Chapter 680 Oregon Laws 2001

AN ACT

HB 3187

Relating to private activity bonds; amending ORS 285B.320, 285B.323, 285B.329, 285B.335, 285B.341, 286.615 and 468.265.

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

SECTION 1. ORS 286.615 is amended to read:

286.615. (1) The Private Activity Bond Committee is established. It shall consist of one representative each from the Oregon Department of Administrative Services and from the State Treasurer and one public representative appointed to serve at the pleasure of the Governor.

(2) The representative from the department shall serve as chair of the committee.

(3) The purpose of private activity bonding in this state shall be to maximize the economic benefits of such bonding to the citizens of this state. To this end, the committee shall adopt by rule standards for amounts allotted to it for further allocation for economic development, housing, education, redevelopment, public works, energy, waste management, waste and recycling collection, transportation and other activities which the committee determines will benefit the citizens of this state. In developing standards, the committee shall:

(a) Survey the expected need for private activity bond allocations at least once each year;

(b) Develop strategies for reserving and allocating the limit which are designed to maximize the availability of tax exempt financing among competing sectors of the Oregon economy; and

(A) Support projects that increase the number of family wage jobs in this state.

(B) Promote economic recovery in small cities heavily dependent on a single industry.

(D) Utilize educational resources available at institutions of higher education.

(E) Support development of the state’s small businesses, especially businesses owned by women and members of minority groups.

(F) Encourage use of Oregon’s human and natural resources in endeavors which harness Oregon’s economic comparative advantages.

(G) Limit assistance to projects that assist businesses selling goods and services in markets for which national or international competition exists.

(4) The state private activity bond limit allotted to the Private Activity Bond Committee as provided in ORS 286.635 shall be allocated and reallocated among issuers by the Private Activity Bond Committee as follows:

(a) Any amounts not reserved to an issuer or a class of issuers under the limitation adopted under ORS 286.525 shall be allocated or reallocated by the committee under rules adopted under subsection (3) of this section.

(b) Any amounts provided for in the limitation under ORS 286.525 that are unused shall be carried forward for use as provided by rules adopted under subsection (3) of this section.

(c) The rules adopted by the committee shall limit the period of time for which an allocation of private activity bonding authority is effective. Such rules shall insure allocations made during a calendar year shall be used during that calendar year or the unused amount of the allocation shall be reallocated during that calendar year.

(5) Unused allocations shall not be transferable among issuers but shall be available for reallocation.

SECTION 2. ORS 285B.320 is amended to read:

285B.320. The Legislative Assembly finds that by use of the powers and procedures described in ORS 285B.320 to 285B.377 for the assembling and financing of lands for industrial, solid waste disposal, commercial and research and development uses and for the construction and financing of facilities for such uses, financed through the issuance of bonds secured solely by the properties, lease payments, loan payments, rentals or other financing payments thus made available, the state may be able to reduce substantially in various counties the occurrence of economic conditions requiring more expensive remedial action. It is the purpose of ORS 285B.320 to 285B.377 to authorize the exercise of powers granted by ORS 285B.320 to 285B.377 by this state in addition to and not in lieu of any other powers it may possess.

SECTION 3. ORS 285B.323 is amended to read:

285B.323. As used in ORS 285B.320 to 285B.377, unless the context requires otherwise:

(1) “Bond” means any evidence of indebtedness, including but not limited to any bond, note, obligation, loan agreement, financing agreement, contracts for leasing, rental or financing of real or personal property, including contracts for rental, long term leases under an optional contract for purchase, financing agreements with vendors, financial institutions or others or for purchase of any property secured by revenues or from other financing sources as provided in ORS 285B.320 to 285B.377. A bond, as defined in this subsection and issued under ORS 285B.320 to 285B.377, shall be considered a revenue bond for purposes of ORS 286.031.

(2) “Economic development project” includes any properties, real or personal, used or useful in connection with a revenue producing enterprise or any solid waste disposal facilities and related vehicles, rolling stock or equipment. “Economic development project” shall not include any facility or facilities designed primarily for the generation, transmission, sale or distribution of electrical energy.

