS 285B.059 and 285B.062 that are otherwise applicable. Collateral value of out-of-state real property will be significantly discounted from nominal assessed or appraised value.

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

(e) There is a need for the proposed business development project.

(f) The applicant's financial resources are adequate to ensure success of the project.

(g) The applicant has not received or entered into a contract or contracts exceeding $700,000 with the Commission, under authority of ORS 285B.050–285B.098, for the previous 365 days.

(2) The Finance Committee may, in its sole discretion, permit the assumption of an outstanding Oregon Business Development Fund Loan, if the assuming obligor satisfies the Finance Committee or the Director as to its willingness and ability to perform all obligations of the original borrower related to the loan, including but not limited to the obligation to repay the loan in accordance with its terms, and if the State's collateral position is not diminished. Oregon Business Development Fund loans are not, however, necessarily or automatically assumable. A complete application, application fee and supporting documentation are required to initiate review of the request.

(3) The applicant agrees to abide by all laws and regulations applicable to the applicant's project.

Stat. Auth.: ORS 285A.075
Stats. Implemented: ORS 285B.059 & 285B.092
Hist.: EDD 2-1983(Temp), f. & ef. 5-25-83; EDD 1-1984, f. & ef. 1-5-84; EDD 10-1988, f. & cert. ef. 3-18-88; EDD 37-1988, f. & cert. ef. 12-15-88; EDD 9-1989(Temp), f. & cert. ef. 11-3-89; EDD 5-1990, f. & cert. ef. 3-5-90; EDD 8-1996(Temp), f. & cert. ef. 8-13-96; EDD 4-1997, f. & cert. ef. 3-25-97; EDD 9-1997(Temp), f. & cert. ef. 10-7-97; EDD 8-1998, f. & cert. ef. 5-22-98; EDD 11-1999, f. & cert. ef. 10-11-99; EDD 6-2001, f. & cert. ef. 10-9-01; EDD 5-2005, f. & cert. ef. 5-11-05; EDD 6-2007(Temp), f & cert. ef. 8-29-07 thru 2-23-08; EDD 3-2008(Temp), f. & cert. ef. 2-26-08 thru 8-1-08; EDD 21-2008, f. 7-31-08, cert. ef. 8-1-08; EDD 22-2009, f. 11-30-09, cert. ef. 12-1-09; OBDD 9-2010(Temp), f. & cert. ef. 4-12-10 thru 10-9-10; OBDD 20-2010(Temp), f. & cert. ef. 5-28-10 thru 10-9-10; OBDD 33-2010, f. & cert. ef. 10-1-10

123-017-0035

Loan Agreement

If the Finance Committee approves the business development project, the Finance Committee or the Director, on behalf of the state, and the borrower may enter into a loan contract of not more than $700,000, secured by good and sufficient collateral (except as noted in OAR 123-017-0030(1)(c), as determined by the Finance Committee, that shall set forth, among other matters:

(1) A plan for repayment by the borrower to the Oregon Business Development Fund moneys borrowed from the Fund used for the business development project with interest charged on those moneys at the fixed rate of one percentage point more than the prevailing interest rate on United States Treasury bills, notes or bonds of a comparable maturity. Loans made from the Oregon Targeted Development Account shall be made at a fixed interest rate of four percentage points less than the prevailing prime rate. Loans made under the conditions of OAR 123-0017-0015(10) shall be made at a fixed interest rate of not less than five percentage points over the prevailing prime rate. The rate shall not be less than four percent. For the purposes of this section, the prevailing interest rate shall be the weekly average interest rate as set forth in the most recent Federal Reserve Statistical Release H.15(519) that the Department has received at the time the loan is approved. The repayment plan, among other matters:

(a) Shall provide for commencement of repayment by the applicant of moneys used for the business development project and interest thereon no later than one year after the date of the loan contract or at such other time as the Finance Committee may provide;

(b) May provide for reasonable extension of the time for making any repayment in emergency or hardship circumstances if approved by the Finance Committee or the Director;

(c) Shall provide for such evidence of debt assurance of, and security for, repayment of the loan as is considered necessary by the Finance Committee;

