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.

 
 
 
     71st OREGON LEGISLATIVE ASSEMBLY--2001 Regular Session
 
NOTE:  Matter within  { +  braces and plus signs + } in an
amended section is new. Matter within  { -  braces and minus
signs - } is existing law to be omitted. New sections are within
 { +  braces and plus signs + } .
 
LC 1166
 
                           B-Engrossed
 
                         House Bill 2121
                   Ordered by the House May 24
     Including House Amendments dated February 14 and May 24
 
Ordered printed by the Speaker pursuant to House Rule 12.00A (5).
  Presession filed (at the request of State Treasurer Jim Hill)
 
 
                             SUMMARY
 
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure.
 
  Authorizes state agency issuing certain bonds to designate
trustee with approval of State Treasurer. Authorizes appointment
of bond counsel by state agency issuing certain bonds or by State
Treasurer.  { + Clarifies that appointment of bond counsel by
state agency must be with approval of State Treasurer and
Attorney General. + } Modifies period over which interest on
certain bonds may be capitalized.
  Provides that moneys in Oregon Education Fund are continuously
appropriated to Oregon Department of Administrative Services for
public education and education lottery bond debt service.
  Declares emergency, effective on passage.
 
                        A BILL FOR AN ACT
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. + }
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