2023 Oregon Revised Statutes › Volume : 07 - Public Facilities and Finance › Chapter 285B - Economic Development II › Section 285B.098 - Status of loan to county or municipality; project as security; repayment.

A loan made to a county or municipality under ORS 285B.050 to 285B.098 shall not be a general obligation of that county or municipality, nor a charge upon the tax revenues of that county or municipality, nor a charge upon any other revenues or property of that county or municipality not specifically pledged thereto. A loan made to a county or municipality under ORS 285B.050 to 285B.098 may be secured by the business development project for which the loan is made, as well as by any revenues derived from that project, and any nontax-derived revenues or property of the county or municipality not otherwise pledged or committed for other purposes. A county or municipality may repay any portion of a loan incurred under ORS 285B.050 to 285B.098 from any funds available to it. [Formerly 285.447]
Note:
Sections 1 to 7, chapter 25, Oregon Laws 2023, provide:
Sec. 1.
(1) As used in sections 1 to 6 of this 2023 Act:
(a) "Covered entity" has the meaning given that term by 15 U.S.C. 4651(2).
(b) "Covered incentive" has the meaning given that term by 15 U.S.C. 4651(3).
(c) "Federal semiconductor financial assistance" means assistance available under the program established pursuant to 15 U.S.C. 4652(a)(1) for financial assistance to the semiconductor industry.
(d) "Program grants and loans" means grants awarded and loans made under the program developed by the Oregon Business Development Department pursuant to this section.
(2)(a) The Oregon Business Development Department shall develop a program to award grants and make loans from moneys in the Oregon CHIPS Fund established under section 6 of this 2023 Act to businesses applying for federal semiconductor financial assistance.
(b)(A) The program shall be administered by the department and the Governor as set forth in this section.
(B) Notwithstanding the duties and powers conferred respectively on the department and the Governor under sections 1 to 6 of this 2023 Act, the department and the Governor may consult each other with respect to any duty or power so conferred.
(c) It is the intent of the Legislative Assembly that program grants and loans be treated by the United States Secretary of Commerce as covered incentives for purposes of the federal semiconductor financial assistance program.
(3)(a) Program grant and loan proceeds may be used solely for:
(A) If a business’s application for federal semiconductor financial assistance is approved, activities undertaken in connection with the federal semiconductor financial assistance program; and
(B) Regardless of whether a business’s application for federal semiconductor financial assistance is approved:
(i) The development of a site for a semiconductor or other advanced manufacturing facility, including, but not limited to, the acquisition and aggregation of land;
(ii) Research and development with respect to semiconductors or advanced manufacturing; or
(iii) Partnering with institutions of higher education, including, but not limited to, historically Black colleges and universities, career technical training institutions, regional collaborative groups, local workforce development boards as defined in ORS 660.300, programs funded through the federal Workforce Innovation and Opportunity Act (P.L. 113-128) and apprenticeship programs registered with the State Apprenticeship and Training Council for the purpose of workforce development and the creation of training, registered apprenticeship and internship opportunities, with respect to semiconductors or advanced manufacturing.
(b) Contractors and subcontractors on construction projects funded by program grant or loan proceeds must pay for such projects a rate of wage that meets or exceeds the greater of:
(A) The prevailing rate of wage for workers in each trade or occupation in each locality as determined by the Commissioner of the Bureau of Labor and Industries under ORS 279C.815; or
(B) The prevailing rate of wage as determined by the United States Secretary of Labor under the Davis-Bacon Act (40 U.S.C. 3141 et seq.).
(4)(a) A business that is a covered entity may apply to the department under section 2 of this 2023 Act for a program grant or loan.
(b)(A) Except as provided in subparagraph (B) of this paragraph, program grants and loans may not be awarded or made to any applicant in an amount greater than $50 million.
(B) The Governor may approve a program grant or loan under section 3 of this 2023 Act in an amount greater than $50 million only after having given the Legislative Assembly at least 30 calendar days’ notice of the amount of the program grant or loan the Governor intends to approve.
(c)(A) Program loans:
(i) May be made for a term not to exceed 10 years, as negotiated by the business and, in consultation with the Governor, the department; and
(ii) Except as provided in section 5 (3) of this 2023 Act, shall be made at a zero rate of interest.