(d) Shall set forth a schedule of payments and the period of loan which shall not exceed the usable life of the contracted project or 25 years from the date of the contract, whichever is less. The term of the Fund loan will normally be matched to, and not exceed twice that of the commercial or private lender participating in the project. Loans from the Oregon Targeted Development Account shall be for a maximum term of 5 years, with a maximum amortization of 15 years. The term of the loan from the Oregon Targeted Development Account may be extended by the Finance Committee, with any additional terms and conditions, including interest rate, that it may determine. The payment schedule shall include repayment of interest that accrues during any period of delay in repayment authorized by subsection (a) of this section, and the payment schedule may require payments of varying amounts for collection of accrued interest. Loans made under the terms of OAR 123-017-0015(10) shall be for a maximum term of 5 years, with a maximum amortization of 20 years. The term of loans made as a result of OAR 123-017-0015(10) may be extended by the Finance Committee, with any additional terms and conditions, including interest rate, that it may determine.

(e) Shall set forth a procedure for formal declaration of delinquency or default of payment by the Department. Loans shall be declared delinquent when any payment is more than ten days late. Borrower shall be notified in writing of declaration of delinquency, and shall have 31 days from the original payment date to bring the loan current. If the loan is not brought current, or arrangements satisfactory to the Department for bringing the loan current have not been made, the Department may declare the loan in default, declare the entire outstanding indebtedness to be forthwith due and payable and assign the loan to the Attorney General for collection;

(f) May allow for other forms of payment on loans other than scheduled principal and interest payments, as determined by the Finance Committee, or Director in the case of loans of $250,000 or less.

(2) Provisions satisfactory to the Department for field engineering and inspection, the Department to be the final judge of completion of the contract.

(3) That the liability of the state under the contract is contingent upon the availability of moneys in the Oregon Business Development Fund for use in the business development project.

(4) Such further provisions as the Finance Committee considers necessary to ensure expenditure of the funds for the purposes set forth in the approved application.

(5) That the borrower is responsible for payment of:

(a) All of the expenses of the operation and maintenance of the project, including adequate insurance;

(b) All taxes and special assessments levied with respect to the leased premises and payable during the term of the lease;

(c) Insurance premiums and providing insurance in amount and coverage acceptable to the Finance Committee. Such insurance shall include but shall not be limited to: fire and hazard insurance, liability insurance and flood insurance (if applicable); and

(d) Out-of-pocket costs associated with the loan closing which may include but are not limited to filing and recording fees, title insurance and appraisals, and attorney fees.

(6) That the borrower will provide to the Department on an annual basis, within 120 days of the end of its fiscal year, the same type of financial statements as required by the participating bank. The Finance Committee or the Department may require additional financial information.

(7) The Finance Committee, or Director for loans under $250,000, may require an assignment of life insurance on active principals in borrower.

(8) The Department, at its sole discretion, may require the execution of a Commitment Letter and receipt of a non-refundable Commitment Fee to secure resources necessary to fund the loan. The Commitment Fee will be applied at closing to the loan fee. If the loan does not close, the Commitment Fee will not be refunded.

(9) In the case of loans of more than $100,000 that are funded by proceeds from the Oregon Lottery, that the borrower shall make a good faith effort to hire and retain low-income individuals who have received job training assistance from publicly funded job training providers and enter into a first-source hiring agreement with a publicly funded job training provider.

(10) If the loan will result in the construction, expansion, rehabilitation or remodeling of a facility to which the public has access, adequate access for handicapped persons must be provided. This provision applies only to firms that deal directly with the general public in the normal and usual course of their business, and to facilities in which business is customarily transacted by and with members of the general public.

(11) If a project involves building construction, expansion, rehabilitation or modification, a loan from the fund shall be permanent and not interim financing.

