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 1663
 
                         House Bill 2275
 
Ordered printed by the Speaker pursuant to House Rule 12.00A (5).
  Presession filed (at the request of Governor John A. Kitzhaber,
  M.D., for Oregon Department of Administrative Services)
 
 
                             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 as
introduced.
 
  Increases aggregate amount of lottery bonds that may be issued.
  Authorizes issuance of lottery bonds.
  Declares emergency, effective July 1, 2001.
 
                        A BILL FOR AN ACT
Relating to lottery bonds; creating new provisions; amending ORS
  285B.551, 458.720, 777.279, 777.282, 777.284, 777.289 and
  section 8, chapter 702, Oregon Laws 1999; appropriating money;
  and declaring an emergency.
Be It Enacted by the People of the State of Oregon:
  SECTION 1. ORS 285B.551 is amended to read:
  285B.551. (1) Pursuant to ORS 286.560 to 286.580 and 348.716,
lottery bonds may be issued:
  (a) To provide financial and other assistance, including but
not limited to loans and grants, to municipalities, ports and
other persons and entities in accordance with the laws governing
use of moneys in the Special Public Works Fund created by ORS
285B.455, the Water Fund created by ORS 285B.563, the Safe
Drinking Water Revolving Loan Fund created by ORS 285A.213, the
Oregon Port Revolving Fund created by ORS 285A.708, the
Brownfields Redevelopment Loan Fund created by ORS 285A.188 and
the Marine Navigation Improvement Fund created by ORS 777.267.
  (b) To fund Oregon's share of the costs of the Columbia River
channel deepening project.
  (2) The use of lottery bond proceeds is authorized based on the
following findings:
  (a) The financial and other assistance to municipalities, ports
and other persons and entities will assist in the construction,
improvement and expansion of infrastructure, community and port
facilities and other facilities that comprise the physical
foundation for industrial and commercial activity and provide the
basic framework for continued and expanded economic opportunities
and quality communities throughout Oregon.
  (b) The Columbia River channel deepening project is necessary
to allow newer, larger steamships access to Oregon and Washington
deep draft ports. A deeper shipping channel will allow the
Columbia River to continue as a world leader in agricultural
exports and as a key trade corridor for farms and businesses
throughout Oregon and the region.
  (c) Such financial and other assistance to municipalities,
ports and other persons and entities and the deepening of the
Columbia River channel will therefore promote economic
development within this state, and thus the use of net proceeds
derived from the operation of the Oregon State Lottery to pay
debt service on lottery bonds issued under this section to
provide such financial and other assistance to municipalities,
ports and other persons and entities and to pay a portion of the
costs of deepening the Columbia River channel is an authorized
use of state lottery funds under section 4, Article XV of the
Oregon Constitution, and ORS 461.510.
  (3) The aggregate principal amount of lottery bonds issued
pursuant to subsection (1)(a) of this section for financial and
other assistance to municipalities, ports and other persons and
entities shall not exceed the sum of   { - $45 million - }
 { + $219 million + } and an additional amount estimated by the
State Treasurer to be necessary to pay bond-related costs. The
aggregate principal amount of lottery bonds issued pursuant to
subsection (1)(b) of this section for the Columbia River channel
deepening project shall not exceed the sum of $17.7 million and
an additional amount estimated by the State Treasurer to be
necessary to pay bond-related costs. Lottery bonds issued
pursuant to this section shall be issued only at the request of
the Director of the Economic and Community Development
Department. The director shall not request the issuance of
lottery bonds pursuant to subsection (1)(b) of this section until
a final environmental impact statement has been issued and a
record of decisions has been submitted to Congress by the United
States Army Corps of Engineers, Congress has authorized the
Columbia River channel deepening project, and the Washington
sponsors' shares of the costs of the Columbia River channel
deepening project have been committed.
