Chapter 536 Oregon Laws 2001

AN ACT

HB 2121

Relating to bond administration; creating new provisions; amending ORS 285B.344, 285B.473, 285B.575, 286.036, 286.066, 286.071, 288.523, 289.200, 348.716 and 367.025; appropriating money; and declaring an emergency.

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

SECTION 1. ORS 285B.344 is amended to read:

285B.344. (1) If the State Treasurer determines that bonds should be issued:

(a) The State Treasurer may authorize and issue in the name of the State of Oregon bonds secured by revenues from eligible economic development projects or from other financing sources, and where applicable, secured as provided in ORS 285B.374 and 285B.377, to finance or refinance in whole or part the cost of acquisition, construction, reconstruction, improvement or extension of projects. The bonds shall be identified by project and issued in the manner prescribed by ORS 286.010, 286.020 and 286.105 to 286.135, and refunding bonds may be issued to refinance such bonds.

(b) The State Treasurer shall designate the underwriter, [trustee, bond counsel,] vendor, lender or other financing party, if any, and enter into appropriate agreements with each to carry out the provisions of ORS 285B.320 to 285B.377. The Economic and Community Development Department, with the approval of the State Treasurer, shall designate the trustee and enter into appropriate agreements with the trustee to carry out the provisions of ORS 285B.320 to 285B.377. The department may appoint bond counsel as authorized by ORS 288.523, or the State Treasurer may enter into an agreement with bond counsel if the services provided under the agreement comply with the provisions of ORS 288.523 and the appointment is approved by the Attorney General as required by ORS 288.523. The department may not make an appointment or enter into an agreement under this paragraph unless the State Treasurer has reviewed and approved the terms and conditions of the appointment or agreement. ORS 279.712 does not apply to any appointment or agreement described in this paragraph.

(2) Any escrow agent, bond registrar, paying agent or trustee, if any, designated by the State Treasurer to carry out all or part of the powers specified in ORS 285B.335 must agree to furnish financial statements and audit reports for each bond issue.

SECTION 2. ORS 285B.473 is amended to read:

285B.473. If the State Treasurer determines that revenue bonds should be issued:

(1) The State Treasurer may authorize and issue in the name of the State of Oregon revenue bonds secured by moneys paid to the Special Public Works Fund pledged therefor to finance or refinance in whole or part the cost of acquisition, construction, reconstruction, improvement or extension of infrastructure projects. The bonds shall be issued in the manner prescribed by ORS chapter 286, and refunding bonds may be issued to refinance such revenue bonds.

(2) The State Treasurer shall designate the underwriter[, trustee and bond counsel] and enter into appropriate agreements with [each] the underwriter to carry out the provisions of ORS 285B.467 to 285B.479. The Economic and Community Development Department, with the approval of the State Treasurer, shall designate the trustee and enter into appropriate agreements with the trustee to carry out the provisions of ORS 285B.467 to 285B.479. The department may appoint bond counsel as authorized by ORS 288.523, or the State Treasurer may enter into an agreement with bond counsel if the services provided under the agreement comply with the provisions of ORS 288.523 and the appointment is approved by the Attorney General as required by ORS 288.523. The department may not make an appointment or enter into an agreement under this subsection unless the State Treasurer has reviewed and approved the terms and conditions of the appointment or agreement. ORS 279.712 does not apply to any appointment or agreement described in this subsection.

SECTION 3. ORS 285B.575 is amended to read:

285B.575. If the State Treasurer determines that revenue bonds shall be issued:

(1) The State Treasurer may authorize and issue in the name of the State of Oregon revenue bonds secured by moneys paid to the Water Fund and pledged to finance or refinance in whole or in part the cost of a water project. The revenue bonds issued under this section shall be issued in the manner prescribed by ORS chapter 286, and refunding bonds may be issued to refinance the revenue bonds.

(2) The State Treasurer shall designate and enter into agreements with the underwriter[, trustee and bond counsel] to carry out the provisions of ORS 285B.560 to 285B.599. The Economic and Community Development Department, with the approval of the State Treasurer, shall designate the trustee and enter into appropriate agreements with the trustee to carry out the provisions of ORS 285B.560 to 285B.599. The department may appoint bond counsel as authorized by ORS 288.523, or the State Treasurer may enter into an agreement with bond counsel if the services provided under the agreement comply with the provisions of ORS 288.523 and the appointment is approved by the Attorney General as required by ORS 288.523. The department may not make an appointment or enter into an agreement under this subsection unless the State Treasurer has reviewed and approved the terms and conditions of the appointment or agreement. ORS 279.712 does not apply to any appointment or agreement described in this subsection.