(3) “Eligible project” means an economic development project found by the Oregon Economic and Community Development Commission to meet standards of the commission adopted under ORS 285A.110. The commission may treat as a single eligible project for bonding purposes any number of economic development projects determined to be eligible projects.

SECTION 4. ORS 285B.329 is amended to read:

285B.329. (1) The state, acting through the State Treasurer, shall not undertake to finance any economic development project pursuant to ORS 285B.320 to 285B.377 before the Oregon Economic and Community Development Commission has reviewed the project pursuant to standards adopted under ORS 285A.110.

(2) The commission is not required to make the determination and findings described in ORS 285A.055 (1) and (2) if the economic development project involves a solid waste disposal facility and related vehicles, rolling stock or equipment when the project does not require any private activity volume cap under ORS 286.605 to 286.645.

SECTION 5. ORS 285B.335 is amended to read:

285B.335. In addition to any other powers granted by law or by charter, in relation to an eligible project, the state, acting through the State Treasurer or a designee thereof, may:

(1) Enter into agreements to finance the costs of an eligible project by loaning or otherwise making available the proceeds of bonds authorized by ORS 285B.374 and 285B.377 to any person, firm or public or private corporation or federal or state governmental subdivision or agency under such terms and with such security as the state may approve;

(2) Lease and sublease eligible projects to any person, firm or public or private corporation or federal or state governmental subdivision or agency in such manner that rents to be charged for the use of such projects shall be established, and revised from time to time as necessary, so as to produce income and revenue sufficient to provide for the prompt payment of principal of and interest on all bonds issued under this section when due, and the lease or financing agreement shall also provide that the lessee, borrower or financing party shall be required to pay all expenses of the operation and maintenance of the project including, but without limitation, adequate insurance thereon and insurance against all liability for injury to persons or property arising from the operation thereof, and all taxes and special assessments levied upon or with respect to the leased premises and payable during the term of the lease, during which term ad valorem taxes in the same amount and to the same extent as though the lessee were the owner of all real and personal property comprising the project;

(3) Pledge and assign to the holders of such bonds or a trustee therefor all or any part of the revenues of one or more eligible projects owned or to be acquired by the state, and define and segregate such revenues or provide for the payment thereof to a trustee;

(4) Mortgage or otherwise encumber eligible projects in favor of the holders of such bonds or in favor of any escrow agent, vendor, lender, other financing party or trustee therefor. However, in creating any such mortgages or encumbrances the state can not obligate itself except with respect to the project;

(5) Make all contracts, execute and deliver all instruments, and do all things necessary or convenient in the exercise of the powers granted by this section, or in the performance of its covenants or duties, or in order to secure the payment of its bonds; including a contract entered into prior to the construction, acquisition and installation of the eligible project authorizing the lessee, borrower or other financing party, subject to such terms and conditions as the state shall find necessary or desirable and proper, to provide for the construction, acquisition and installation of the buildings, improvements and equipment to be included in the project by any means available to the lessee, borrower or other financing party, and in the manner determined by the lessee, borrower or other financing party, and without advertisement for bids as may be required for the construction, acquisition or installation of other public facilities;

(6) Enter into and perform such contracts and agreements with political subdivisions and state agencies as the respective governing bodies of the same may consider proper and feasible for or concerning the planning, construction, installation, lease, or other acquisition, and the financing of such facilities, which contracts and agreements may establish a board, commission or such other body as may be deemed proper for the supervision and general management of the facilities of the eligible project; [and]

(7) Accept from any authorized agency of the state or federal government loans or grants for the planning, construction, acquisition, leasing, or other provision of any eligible project, and enter into agreements with such agency respecting such loans or grants; and

(8) Acquire, own, sell, assign or otherwise hold legal or equitable title to or an interest in eligible projects or hold federal tax ownership of eligible projects.