Stat. Auth.: ORS 285A.075
Stats. Implemented: ORS 285B.062 & 285B.092
Hist.: EDD 2-1983(Temp), f. & ef. 5-25-83; EDD 1-1984, f. & ef. 1-5-84; EDD 10-1988, f. & cert. ef. 3-18-88; EDD 37-1988, f. & cert. ef. 12-15-88; EDD 9-1989(Temp), f. & cert. ef. 11-3-89; EDD 5-1990, f. & cert. ef. 3-5-90; EDD 25-1990 (Temp), f. & cert. ef. 9-13-90; EDD 29-1990, f. & cert. ef. 12-12-90; EDD 8-1996(Temp), f. & cert. ef. 8-13-96; EDD 4-1997, f. & cert. ef. 3-25-97; EDD 9-1997(Temp), f. & cert. ef. 10-7-97; EDD 8-1998, f. & cert. ef. 5-22-98; EDD 11-1999, f. & cert. ef. 10-11-99; EDD 6-2001, f. & cert. ef. 10-9-01; EDD 5-2005, f. & cert. ef. 5-11-05; EDD 6-2007(Temp), f & cert. ef. 8-29-07 thru 2-23-08; EDD 3-2008(Temp), f. & cert. ef. 2-26-08 thru 8-1-08; EDD 21-2008, f. 7-31-08, cert. ef. 8-1-08; EDD 22-2009, f. 11-30-09, cert. ef. 12-1-09; OBDD 9-2010(Temp), f. & cert. ef. 4-12-10 thru 10-9-10; OBDD 20-2010(Temp), f. & cert. ef. 5-28-10 thru 10-9-10; OBDD 33-2010, f. & cert. ef. 10-1-10

123-017-0037

Appeals, Servicing, Amendments, Assumptions and Modifications

(1) If the Director denies a loan request, the applicant may appeal the Director's decision to the Finance Committee. The Finance Committee may:

(a) Affirm the Director's denial; or

(b) Decide to consider the loan request itself.

(2) If the Finance Committee denies a loan request, the applicant has the right to appeal to the Finance Committee for a rehearing of its application.

(3) An applicant has the right to appear in person at the appeal hearing, and to introduce whatever books, documents and data it regards as necessary to support the appeal.

(4) An applicant whose appeal of the Director's or the Finance Committee's decision has been denied by the Finance Committee must submit a new application, including a new application fee, to be eligible for further consideration of a new loan request.

(5) All loans shall be monitored by, and all loan repayments shall be made to, the Department.

(6) It is the responsibility of the Borrower to ensure that the Department receives its payment by the due date.

(7) Any request for modification or amendment to any loan condition shall be made in writing to the Department and approved by the Finance Committee or Director. However, in those cases where a requested amendment or modification will not have a serious adverse effect on the State's security position, the Chairperson or his/her designee from the Finance Committee or the Director may approve such requested amendment or modification.

(8) If the Director, the Finance Committee, its Chairperson or designee, consents to any requested modification, assumption or amendment, the Borrower shall be responsible for all costs, including filing fees, of modifying or amending of any loan documents, filings, recordings or financing statements.

Stat. Auth.: ORS 285A.075
Stats. Implemented: ORS 285B.059, 285B.062 & 285B.092
Hist.: EDD 10-1988, f. & cert. ef. 3-18-88; EDD 37-1988, f. & cert. ef. 12-15-88; EDD 11-1999, f. & cert. ef. 10-11-99; EDD 6-2001, f. & cert. ef. 10-9-01; EDD 5-2005, f. & cert. ef. 5-11-05; EDD 22-2009, f. 11-30-09, cert. ef. 12-1-09

123-017-0055

Fees and Charges

(1) The Department shall charge and collect a loan fee of $200 at the time the application is filed.

(2) In addition, the applicant, immediately upon receiving the loan proceeds, shall pay to the Department one and one-half percent of the principal amount of the loan.

(3) The Department may charge and collect a Commitment Fee, payable to the Department, in an amount up to three quarters of one percent of the principal amount of the loan to be applied to the fee specified in section (2) of this rule at closing of the loan. If the loan does not close, the Commitment Fee will not be refunded.

(4) The Department may charge and collect an Assumption Fee, payable to the Department, in an amount up to one half of one percent of the remaining principal balance of the loan. The individual or entity assuming the obligation will also be responsible for closing costs associated with the transfer of debt including but not limited to document preparation, review of documentation for legal sufficiency, title, escrow, recording or filing fees.