(B) All amounts received by the department in repayment of a program loan shall be transferred to the Oregon CHIPS Fund established under section 6 of this 2023 Act.
(d) Proceeds from a program grant or loan may be distributed in a single payment or in multiple, conditional payments, as specified in the program grant or loan agreement.
(e)(A) Except as provided in paragraph (f) of this subsection, for every $1 million in program grant or loan proceeds received, the recipient business must, over the period of the grant or loan agreement, generate at least:
(i) If the term of the agreement is not more than five years, $1.25 million in state and local revenue; or
(ii) If the term of the agreement is more than five years, $1.5 million in state and local revenue.
(B) The department and the recipient business may specify in the program grant or loan agreement what the term "revenue" includes.
(f) In lieu of the requirement under paragraph (e) of this subsection, a recipient business may instead commit to the creation of new jobs in Oregon:
(A) At least 65 percent of which are permanent, full-time positions; and
(B) That pay on average at least the average median income for the region of this state in which the services will be performed.
(g)(A) In addition to program grants and loans, an application assistance grant, in an amount not to exceed $50,000, may be awarded to a business whose application is approved under section 3 of this 2023 Act, for the costs of preparing and submitting the business’s application for federal semiconductor financial assistance.
(B) Application assistance grants may be made from moneys in the fund or from any other source of funding available for such purpose to the department or the Governor. [2023 c.25 §1]
Sec. 1a.
(1) The Governor shall convene an advisory panel with the following membership:
(a) The Governor or the Governor’s designees;
(b) One or more representatives of the Oregon Business Development Department, appointed by the Governor; and
(c) No fewer than five individuals with expertise or experience in the semiconductor and advanced manufacturing industry, appointed by the Governor.
(2) The advisory panel shall assist the Governor and the department in:
(a) Establishing a statewide strategy to promote and expand Oregon’s semiconductor and advanced manufacturing industry and the supply chains associated with the industry;
(b) Establishing application requirements for the grant and loan program developed by the department under section 1 of this 2023 Act so that program grants and loans will advance the statewide strategy established under paragraph (a) of this subsection; and
(c) Determining the criteria for reviewing and scoring applications and weighting the preferences for approving applications and setting program grant and loan amounts under section 3 (2) of this 2023 Act.
(3) The advisory panel shall meet at least once before the department begins to develop the grant and loan program under section 1 (2) of this 2023 Act and once before the department begins to prescribe the application process for the grant and loan program under section 2 (1) of this 2023 Act. [2023 c.25 §1a]
Sec. 2.
(1)(a) The Oregon Business Development Department shall prescribe an application process, including forms and deadlines, by which businesses may apply under this section for program grants and loans.
(b) At a minimum, the application form must require the applicant business to:
(A) Establish its eligibility to be treated by the United States Secretary of Commerce as a covered entity;
(B) Include its statement of interest or draft application for federal semiconductor financial assistance;
(C) Explain how the applicant business plans to comply with all applicable federal employment, labor and environmental standards;
(D) Explain how the proposed activities of the applicant business will promote the expansion and long-term economic viability of the semiconductor industry in Oregon, including research and development, manufacturing and other critical links in the semiconductor supply chain;
(E) State the amount of program grant or loan proceeds sought under this section along with a detailed description of the proposed expenditure of the proceeds;
(F) If the application includes a request for an application assistance grant, state the amount of the application assistance grant sought and demonstrate the applicant business’s need for the application assistance grant;
(G) Explain how the applicant business will meet the requirements under section 1 (4)(e) or (f) of this 2023 Act, setting forth at a minimum such information as:
(i) For state and local revenue, the kinds, amounts and timing of the revenue to be generated; or
(ii) For job creation, such information as the number, job descriptions, weekly hours, pay scale and locations of the proposed jobs;
(H) Include any other information that the department or the Governor considers necessary or important for review of the application; and
(I) Sign the application through an authorized director, officer, employee or agent under penalties for false swearing.
(2)(a) Upon request, the department may consult with an applicant business about the business’s application, before or after submission.
(b) An applicant business may amend and resubmit its application at any time within the application period.
(3) Trade secrets, as defined in ORS 646.461, that are submitted to the department as part of an application under this section shall be exempt from disclosure under ORS 192.311 to 192.478 until January 1, 2027. [2023 c.25 §2]
Sec. 3.
