HB 2419 State loans to businesses

02/10/2023
VOTE: NO
Died in Committee
Status (overview) of bill: https://olis.oregonlegislature.gov/liz/2023R1/Measures/Overview/HB2419

This bill directs the State Treasurer to establish linked deposit program under which State Treasurer purchases investment instruments from qualified depository at below-market rates and qualified depository issues below-market rate loans to minority-owned businesses, woman-owned businesses or businesses that service-disabled veterans own.

Oregon may need to make risky loans to stimulate small businesses to replace those leaving the state or went bankrupt during covid. The closures weren’t discriminatory limited to underserved, and neither should the recover efforts.

The Treasurer is allowed to use 5% of the general fund to fund loans to individuals with an average gross revenue of less than $5 million over the prior three years. That ties up $1,472,040,000 in the General Fund for business loans that only brings in 200 basis points below market. At a time when the state is short on funds, is it fiduciarily responsible to limit what state dollars can earn? It states no other qualification than being underserved and not too rich.

Banks have below-market loans already, so if they don’t qualify for a bank loan, should the state be extending money to what is perceived as a risky loan when the state has forecasted inflation..

The legislature is also looking at HB 2802 to establish a task force for a state public bank.