(5) The Department may charge and collect a Loan Modification Fee, payable to the Department, of $50 at the time of the modification request. A loan modification may include, but, is not limited to, modification to terms of repayment, subordination requests or collateral swaps. The individual or entity requesting the modification will also be responsible for costs associated with the modification including, but, not limited to, document preparation, review of documentation for legal sufficiency, title, escrow, recording or filing fees.

(6) Monies referred to in (1), (2), (3), (4) and (5) of this section shall be paid into the Fund.

(7) The Department may, in its sole discretion, use some or all of the money collected under section (2) of this rule, plus a maximum of an additional one and one-half percent as payment to a local development group, county or municipality for packaging the loan, processing applications, investigating proposed business development projects and servicing outstanding loans. The additional amount of up to one and one-half percent may be paid for projects which are located in an enterprise zone or in a distressed area or for which the OBDF loan being sought is not more than $100,000. In no case shall the Department make any payment of more than $10,000 for any one project. In no case shall the Department make any payment to any third party until the loan has been closed and the Department has collected the fee specified in section (2) of this rule.

Stat. Auth.: ORS 285A.075
Stats. Implemented: ORS 285B.056, 285B.068 & 285B.092
Hist.: EDD 2-1983(Temp), f. & ef. 5-25-83; EDD 1-1984, f. & ef. 1-5-84; EDD 10-1988, f. & cert. ef. 3-13-88; EDD 37-1988, f. & cert. ef. 12-15-88; EDD 5-1990, f. & cert. ef. 3-5-90; EDD 11-1999, f. & cert. ef. 10-11-99; EDD 6-2001, f. & cert. ef. 10-9-01; EDD 6-2007(Temp), f & cert. ef. 8-29-07 thru 2-23-08; EDD 3-2008(Temp), f. & cert. ef. 2-26-08 thru 8-1-08; EDD 21-2008, f. 7-31-08, cert. ef. 8-1-08; EDD 22-2009, f. 11-30-09, cert. ef. 12-1-09; OBDD 20-2010(Temp), f. & cert. ef. 5-28-10 thru 10-9-10; OBDD 33-2010, f. & cert. ef. 10-1-10

123-017-0060

Building Opportunities for Oregon Small Business Today Program

The purpose of these rules is to provide procedures, standards and criteria for the making of loans and grants from the Building Opportunities for Oregon Small Business Today (BOOST) Account which is established within the Oregon Business Development Fund. Definitions: For the purpose of rules 123-017-0060 through 123-017-0080, the following terms shall have the following meanings:

(1) “Applicant” means any individual, association of individuals, joint venture, partnership, limited liability company or corporation applying for a loan or a grant from the BOOST Account.

(2) “Comparable Wages” means the average wage per full-time equivalent job provided by the Applicant is at least 85% of the Average Pay for Applicant’s NAICS for the County or Counties in which the Applicant has employees, as shown in the most recent Covered Employment and Wages Summary Report from the Oregon Employment Department. The average wage per full-time equivalent job of the Applicant shall be calculated according to the following formula using information obtained by the Department from the Oregon Employment Department or other information determined by Department to be comparable:

(a) A = W / H:

(b) A = Represents the Applicant’s average wage per full-time equivalent job;

(d) H = Represents the total hours worked by Applicant’s employees during the same one-year period divided by 1820.

(3) “Health benefit plan” has the meaning as defined in ORS 743.730.

(4) “Full-time Job” means a job which has no foreseeable ending date and is filled by an employee who works a minimum of 35 hours per week or a minimum of 25 hours per week with health benefit plan coverage.

(5) “Employee” is a person:

(a) Paid through the Applicant’s normal payroll system;

(b) For whom FICA and state and federal income taxes are deducted from his or her gross wages, which are then forwarded to the appropriate agencies by the Applicant on behalf of the person;

(d) For whom the Applicant contributes to FICA tax;

(e) Not hired through a temporary agency; and

(f) Not acting as an independent contractor.

