Operation Of Oregon Business Development Fund

Link to law: http://arcweb.sos.state.or.us/pages/rules/oars_100/oar_123/123_017.html
Published: 2015

The Oregon Administrative Rules contain OARs filed through November 15, 2015

 

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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;
(c) Aquacultural development or seafood 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
(c) There is no resulting
loss of employment at the former site of the business.
(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 or referral
for financing is made to the Department by 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 50 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.
(11) Fund financing 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 the applicant is a county
or municipality, or if there are required forms of payments other than scheduled
principal and interest.
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; OBDD 6-2013, f.
& cert. ef. 7-1-13
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;
(c) Are located in rural or distressed areas of the state;
(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 $1,000,000 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; OBDD 6-2013, f.
& cert. ef. 7-1-13
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 $1,000,000,
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 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. 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, if
applicable. Loans from the Oregon Targeted Development Account shall be for a maximum
term of 5 years, with a maximum amortization of 15 years. 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.
(e) A request to renew any
loan from the Fund that has reached its scheduled maturity and has not been repaid
in full may be approved by the Finance Committee (or Director if the principal balance
does not exceed $250,000), with any additional terms and conditions, including interest
rate, that it may determine. A new application, including an application fee and
supporting documentation, are required to initiate review of the request.
(f) 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; The Finance Committee or the Director or
their designee is authorized to approve any modification of terms on a loan that
is delinquent or in default as deemed necessary or prudent to most likely effect
repayment of the loan to the Fund.
(g) May allow for 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; OBDD 6-2013, f.
& cert. ef. 7-1-13
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 contracted local development group for referring projects for financing, packaging
the loans, processing applications, investigating proposed business development
projects and servicing outstanding loans. 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; OBDD 6-2013,
f. & cert. ef. 7-1-13

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