  (4) The net proceeds of lottery bonds issued pursuant to this
section shall be deposited in the Economic Infrastructure Project
Fund, which is hereby established in the State Treasury separate
and distinct from the General Fund. All moneys in the Economic
Infrastructure Project Fund are continuously appropriated to the
Economic and Community Development Department for any purpose for
which moneys in the Special Public Works Fund created by ORS
285B.455 may be used, any purpose for which moneys in the Water
Fund created by ORS 285B.563 may be used, any purpose for which
moneys in the Safe Drinking Water Revolving Loan Fund created by
ORS 285A.213 may be used, any purpose for which moneys in the
Oregon Port Revolving Fund created by ORS 285A.708 may be used,
any purpose for which moneys in the Brownfields Redevelopment
Loan Fund created by ORS 285A.188 may be used and any purpose for
which moneys in the Marine Navigation Improvement Fund created by
ORS 777.267 may be used. The Director of the Economic and
Community Development Department shall allocate the moneys
deposited in the Economic Infrastructure Project Fund for the
purposes described in this subsection in accordance with the
policies developed by the Oregon Economic and Community
Development Commission in accordance with ORS 285A.045. However,
the director shall transfer from the Economic Infrastructure
Project Fund to the Marine Navigation Improvement Fund the
proceeds of any lottery bonds sold to finance a portion of the
costs of the Columbia River channel deepening project. Upon
determining the relative allocation of moneys deposited in the
Economic Infrastructure Project Fund among the purposes described
in this subsection, the director shall transfer from the Economic
Infrastructure Project Fund, and deposit into each of the other
funds described in this subsection, the amounts so allocated.
Notwithstanding any other provision of law governing the funds
described in this subsection, the funds described in this
subsection may be credited with moneys transferred from the
 
Economic Infrastructure Project Fund by the director in
accordance with this subsection.
  (5) The proceeds of lottery bonds issued pursuant to this
section shall be used only for the purposes set forth in
subsection (4) of this section and for bond-related costs.
  SECTION 2. ORS 458.720 is amended to read:
  458.720. (1) Pursuant to ORS 286.560 to 286.580 and 348.716,
lottery bonds may be issued to make grants or loans to Oregon
municipalities, businesses and individuals to encourage real
estate developments that promote downtown and community center
areas, provide affordable housing and other infill developments,
and fund projects that promote business opportunities in Oregon's
distressed areas and rural communities.
  (2) The use of lottery bond proceeds is authorized based on the
following findings:
  (a) The grants and loans made will be used to fund projects
that assist Oregon communities in managing growth, thereby
attracting industry and workers and improving Oregon's labor
market; and
  (b) The projects will bring jobs and economic diversity to
Oregon's distressed areas and rural communities.
  (3) The aggregate principal amount of lottery bonds issued
pursuant to this section shall not exceed the sum of   { - $25
million - }  { + $35 million + } and an additional amount
estimated by the State Treasurer to be necessary to pay
bond-related costs. Lottery bonds issued pursuant to this section
shall be issued only at the request of the Director of the
Housing and Community Services Department.
  (4) The net proceeds of lottery bonds issued pursuant to this
section shall be deposited in the Community Development Incentive
Project Fund, which is hereby established in the State Treasury
separate and distinct from the General Fund.
  (5) The proceeds of lottery bonds issued pursuant to this
section shall be used only for the purposes set forth in
subsection (1) of this section and for bond-related costs.
  (6) Interest earned by the Community Development Incentive
Project Fund shall be credited to the fund. In addition to any
other moneys specifically designated by law, the fund shall
consist of any amounts appropriated by the Legislative Assembly
and any gifts, grants or donations.
  SECTION 3. Section 8, chapter 702, Oregon Laws 1999, is amended
to read:
   { +  Sec. 8. + } (1) The State Parks and Recreation Department
shall pay amounts required for debt service  { + payable during
the 1999-2001 + }  { +  biennium + } on lottery bonds issued
under section 4   { - of this 1999 Act - }  { + , chapter 702,
Oregon Laws 1999, + } from moneys allocated to the department
from the Administrative Services Economic Development Fund.
  (2) The Economic  { + and Community + } Development Department
shall pay amounts required for debt service on lottery bonds
issued during the 1999-2001 biennium under   { - sections 1, 2, 3
and 6 of this 1999 Act - }  { +  ORS 285B.551 and sections 2 and
6, chapter 702, Oregon Laws 1999, + } from moneys allocated to
the department from the Administrative Services Economic
Development Fund.
   { +  (3) The Economic and Community Development Department
shall pay amounts required for debt service payable during the
2001-2003 biennium and all remaining debt service on lottery
bonds issued during the 1999-2001 biennium and the 2001-2003
biennium under ORS 285B.551 and sections 2 and 6, chapter 702,
Oregon Laws 1999, from moneys allocated to the Economic and
Community Development Department from the Administrative Services
Economic Development Fund.
  (4) The Housing and Community Services Department shall pay
amounts required for debt service payable during the 2001-2003
biennium and all remaining debt service on lottery bonds issued
during the 1999-2001 biennium and the 2001-2003 biennium under
ORS 458.720 from moneys allocated to the Housing and Community
Services Department from the Administrative Services Economic
Development Fund. + }
  SECTION 4.  { + (1) Pursuant to ORS 286.560 to 286.580 and
348.716, lottery bonds may be issued to provide loans and other
financial assistance to public agencies, as defined in ORS
468.423, for waste water pollution control, reduction or
abatement as described in ORS 468.429.