(1)(a) The Oregon Business Development Department and the Governor shall review all timely and complete applications for program grants and loans, with such distribution of duties and powers as the department and the Governor may arrange.
(b) Within 90 days following receipt of an application, the department and the Governor shall:
(A) Approve the application;
(B) Approve the application for a program grant or loan, or application assistance grant, in an amount other than the amount requested; or
(C) Reject the entire application or only the request for an application assistance grant.
(c) For a program grant or loan in an amount greater than $50 million, the Governor shall provide notice to the Legislative Assembly in accordance with section 1 (4)(b)(B) of this 2023 Act.
(d) The decisions made with respect to an application are not subject to appeal.
(2) In approving applications and setting program grant and loan amounts, the department and the Governor shall give preference to:
(a) Projects that will promote the expansion and long-term economic viability of the semiconductor industry in Oregon, including research and development, manufacturing and other critical links in the semiconductor supply chain;
(b) Projects that will promote and extend Oregon’s leadership in the field of technology;
(c) Projects that will attract manufacturing jobs to Oregon;
(d) Projects that will secure supply in Oregon for critical sectors of the state economy;
(e) Projects that reflect an applicant business’s established relationship, or commitment to build a relationship, with organizations focused on developing a diverse workforce pipeline;
(f) Applicant businesses that have at least 10 full-time employees in Oregon;
(g) Applicant businesses that have formed partnerships for the purpose of workforce development or the creation of training, registered apprenticeship or internship opportunities;
(h)(A) Applicant businesses that commit to generating a greater amount of state and local revenue in accordance with section 1 (4)(e) of this 2023 Act; or
(B) Applicant businesses that commit to creating a higher percentage of new permanent full-time jobs in accordance with section 1 (4)(f) of this 2023 Act;
(i) Applications that propose projects described in 15 U.S.C. 4652(a)(2)(B)(i) that will incorporate significant participation by businesses owned by members of underrepresented communities and economically disadvantaged individuals; and
(j) Applications that, taken together, represent regional diversity in Oregon.
(3)(a) As soon as practicable after making decisions under subsection (1) of this section, the department shall:
(A) Notify the applicant business of the decision and the reasons for the decision; and
(B) For an approved application, offer to the applicant business a program grant or loan agreement and, if applicable, an application assistance grant.
(b) Upon entering into a program grant or loan agreement with the applicant business, the department shall distribute to the business from the Oregon CHIPS Fund established under section 6 of this 2023 Act the amount set forth in the agreement.
(4)(a) If a business that has entered into an agreement pursuant to this section changes ownership during the term of the agreement, the department and the Governor may allow the continued use of the program grant or loan proceeds provided the business enters into a new agreement with the department that commits the business to continuing the project as proposed in the application approved under this section.
(b) In the new agreement, the department may agree to minor changes in the terms of the original agreement that the department and the Governor considers reasonable in the circumstances and faithful to the purpose for which the business’s application was approved. [2023 c.25 §3]
Sec. 4.
(1) At least once every six months following the date on which a business enters into a program grant or loan agreement with the Oregon Business Development Department under section 3 of this 2023 Act, for as long as the agreement is in effect, the business shall report to the department the following:
(a) The status of the business’s application for federal semiconductor financial assistance;
(b) Progress on the project to construct, expand or modernize the facility for which the grant was awarded or the loan made, including, but not limited to, the acquisition or aggregation of land and the status of the permits required for the project;
(c)(A) State and local revenue generated in accordance with section 1 (4)(e) of this 2023 Act, setting forth at a minimum the kinds, amounts and timing of the revenue generated, as well as of any proposed revenue yet to be generated; or
(B) The number of jobs created in accordance with section 1 (4)(f) of this 2023 Act and the job descriptions, weekly hours, pay scale and locations of the jobs, as well as of jobs yet to be created;
(d) Any research and development work conducted with respect to semiconductors or advanced manufacturing;
(e) Any partnerships the business has engaged in with institutions of higher education or regional workforce programs for the purpose of workforce development and the creation of training, registered apprenticeship and internship opportunities;
(f) The status of any other consideration for which the business’s application was given preference under section 3 (2) of this 2023 Act;
(g) The economic impact of the project on businesses in this state, including, but not limited to, the impact on supply chains;
(h) The economic and environmental impact of the project on communities in this state; and
(i) Any other information required by the department or the Governor.