Stat. Auth.: ORS 285A.075
Stats. Implemented: ORS 285B.050 - 285B.098
Hist. : OBDD 20-2010(Temp), f. & cert. ef. 5-28-10 thru 10-9-10; OBDD 33-2010, f. & cert. ef. 10-1-10

123-017-0070

Building Opportunities for Oregon Small Business Today Loan Program

(1) In order to approve a loan from the BOOST Account, the Department must first find that the Applicant:

(a) Is a traded sector business that meets the requirements set forth in ORS 285.055;

(b) Is legally organized and authorized to conduct business in Oregon;

(A) The average number of workers reported on the most recent Form OQ filed by the Applicant with and as required by the Oregon Employment Department; or,

(B) Other documentation determined to be acceptable by Department.

(d) Demonstrates a reasonable capacity to create or retain Full-time Jobs in Oregon;

(e) Provides Comparable Wages to its employees;

(f) Demonstrates a reasonable prospect of repayment of the loan from the BOOST Account;

(g) Can provide good and sufficient collateral for the loan;

(h) Has a ratio of at least one projected Full-time Job created or retained per $50,000 sought to be borrowed from the BOOST Account;

(i) Has submitted an application on a form approved by the Department together with the application fee of $200;

(j) Meets the loan condition requirements in OAR 123-017-0030 except (1)(a) and (d); and,

(k) Demonstrates a need for the loan.

(2) In order to approve a loan from the BOOST Account, the Department must first determine:

(a) Money is or will be available in the BOOST Account to fund the loan;

(b) The loan amount does not exceed $150,000;

(c) The interest rate on the loan is a fixed rate of not less than the prevailing prime rate plus an annual percentage rate of 5%;

(d) The loan term will not exceed four years;

(e) The loan amortization will not exceed four years; and

(f) The purpose of the BOOST loan is not for the purchase of real estate.

(3) The Department shall give preference to an Applicant that proposes to create Full-time Jobs.

(4) After approval of a loan from the BOOST Account, the Department will enter into a loan contract with the Applicant. At a minimum, the loan contract shall:

(a) Set forth the terms as outlined in OAR 123-017-0035(1)(a), (e), and (f);

(b) Set forth the terms as outlined in OAR 123-017-0035(2), (5), (7), (8), (9), (10), and (11);

(c) Provide for such evidence of debt assurance of, and security for, repayment of the loan as considered necessary by the Finance Committee or the Director;

(d) Set forth a schedule of payments and the period of loan which shall not exceed the usable life of the asset(s) securing the loan or 4 years from the date of the contract, whichever is less. The payment schedule shall include repayment of interest that accrues during any period of delay in prepayment authorized by OAR 123-017-0035(1)(a) and the payment schedule may require payments of varying amounts for collection of accrued interest;

(e) Set forth the liability of the Department under the contract to be contingent upon the availability of moneys in the BOOST Account;

(f) Set forth such further provision as the Finance Committee or the Director considers necessary to ensure expenditure of the funds for the purposes set forth in the approved application; and

(g) Requires the Applicant to provide financial statements to the Department, on an annual basis, within 120 days of the end of its fiscal year and any other additional financial information reasonably requested by Department.

(5) The Applicant will be subject to OAR 123-017-0055.

(6) The Applicant will be subject to OAR 123-017-0037 with the following exception:

(a) The BOOST loan and amortization shall not be extended beyond the terms described in the original loan agreement.

(7) The Director or the Director’s designee may, in his sole discretion, approve or deny the loan or forward the loan application to the Finance Committee for the Committee’s consideration.

(8) The Department may, in its sole discretion, use some or all of the money collected under section 123-017-0070(5) of this rule as payment to a local development group, county or municipality for packaging the BOOST loan, processing BOOST applications, and servicing outstanding BOOST loans.

(9) The Department will set aside 5% of the total capitalization provided to the BOOST Account to offset collection and administrative expenses of the loans made from the BOOST Account.

Stat. Auth.: ORS 285A.075
Stats. Implemented: ORS 285B.050 - 285B.098
Hist. : OBDD 20-2010(Temp), f. & cert. ef. 5-28-10 thru 10-9-10; OBDD 33-2010, f. & cert. ef. 10-1-10

123-017-0080

Building Opportunities for Oregon Small Business Today Grant Program

(1) In order to approve a grant from the BOOST Account, the Department must first determine that the Applicant:

(a) Is a traded sector business that meets the requirements set forth in ORS 285A.055;

(b) Is legally organized and authorized to conduct business in Oregon;

(A) The average number of workers reported on the most recent Form OQ filed by the Applicant with and as required by the Oregon Employment Department; or

(B) Other documentation determined to be acceptable by the Department.