  (2) The use of lottery bond proceeds is authorized upon the
following findings:
  (a) Financial assistance for public agency waste water
pollution control, reduction or abatement activities will result
in additional wastewater treatment capacity in Oregon.
  (b) Wastewater treatment capacity comprises a portion of the
physical foundation for industrial and commercial activities and
provides a portion of the basic framework for continued and
expanded economic opportunities throughout Oregon.
  (c) Such financial assistance will therefore further economic
development within this state, making the use of net proceeds
derived from the operation of the Oregon State Lottery to pay
debt service on lottery bonds issued under this section to
provide financial assistance to public agencies for wastewater
pollution control, reduction or abatement activities an
authorized use of state lottery funds under section 4, Article XV
of the Oregon Constitution, and ORS 461.510.
  (3) The aggregate principal amount of lottery bonds issued
pursuant to this section to provide financial assistance for
public agency waste water pollution control, reduction or
abatement activities shall not exceed $8 million and an
additional amount estimated by the State Treasurer to be
necessary to pay bond-related costs. Lottery bonds authorized by
this section shall be issued only at the request of the Director
of the Department of Environmental Quality.
  (4) The net proceeds of lottery bonds issued pursuant to this
section shall be deposited in the Water Pollution Control
Revolving Fund established by ORS 468.427.
  (5) The proceeds of lottery bonds issued pursuant to this
section shall be used only for the purposes set forth in
subsection (1) of this section and for bond-related costs. + }
  SECTION 5.  { + Sections 6 to 8 of this 2001 Act are added to
and made a part of ORS 777.277 to 777.289. + }
  SECTION 6.  { + Sections 6 to 8 of this 2001 Act and the
amendments to ORS 777.282 by section 10 of this 2001 Act are
intended to authorize the issuance of lottery bonds to provide
funds to replace, as needed, the unobligated net lottery revenues
otherwise required to be allocated and deposited during the
2001-2003 biennium under ORS 777.282 in the Channel Deepening
Account for the purposes of the channel deepening project,
thereby enabling the state to use those unobligated net lottery
revenues for other purposes. + }
  SECTION 7.  { + (1) Pursuant to ORS 286.560 to 286.580 and
348.716, lottery bonds may be issued to pay a portion of the
Oregon nonfederal share of the costs of the channel deepening
project.
  (2) The use of lottery bond proceeds is authorized upon the
following findings:
  (a) The Columbia River channel deepening project is necessary
to allow newer, larger steamships access to Oregon and Washington
deep draft ports. A deeper shipping channel will allow the
Columbia River to continue as a world leader in agricultural
exports and as a key trade corridor for farms and businesses
throughout Oregon and the region.
  (b) Financial assistance to the Oregon sponsors of the channel
deepening project for the costs of the project will therefore
promote economic development within this state, making the use of
the net proceeds derived from the operation of the Oregon State
Lottery to pay debt service on lottery bonds issued under this
section to pay a portion of the costs of the channel deepening
project an authorized use of state lottery funds under section 4,
Article XV of the Oregon Constitution, and ORS 461.510.
  (3) The aggregate principal amount of lottery bonds issued
pursuant to subsection (1) of this section to pay a portion of
the costs of the channel deepening project shall not exceed $6.7
million plus an additional amount estimated by the State
Treasurer to be necessary to pay bond-related costs. Lottery
bonds shall be issued under this section only at the request of
the Director of the Economic and Community Development
Department.
  (4) The net proceeds of lottery bonds issued pursuant to this
section shall be deposited into the Channel Deepening Account and
paid to the Port of Portland in accordance with the grant
agreement.