SECTION 6. ORS 285B.341 is amended to read:

285B.341. Except as provided in ORS 285B.335 and 285B.338 [(2)], the state shall not have power to operate any eligible project as a business or in any manner whatsoever, and except as provided in ORS 285B.335, 285B.338, 285B.374 and 285B.377, nothing in ORS 285B.320 to 285B.377 authorizes the state to expend any funds on any eligible project, other than the revenues of such projects, or the proceeds of revenue bonds issued hereunder, or other funds granted to the state for the purposes of an eligible project. For the purpose of exercising the powers and authority granted under ORS 285B.335 or 285B.338, the state and the Oregon Economic and Community Development Commission are not subject to the requirements of ORS chapter 279.

SECTION 7. ORS 468.265 is amended to read:

468.265. (1) In addition to any other powers which it may now have, each county shall have the following powers, together with all powers incidental thereto or necessary for the performance of the following:

(a) To acquire, whether by purchase, exchange, devise, gift or otherwise, establish, construct, improve, maintain, equip and furnish one or more pollution control facilities or any interest therein to be located, in whole or in part, within such municipality or in another municipality, if the other municipality gives written consent.

(b) To enter into a lease, sublease, lease-purchase, installment sale, sale, or agreement for any facility upon such terms and conditions as the governing body may deem advisable, provided the same shall at least fully cover all debt service requirements with respect to the facility and shall not conflict with the provisions of ORS 468.263 to 468.272.

(c) To sell, exchange, donate and convey to others any or all facilities upon such terms as the governing body may deem advisable, including the power to receive for any such sale the note or notes of the purchaser of the facilities or property whenever the governing body finds any such action to be in furtherance of the purposes of ORS 468.263 to 468.272.

(d) To issue revenue bonds for the purpose of carrying out any of its powers under ORS 468.263 to 468.272.

(e) Whenever the governing body finds such loans to be in the furtherance of the purposes of ORS 468.263 to 468.272 and subject always to the limitations contained in ORS 468.266, to make secured or unsecured loans for the purpose of financing or refinancing the acquisition, construction, improvement or equipping of a facility and to charge and collect interest on such loans and pledge the proceeds thereof as security for the payment of the principal and interest of any bonds issued hereunder and any agreements made in connection therewith. A facility, in whole or in part, must be located in the municipality or in another municipality if the other municipality gives written consent.

(f) To mortgage and pledge any or all facilities or any part or parts thereof, whether then owned or thereafter acquired, and to pledge the revenues, proceeds and receipts or any portion thereof from a facility as security for the payment of the principal of and interest on any bonds so issued.

(g) To refund outstanding obligations incurred by an enterprise to finance the cost of a facility when the governing body finds that such refinancing is in the public interest.

(h) To pay compensation for professional services and other services as the governing body shall deem necessary to carry out the purposes of ORS 468.263 to 468.272.

(i) To acquire and hold obligations of any kind to carry out the purposes of ORS 468.263 to 468.272.

(j) To invest and reinvest funds under its control as the governing body shall direct.

(k) To enter into contracts and execute any agreements or instruments and to do any and all things necessary or appropriate to carry out the purposes of ORS 468.263 to 468.272.

(L) To acquire, own, sell, assign or otherwise hold legal or equitable title to or an interest in pollution control facilities or hold federal tax ownership of pollution control facilities.

(2) The county shall not have the power to operate any facility as a business other than as owner pursuant to subsection (1)(L) of this section or as lessor or seller, nor shall it permit any funds derived from the sale of bonds to be used by any lessee or purchaser of a facility as working capital.

(3) Counties may jointly exercise any power or authority granted under ORS 468.263 to 468.272, including, without limitation, the power to borrow money or issue bonds or notes.

(4) For the purpose of exercising the power and authority granted under ORS 468.263 to 468.272, a county is not subject to the requirements of ORS chapter 279.

Approved by the Governor June 28, 2001

Filed in the office of Secretary of State June 29, 2001

Effective date January 1, 2002

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