(d) Has established goals to create Full-time Jobs in Oregon within 90 days after approval of the grant;

(e) Demonstrates a reasonable capacity of achieving its goals to create Full-time Jobs in Oregon within 90 days after approval of the grant;

(f) Provides Comparable Wages to its employees; and

(g) Has paid the $50 non-refundable application fee to the Department.

(2) In order to approve a grant from the BOOST Account, the Department must first determine that funds are or will be available in the BOOST Account to fund the grant.

(3) After approval of a grant, the Department will enter into a grant agreement with the Applicant. Among other items, the grant agreement will contain the following provisions:

(a) Grant funds will be disbursed to the Applicant upon receipt of the report described in (3)(b) and a determination by the Department, in the reasonable exercise of its administrative discretion that the Department has sufficient funds in and expenditure authorization for the BOOST Account, to make the disbursement.

(b) No later than 10 months after the date the grant was approved by the Department, the Applicant shall submit a report to the Department for each new employee who:

(A) Was not an employee of the Applicant within the nine months prior to the current date of hire;

(B) Was unemployed for at least the 60 days prior to the date of hire by the Applicant, or is a veteran under the meaning given that term in ORS 408.225;

(D) Has signed an affidavit that he or she was unemployed for at least the 60 days prior to the date of hire by the Applicant, or has signed an affidavit that he or she is a veteran under the meaning given that term in ORS 408.225;

(4) Worked at least:

(a) 35 hours in each of the 26 consecutive weeks since hired by the Applicant; or

(b) 25 hours in each of the consecutive 26 weeks since hired by the Applicant when the Applicant provides a Health Benefit Plan.

(c) The report submitted to the Department will include the following information for each employee who meets the criteria described in (3)(b):

(A) Legal Name;

(B) Social Security Number;

(D) Date of departure from the applicant if applicable

(E) Number of hours worked in each of the 26 consecutive weeks beginning the week the employee was hired by the Applicant.

(5) The amount of the grant to be disbursed to the Applicant shall be the minimum of:

(a) $50,000 in a calendar year;

(b) The grant amount approved;

(d) The next increase in employment as demonstrated by the formula G = ( A1-A2 ) * $2,500, where:

(A) G = the amount of the grant to be disbursed;

(B) A1 = the average number of workers reported on the most recent Form OQ filed by the Applicant with and as required by the Oregon Employment Department or as demonstrated by other documentation determined to be acceptable by Department; and,

(6) The net increase in eligible employees as demonstrated by the formula G = [P – (P – A)] * $2,500 where:

(a) G = the amount of the grant to be disbursed;

(b) P = the number of projected Full-time Jobs submitted by the Application in the grant application;

(7) The total amount of BOOST grants awarded and made shall not exceed 20% of the total capitalization provided to the BOOST Account from the Tax Enforcement Account.

(8) Applications for a grant from the BOOST Account will be processed on a first come, first served basis. If the Department determines an application for a grant from the BOOST Account is incomplete, the Department shall notify the Applicant in writing of the additional information needed and any deficiencies in the application. The Applicant must submit the information necessary for the Department to determine that the application is complete within thirty days after the date of notification or the application will no longer be considered for a grant award.

(9) Applications for a grant from the BOOST Account may be submitted by an Applicant to the Department at any time until 5:00 P.M. on June 30, 2012.

Stat. Auth.: ORS 285A.075
Stats. Implemented: ORS 285B.050 - 285B.098, 408.225
Hist. : OBDD 20-2010(Temp), f. & cert. ef. 5-28-10 thru 10-9-10; OBDD 33-2010, f. & cert. ef. 10-1-10; OBDD 1-2012(Temp), f. & cert. ef. 2-23-12 thru 8-20-12; Administrative correction 9-20-12; OBDD 17-2012, f. 10-31-12, cert. ef. 11-1-12

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