  (5) The net proceeds of the lottery bonds issued pursuant to
this section shall be used only for the purposes set forth in
this section and for bond-related costs. + }
  SECTION 8.  { + Lottery bonds authorized under section 7 of
this 2001 Act may be issued only after:
  (1) A final environmental impact statement on the channel
deepening project has been issued and a record of decisions has
been submitted to the United States Congress by the United States
Army Corps of Engineers;
  (2) The United States Congress has authorized the channel
deepening project;
  (3) The shares of costs of the channel deepening project of the
Washington sponsors have been committed; and
  (4) A project cooperation agreement with the appropriate
federal agencies has been signed. + }
  SECTION 9. ORS 777.279 is amended to read:
  777.279. (1) The Legislative Assembly finds that:
  (a) The deep draft navigation channel in the lower Columbia
River is an asset of statewide importance that provides Oregon
shippers with competitive access to world markets and that ranks
as the second largest grain export system in the world with the
single largest wheat export port in the United States at
Portland;
  (b) Waterborne commerce originating in Oregon in 1996 was
valued at $4.2 billion and, in order to sustain and increase the
jobs and other economic benefits associated with maritime trade,
the channel must be maintained at depths adequate to accommodate
new generations of deeper draft cargo vessels;
  (c) If Congress authorizes deepening of the channel to
accommodate these larger vessels, it is in the best interests of
the State of Oregon to ensure that funds are available to pay the
Oregon share of channel deepening costs; and
  (d) It is desirable to make a present commitment of lottery
revenues that are expected to be received in the 1999-2001
 { - and 2001-2003 biennia - }  { +  biennium + }. A clear and
prompt financial commitment from the State of Oregon will allow
the primary sponsor, in reliance on that commitment, to make
prompt commitments to federal agencies to pay the Oregon
nonfederal share. Prompt commitment by the primary sponsor will
enhance the likelihood that federal funds will be received for
the channel deepening project.
  (2) The Legislative Assembly declares that the purpose of ORS
777.277 to 777.289 is to obligate the State of Oregon to pay the
amounts specified in ORS 777.282 from future lottery revenues.
The obligation of this state to pay the amounts specified in ORS
777.282 and in the grant agreement is limited to, and expressly
conditioned on, the availability of unobligated net lottery
proceeds and any other moneys lawfully credited to the Channel
Deepening Account of the Marine Navigation Improvement Fund.
Neither the faith and credit nor any of the taxing power of the
State of Oregon are pledged or otherwise committed by ORS
285B.500 to 285B.515 and 777.277 to 777.289 and section 9,
chapter 644, Oregon Laws 1997, and the commitments of the State
of Oregon under ORS 285B.500 to 285B.515 and 777.277 to 777.289
and section 9, chapter 644, Oregon Laws 1997, and the grant
agreement shall not constitute a debt or liability of the state
within the meaning of section 7, Article XI of the Oregon
Constitution.
  (3) The Legislative Assembly further declares that it is the
current intent of the Legislative Assembly, if the amount
specified in ORS 777.282 is not sufficient to pay the Oregon
share of the total cost of the channel deepening project, to
provide future lottery revenues in an amount sufficient to pay
the Oregon nonfederal share of the total cost, when determined,
of the channel deepening project.
  SECTION 10. ORS 777.282 is amended to read:
  777.282. (1) The Channel Deepening Account is hereby created in
the Marine Navigation Improvement Fund.
  (2) Commencing with the fifth fiscal quarter of the 1999-2001
biennium and continuing each quarter through the end of the
  { - 2001-2003 - }   { + 1999-2001 + } biennium, the state shall
allocate and deposit in the Channel Deepening Account not less
than $833,334 each fiscal quarter   { - until an amount has been
deposited into that account which is equal to the lesser of the
amount of Oregon nonfederal share as determined under the grant
agreement or $10 million - } . The deposits shall be made from
the first available unobligated net lottery proceeds.
  (3) Any earnings on amounts in the Channel Deepening Account
shall be credited to the Channel Deepening Account. All moneys on
deposit from time to time in the Channel Deepening Account,
including investment earnings thereon, and all amounts required
by this section to be deposited in the Channel Deepening Account,
shall be allocated and are hereby appropriated continuously to
the Economic and Community Development Department, and shall be
transferred by the department to the primary sponsor pursuant to
and upon the terms and conditions set forth in the grant
agreement for costs of the channel deepening project.
  SECTION 11. ORS 777.284 is amended to read:
  777.284. (1) Within six months after July 25, 1997, the
Director of the Economic and Community Development Department
shall enter into a grant agreement with the primary sponsor that
commits the state to make the deposits specified in ORS 777.282
and commits the Economic and Community Development Department to
pay those deposits, plus earnings, to the primary sponsor as soon
as funds are available in the Channel Deepening Account and are
required by the primary sponsor for payment of the Oregon
nonfederal share. Notwithstanding ORS 777.267 or any other
provision of law, this commitment of this state and the
department shall be conditioned solely on federal authorization
of the channel deepening project under the federal Water
Resources Development Act or a similar federal Act, signing of a
project cooperation agreement with the appropriate federal
agencies and receipt by this state of unobligated net lottery
proceeds sufficient to make the deposits specified in ORS
777.282.