SECTION 4. ORS 286.036 is amended to read:

286.036. (1) The state agency, with the approval of the State Treasurer, shall determine the maximum interest to be borne by the bonds, the interest basis and definition thereof. The maximum effective interest rate shall be certified to the State Treasurer as prudent in light of prevailing interest rates, market conditions and the projected program revenues, if any, and the State Treasurer must approve or disapprove.

(2) The state agency, with the approval of the State Treasurer, shall determine the period over which interest on bonds may be capitalized [for 18 months or the estimated period of construction, whichever is less]. The period may not be longer than the estimated period of construction.

(3) The interest upon all bonds, including refunding bonds, of the State of Oregon, shall be exempt from taxation by the State of Oregon.

(4) A state agency authorized to issue or cause to be issued any general obligation, revenue or industrial development bonds must apply for and receive approval of the State Treasurer prior to issuance of bonds. The approval must include approval of the preliminary official statement, if any, the specific amount of the bonds to be issued and the date of issuance. The State Treasurer may reduce the amount or alter the date of issuance, or both. ORS 286.056 and 286.061 (1) do not apply to revenue or industrial development bonds described in this section.

SECTION 5. ORS 286.066 is amended to read:

286.066. [With the approval of the State Treasurer,] Each respective general obligation bonding agency shall enter into an agreement with and provide for the appointment of bond counsel for a period of not less than one year during any biennium in which the agency has bonds outstanding or expects to issue bonds. An agency may not enter into an agreement for the appointment of bond counsel under this section unless the State Treasurer and the Attorney General have reviewed and approved the terms and conditions of the agreement as required by ORS 288.523. ORS 279.712 does not apply to an agreement for the appointment of bond counsel entered into under this section.

SECTION 6. ORS 286.071 is amended to read:

286.071. (1) The State Treasurer may, or an agency authorized to use bond proceeds may, with the approval of the State Treasurer, enter into an agreement with and retain the services of a financial consultant. The State Treasurer, in granting approval for the retention of a financial consultant authorized by this section, shall consider:

[(1)] (a) The reputation, experience and credentials of the consultant, including the individuals expected to actually fulfill the contract work; and

[(2)] (b) The willingness of the consultant to consider the impact of the agency’s bond program on overall state resources, levels of bonded indebtedness, and statewide bond issuance procedures and policies.

(2) An agency may not enter into an agreement to retain the services of a financial consultant unless the State Treasurer reviews and approves the terms and conditions of the agreement. ORS 279.712 does not apply to an agreement described in this section.

SECTION 7. ORS 288.523 is amended to read:

288.523. (1) Notwithstanding any other provision of law relating to the appointment of bond counsel, a public body may provide for the appointment of bond counsel to advise and assist the public body in the issuance of bonds or certificates of participation, including the issuance of refunding bonds and obligations, and in the lawful administration of outstanding bonds or certificates of participation. The services provided by an appointed bond counsel may include:

(a) Advising the public body concerning the legality of specific proposed taxable or tax-exempt obligations and the compliance, in substance and procedure, of those obligations with law, including but not limited to federal securities laws and regulations and federal and state tax laws and regulations;

(b) Issuing legal opinions, including opinions on the authorization, tax status and the binding effect of the obligations and their associated documents and on the lawful use of the proceeds of the obligations, as may be required by the demands of the bond market for the obligations;

(c) Advising the public body on legal procedures and practices in the bond market for the obligations, including advice on the structuring and marketing of the obligations;

(d) Preparing or assisting in the preparation of any document related to a specific issue of obligations, including but not limited to a bond authorization, bond resolution, indenture, prospectus, preliminary official statement, official statement, bond sale notice, bond form, bid form or bond purchase agreement;

(e) Advising the public body concerning the maintenance of the tax status of specific obligations, compliance with any requirements for representations or disclosures relating to the obligations and compliance with any documents issued or executed with respect to the obligations; and

(f) Advising the public body concerning accounting and investment procedures recommended or required for compliance with tax and federal securities and rebate requirements.

