State Treasurer guarantees loans for certain rural hospitals

The State Treasurer must guarantee eligible stabilization loans for qualifying rural hospitals. The hospital must have a publicly elected board and receive Medicare payments based on diagnostic-related groups. The loan may cover cash shortages or refinance existing debt, but not service, facility or operating expansion or capital improvements. The loan must be fully amortized, mature within 20 years, come from one lender or loan group, and be secured by a first-position lien on substantially all real property and major equipment. The hospital and lender must make commercially reasonable efforts to repay the debt before seeking the guarantee, without foreclosing on the pledged property or equipment. The hospital must give annual reports on the balance, repayment status and financial condition, and must promptly report payoff, servicing transfers, defaults and loan changes. The State Treasurer must guarantee an eligible loan on or before April 1, 2027. The guarantee ends 30 days after maturity, when replaced by a new loan, or when fully repaid, whichever comes first.

The State Treasurer may spend up to $44 million from the Unclaimed Property and Estates Fund to meet payment duties under a covered loan guarantee. The money may be used only for contractual obligations on a guarantee issued for an eligible rural hospital loan under this measure. Guarantee payments may come only from the Unclaimed Property and Estates Fund and do not become a debt or obligation of Oregon. This spending authority does not operate unless a qualifying loan is guaranteed by April 1, 2027. The spending authority is triggered by a guarantee issued on or before April 1, 2027, and is repealed on January 2, 2048.