  (2) The total amount paid to the primary sponsor pursuant to
the grant agreement shall not exceed the lesser of the amount of
the Oregon nonfederal share or $10 million plus any interest
earnings on the amounts in the Channel Deepening Account. The
grant agreement shall:
  (a) Specify a method for determining the total amount of the
Oregon nonfederal share;
  (b) Pledge the unobligated net lottery proceeds  { + required
to be deposited in the channel deepening account pursuant to ORS
 
777.282 (2) + } to pay the amounts due to the primary sponsor
under the grant agreement;
  (c) Specify the administrative procedures for making payments
to the primary sponsor;
  (d) Provide for notification to the director if the primary
sponsor determines that it is unable to undertake the channel
deepening project;
  (e) Allow assignment of the right to receive amounts payable
under the grant agreement to third parties;
  (f) Obligate the primary sponsor to remit any unexpended grant
funds and any earnings thereon to the State of Oregon after the
channel deepening project is complete and all its costs have been
paid; and
  (g) Contain such additional terms and conditions as the
director considers necessary or appropriate to ensure that the
moneys paid under the grant agreement are expended solely on the
channel deepening project.
  (3) The grant agreement, when executed by the director and
accepted by the primary sponsor, shall be a valid, binding and
irrevocable contractual obligation of the State of Oregon in
accordance with its terms. However, amounts due under the grant
agreement shall be payable solely from the unobligated net
lottery proceeds required by ORS 777.282 to be deposited in the
Channel Deepening Account.
  (4) The primary sponsor may pledge the unobligated net lottery
proceeds   { - described in - }  { +  required to be deposited in
the channel deepening account pursuant to  + }ORS 777.282 (2) and
assign its right to receive amounts due under the grant agreement
as security for any contractual obligation the primary sponsor
undertakes to pay or finance costs of the channel deepening
project. Any pledge or assignment authorized by this subsection
shall be valid and binding upon the primary sponsor, the
department, the State of Oregon and all other persons from the
date it is made. The unobligated net lottery proceeds so pledged
shall be immediately subject to the lien of the pledge without
physical delivery, filing or other act, and the lien of the
pledge shall be superior to all other claims and liens of any
kind whatsoever. Upon notice from the primary sponsor that it has
pledged the unobligated net lottery proceeds or assigned the
right to receive amounts due under the grant agreement, the
department shall fully cooperate with the primary sponsor and the
pledgee or assignee to give effect to the pledge or assignment,
including but not limited to acknowledging in writing to the
primary sponsor and the pledgee or assignee the existence and
validity of the pledge or assignment and agreeing that amounts
due under the grant agreement shall be paid to the pledgee or
assignee or into the custodial accounts established for the
benefit of the pledgee or assignee. However, a pledge or
assignment shall not require the State of Oregon to pay any
greater amounts than specified in the grant agreement.
  (5) The grant agreement shall not contain provisions or be
construed or enforced in any manner that would cause the grant
agreement to constitute a debt or liability of the state that
violates section 7, Article XI of the Oregon Constitution.
  SECTION 12. ORS 777.289 is amended to read:
  777.289. (1) The deposit of unobligated net lottery proceeds to
the Channel Deepening Account  { + pursuant to ORS 777.282
(2) + } shall cease if and when the Director of the Economic and
Community Development Department certifies in writing that
deposits are no longer required because:
  (a) Sufficient funds are on hand in the Channel Deepening
Account to pay all amounts required to be paid under the grant
agreement;
  (b) All amounts required to be paid under the grant agreement
have been paid;   { - or - }
 
  (c) The primary sponsor has notified the director pursuant to
the grant agreement that the primary sponsor is unable to
undertake the channel deepening project  { - . - }  { + ; or + }
   { +  (d) All amounts required to be deposited in the Channel
Deepening Account pursuant to ORS 777.282 (2) have been
deposited. + }
  (2) Upon receipt of the director's written certification
pursuant to subsection (1) of this section, the State Treasurer
shall thereafter credit any amounts remaining in the Channel
Deepening Account that are not required to pay amounts due under
the grant agreement and any lottery revenues that otherwise would
have been deposited in the Channel Deepening Account under
 { - this section - }   { + ORS 777.282 (2) + } to the
Administrative Services Economic Development Fund. In addition,
any unexpended grant funds and earnings which are remitted to the
state under the grant agreement shall be credited to the
Administrative Services Economic Development Fund.
  SECTION 13.  { + 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
July 1, 2001. + }
                         ----------