(2) No appointment of bond counsel under this section shall be construed as authorizing bond counsel to advise or represent the public body on matters that are committed by statute to the Attorney General or by local law to counsel for the public body. An appointment of bond counsel by a state agency or institution shall be subject to the prior approval of the State Treasurer and the Attorney General.

(3) ORS 279.712 does not apply to an appointment of bond counsel under this section.

SECTION 8. ORS 289.200 is amended to read:

289.200. (1) If the State Treasurer determines that revenue bonds should be issued:

(a) The State Treasurer may authorize and issue in the name of the State of Oregon revenue bonds secured by revenues from eligible projects to finance or refinance in whole or part the cost of acquisition, purchase, construction, reconstruction, installations improvement, betterment or extension of projects. The bonds shall be identified by project and issued in the manner prescribed by ORS 286.010, 286.020 and 286.105 to 286.135, and refunding bonds may be issued to refinance such revenue bonds.

(b) The State Treasurer shall designate the underwriter, trustee and bond counsel, if any, and enter into appropriate agreements with each to carry out the provisions of this chapter. An agreement with bond counsel designated by the State Treasurer under this section is subject to the provisions related to services provided by bond counsel under ORS 288.523, and the appointment must be approved by the Attorney General as required by ORS 288.523.

(2) Any trustee designated by the State Treasurer to carry out all or part of the powers specified in ORS 289.110 must agree to furnish financial statements and audit reports for each bond issue.

(3) The State Treasurer shall be the applicable elected representative for purposes of approving the issuance of revenue bonds under this chapter as to the extent such approval is required under section 147(f) of the Internal Revenue Code of 1986, as amended, or any successor provision thereto.

(4) The State Treasurer shall collect data from the Health, Housing, Educational and Cultural Facilities Authority regarding the amount and nature of bonded indebtedness in Oregon health care institutions financed through the authority.

SECTION 9. ORS 367.025 is amended to read:

367.025. (1) If the Department of Transportation determines that it is necessary or desirable to issue infrastructure bonds to provide moneys for the Oregon Transportation Infrastructure Fund, the department shall ask the State Treasurer to issue infrastructure bonds.

(2) When the department asks the State Treasurer to issue infrastructure bonds, if the State Treasurer determines that infrastructure bonds shall be issued:

(a) The State Treasurer may authorize and issue infrastructure bonds to provide moneys for the infrastructure fund.

(b) The State Treasurer may enter into [agreement] agreements with bond underwriters, trustees, financial advisers[, bond counsel] and other persons to carry out ORS 367.010 to 367.060. The department may appoint bond counsel as authorized by ORS 288.523, or the State Treasurer may enter into an agreement with bond counsel if the services provided under the agreement comply with the provisions of ORS 288.523 and the appointment is approved by the Attorney General as required by ORS 288.523. The department may not appoint bond counsel under this paragraph unless the State Treasurer has reviewed and approved the terms and conditions of the appointment. ORS 279.712 does not apply to an appointment or agreement described in this paragraph.

SECTION 10. ORS 348.716 is amended to read:

348.716. The Oregon Education Fund is established in the State Treasury, separate and distinct from the General Fund. Moneys in the Oregon Education Fund are continuously appropriated to the Oregon Department of Administrative Services for public education and education lottery bond debt service. Seventy-five percent of the net available earnings on amounts in all accounts of the Education Endowment Fund shall be transferred monthly to the Oregon Education Fund as directed by the Director of the Oregon Department of Administrative Services. Investment earnings on amounts in the Oregon Education Fund shall be credited to the Oregon Education Fund. [Amounts in the Oregon Education Fund shall be used only for public education.] The Legislative Assembly may, but shall be under no legal obligation to, allocate and appropriate amounts in the Oregon Education Fund to pay education lottery bonds. The Director of the Oregon Department of Administrative Services may specify when during any fiscal year amounts shall be transferred from the Oregon Education Fund to be used for public education[, including transfers to pay] or education lottery bonds.

SECTION 11. The amendments to ORS 285B.344, 285B.473, 285B.575, 286.036, 286.066, 286.071, 288.523, 289.200 and 367.025 by sections 1 to 9 of this 2001 Act apply to bonds issued on or after the effective date of this 2001 Act.

SECTION 12. 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 June 22, 2001

Filed in the office of Secretary of State June 25, 2001

Effective date June 22, 2001

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