Chapter 98 Oregon Laws 2001

AN ACT

SB 387

Relating to bonds issued on behalf of Department of Veterans' Affairs; amending ORS 407.085, 407.385, 407.415, 407.425 and 407.515; and declaring an emergency.

Be It Enacted by the People of the State of Oregon:

SECTION 1. ORS 407.385 is amended to read:

407.385. (1) Money received as a loan under this chapter shall be used only for the acquisition of a home or farm.

(2) Except as provided in this section, use of all or any part of a loan received under this chapter for investment or any purpose other than the acquisition of a home or farm constitutes an act of default and results in immediate acceleration of the unpaid balance of the loan.

(3) When the Director of Veterans' Affairs determines that a borrower is using loan moneys in violation of this section, the director shall immediately commence any action or proceeding necessary to recover for the state those moneys or any property obtained therewith.

(4) A failure by a borrower to move into the home or farm securing the borrower's loan and to use it as the borrower's principal residence within 60 days after the loan or assumption is made, or within such extension as may be granted in writing by the director, shall be conclusively presumed to constitute a violation of this section. A request for an extension for good cause shall be made in writing within the 60-day period. The applicant may file a written request for a hearing within 30 days after a denial of the request for extension.

(5) The director shall not approve any rental or lease of a home or farm that affects the federally tax exempt status of bonds issued under Article XI-A of the Oregon Constitution. When the rental or lease does not affect the federally tax exempt status of such federally tax exempt bonds, the director may approve in writing the rental or lease of a home or farm after the home or farm is used as the principal residence of the borrower. The director may establish factors to consider when determining whether to approve the rental of a home or farm.

SECTION 2. ORS 407.415 is amended to read:

407.415. In order to provide funds for the purposes specified in Article XI-A of the Oregon Constitution, bonds may be issued in accordance with the provisions of ORS 286.031 to 286.061. Bonds issued under this section may be issued on a federally tax exempt or taxable basis. Bonds issued on a federally tax exempt basis may be issued under any applicable provisions of the Internal Revenue Code as may be determined by the Director of Veterans' Affairs. The director shall enter into such covenants and agreements with bondholders as may be necessary or appropriate to maintain the federally tax exempt status of interest on bonds issued on a federally tax exempt basis.

SECTION 3. ORS 407.425 is amended to read:

407.425. In issuing bonds under ORS 407.415, the State Treasurer may structure an issue of bonds with regard to amounts, maturity dates, interest rates and such other terms and conditions of the bonds. In order to meet the specific requirements of a selected group of applicants for loans under this chapter and before asking the State Treasurer to structure an issue of bonds under this authority, the Director of Veterans' Affairs [must] may consider factors including, but not limited to, the number of applications and loans on hand, the amount of debt that [which] will be [funded by the issue] financed or refinanced by the issue, directly or indirectly, the solvency of the program as a whole, the current value of money, the condition of the tax exempt and taxable bond [market] markets and the effect of the issue on all veterans.

SECTION 4. ORS 407.515 is amended to read:

407.515. (1) The Oregon War Veterans' Bond Sinking Account is created as a restricted account within the Oregon War Veterans' Fund. The sinking account shall consist of all moneys received as payments on principal and interest of loans made under ORS 407.125; all moneys received as accrued interest upon bonds sold; all moneys derived from tax levies provided for in ORS 291.445; all moneys derived from the sale, rental or administration of property acquired by foreclosure or other proceeding, or deed; all moneys received as interest upon investments of the account and the Oregon War Veterans' Fund; all moneys received as proceeds from the sale of refunding bonds; and all other moneys accruing under ORS 407.115, 407.125, 407.165, 407.205, 407.275, 407.415, 407.495 and 407.515 not required to be credited to the Oregon War Veterans' Fund.

(2) Disbursements from the sinking account shall be made upon submission of duly verified claims, approved by the Director of Veterans' Affairs, to the Secretary of State, who shall audit the same in the manner that other claims against the state are audited. The moneys in the sinking account, other than those derived from tax levies and from sales of refunding bonds, hereby are continuously appropriated for payment of expenses of administration of ORS 407.115, 407.125, 407.165, 407.205, 407.275, 407.415, 407.495 and 407.515 to 407.565. The moneys in the sinking account may be invested as provided in ORS 293.701 to 293.820.

(3) Amounts in the sinking account shall be held and set aside separately from the amounts in the Oregon War Veterans' Fund and any other funds or assets of this state, but such account may be accounted for as part of the Oregon War Veterans' Fund.

(4) The debt service reserve account within the sinking account shall be maintained as a subaccount within the sinking account dedicated to provide funds for the payment of bonds issued under authority of Article XI-A of the Oregon Constitution.

(5) Nothing in this section shall be construed so as to impair any covenant or agreement with the holders of such bonds heretofore entered into by the director on behalf of this state with respect to the maintenance of the sinking account as heretofore constituted and any such covenant and agreement shall remain in full force and effect.

(6) The director may create subaccounts in the sinking account necessary for appropriate administration of the director's duties including, but not limited to, providing for the issuance, security, payment or administration of bonds or to preserve the federally tax exempt status of bonds issued on a federally tax exempt basis. The director may segregate such subaccounts from other subaccounts used for other purposes including, but not limited to, the issuance, security, payment or administration of bonds or other obligations, whether previously or subsequently issued.

SECTION 5. ORS 407.085 is amended to read:

407.085. (1) As used in [section 1,] Article XI-A, Oregon Constitution, and [in] this chapter, for the purposes of administration[,]:

(a) “Acquisition” means:

[(a)] (A) Purchase and improvement of a home or farm.

[(b)] (B) Payment of the balance of the purchase price and interest on a purchase contract, and the improvement of property thereby acquired.

[(c)] (C) [Refinancing] Refinance of an existing purchase-money mortgage or mortgage in the nature thereof, and the improvement of property thereby purchased.

[(d)] (D) Improvement of a home or farm.

[(2) As used in Article XI-A, Oregon Constitution, and in ORS 407.165, 407.415, 407.495 and 407.515 to 407.565, “bond” includes, but is not limited to, serial bonds, term bonds, notes and other evidence of indebtedness.]

(b) “Bonds” includes, but is not limited to, serial bonds, term bonds, notes, obligations, lines of credit, revolving credit agreements, loans, financing agreements or other evidence of indebtedness determined by the Director of Veterans' Affairs, with the approval of the State Treasurer, to be necessary or desirable to provide funds for the purposes expressed in Article XI-A of the Oregon Constitution.

[(3)] (2) As used in this chapter:

[(a) “Director” means Director of Veterans' Affairs.]

[(b)] (a) “Committee” means the Advisory Committee provided for by ORS 406.210.

(b) “Director” means the Director of Veterans' Affairs.

(c) “Home” means any residential-type structure, including outbuildings and the real property in connection with it, if any, including long-term leaseholds, which is established, maintained and used primarily as a principal residence by the veteran.

(d) “Improvement” means new construction or any necessary or beneficial additions, alterations or changes appurtenant to the home or farm which protect or improve the basic livability or energy efficiency of the premises.

(e) “Mobile home” means a structure, transportable in one or more sections, which is 10 feet or more in width, and contains more than 500 square feet of living space figured on exterior dimensions of the structure, exclusive of any hitch and is designed to be used as a dwelling by one family, and which remains as personal property under the laws of this state.

SECTION 6. This 2001 Act being necessary for the immediate preservation of the public peace, health and safety, an emergency is declared to exist, and this 2001 Act takes effect on its passage.

Approved by the Governor April 20, 2001

Filed in the office of Secretary of State April 20, 2001

Effective date April 20, 2001

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