(2) Not later than March 15 and September 15 of each year in which any program grant or loan agreement remains in effect, the department shall submit to the Oregon Business Development Commission established under ORS 285A.040 a report summarizing the semiannual information received from businesses pursuant to subsection (1) of this section.
(3) Not later than September 15 of each year in which any program grant or loan agreement remains in effect, the department shall submit, in the manner required under ORS 192.245, a report summarizing the information received from businesses pursuant to subsection (1) of this section, to the interim committees of the Legislative Assembly related to economic development. [2023 c.25 §4]
Sec. 5.
(1)(a) A business that received a program grant or loan, including an application assistance grant, shall become liable for immediate repayment of the full amount of the grant or the outstanding principal amount of the loan, if:
(A) The business has not begun, on or before January 1, 2027, the process of applying for permits required for the project for which the grant was awarded or the loan made;
(B) The project changes substantially from the project for which the business’s application was approved such that the project would not have been eligible for the program grant or loan;
(C) On or before the earlier of a date, if any, specified in the program grant or loan agreement or January 1, 2033:
(i) The business has not generated state and local revenue in accordance with section 1 (4)(e) of this 2023 Act; or
(ii) The business has not created new permanent full-time jobs in accordance with section 1 (4)(f) of this 2023 Act;
(D) The business has not complied with all environmental standards applicable to the project under law or has not cured its noncompliance within a reasonable time, as determined by the Oregon Business Development Department or the Governor; or
(E) The business has not complied with all labor standards applicable to the project under law or the program grant or loan agreement or has not cured its noncompliance within a reasonable time, as determined by the department or the Governor.
(b) If a project is suspended for a reason beyond the control of the business, as determined by the department or the Governor, the amount to be repaid shall be in proportion to the percentage of the project that has not been completed at the time of suspension.
(2) Any and all amounts required to be repaid under this section shall be considered to be liquidated and delinquent, and the Oregon Business Development Department shall assign such amounts to the Department of Revenue for collection as provided in ORS 293.250.
(3) If the Oregon Business Development Department or the Governor discovers that a business willfully made a false statement or misrepresentation, or willfully failed to report a material fact, to obtain a program grant or loan, or an application assistance grant, under sections 1 to 6 of this 2023 Act, the Oregon Business Development Department may add to the amount the business is obligated to repay a penalty not to exceed 20 percent of the principal amount of the program grant or loan so obtained, plus any applicable interest and fees associated with the Department of Revenue’s costs of collection.
(4) Subject to ORS 293.250, all amounts repaid to the Oregon Business Development Department or the Department of Revenue under this section, including award amounts, penalties, interest, fees and any other charges, shall be transferred to the Oregon CHIPS Fund established under section 6 of this 2023 Act. [2023 c.25 §5]
Sec. 6.
(1) The Oregon CHIPS Fund is established in the State Treasury, separate and distinct from the General Fund. Interest earned by the Oregon CHIPS Fund shall be credited to the fund.
(2) Moneys in the fund shall consist of:
(a) Amounts appropriated or otherwise transferred or credited to the fund by the Legislative Assembly;
(b) Earnings received on moneys in the fund; and
(c) Other moneys, or proceeds of property, from any public or private source that are transferred, donated or otherwise credited to the fund.
(3) Moneys in the Oregon CHIPS Fund are continuously appropriated to the Oregon Business Development Department for the following purposes:
(a) Paying the actual costs incurred by the department in developing and administering sections 1 to 6 of this 2023 Act; and
(b) Carrying out the provisions of sections 1 to 6 of this 2023 Act.
(4) Moneys in the Oregon CHIPS Fund on June 30, 2023, shall be retained in the fund, and used for the purposes set forth in subsection (3) of this section, until June 30, 2025.
(5) Any moneys remaining in the Oregon CHIPS Fund on June 30, 2025, shall be transferred to the General Fund. [2023 c.25 §6]
Sec. 7.
Sections 1 to 6 of this 2023 Act are repealed on January 2, 2033. [2023 c.25 §7]