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 2275
A-Engrossed
House Bill 3382
Ordered by the House May 4
Including House Amendments dated May 4
Sponsored by Representative HOPSON; Representative BECK (at the
request of Oregon School Boards Association, State Treasurer
Randall Edwards)
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.
Allows local government to issue bonds for purpose of paying
public employer's pension liability.
Allows local government to establish debt service trust
{ + fund + } for purpose of paying principal and interest on
bonds so issued.
Allows local government that receives funds from state agency
to enter into funds diversion agreement for purpose of paying
principal and interest on bonds so issued.
A BILL FOR AN ACT
Relating to bonding for local government liabilities arising out
of retirement plans.
Be It Enacted by the People of the State of Oregon:
SECTION 1. { + Sections 2, 3, 4, 5 and 6 of this 2001 Act are
added to and made a part of ORS chapter 238. + }
SECTION 2. { + As used in sections 2 to 6 of this 2001 Act:
(1) 'Governmental unit' has the meaning given that term in ORS
288.150, and includes an agency created by two or more political
subdivisions pursuant to ORS 190.003 to 190.130 or 190.265.
(2) 'Pension liability' means:
(a) Monetary obligations of a participating public employer for
which the employer is or will be required to transmit amounts to
the Public Employees Retirement Board under the provisions of ORS
238.225, including any obligations arising out of an integration
contract under ORS 238.680, or any other liability of a
governmental unit that is attributable to an obligation to pay
pensions or other retirement benefits to officers or employees of
the governmental unit, whether active or retired; and
(b) Monetary obligations of a public employer arising out of an
integration contract under ORS 238.680 for which the employer is
required to transmit amounts to the Public Employees Retirement
Board.
(3) 'State agency' means any officer, board, commission,
department, division or institution in the administrative branch
of state government. + }
SECTION 3. { + (1) The Legislative Assembly finds that
authorizing issuance of limited tax bonds or revenue bonds to
finance pension liabilities may reduce the cost of public
pensions to taxpayers and that the reduction of those costs to
taxpayers is a matter of statewide concern.
(2) Notwithstanding any limitation on indebtedness or borrowing
under state or local law, for the purpose of obtaining funds to
pay the pension liability of a governmental unit, the governing
body of a governmental unit may authorize and cause the issuance
of limited tax bonds as defined in ORS 288.150, revenue bonds
authorized by charter or pursuant to ORS 288.805 to 288.945, or
any combination of those bonds. The governing body of a
governmental unit may pledge the full faith and credit and taxing
power of the governmental unit to the payment of the principal
and interest on bonds issued under sections 2 to 6 of this 2001
Act, and any premium on those bonds.
(3) Limited tax bonds authorized under this section must be
issued in the manner prescribed by ORS chapters 287 and 288 for
the issuance of limited tax bonds. A county may not issue limited
tax bonds under this section for an amount that exceeds five
percent of the real market value of the taxable property within
the boundaries of the county.
(4) Revenue bonds authorized under this section need not comply
with the procedure specified in ORS 288.815.
(5) A governmental unit that issues limited tax bonds or
revenue bonds under this section may also issue limited tax bonds
or revenue bonds for the purpose of refunding the bonds.
(6) A governmental unit may enter into indentures or other
agreements with trustees or escrow agents for the issuance,
administration or payment of bonds authorized under this section.
(7) The state may not issue bonds under the provisions of this
section. + }
SECTION 4. { + (1) Governmental units may enter into
intergovernmental agreements for the collective issuance,
administration or payment of bonds authorized under section 3 of
this 2001 Act. An agreement for collective issuance,
administration or payment of bonds under this subsection may
provide for the contribution and pooling of the assets of the
governmental units as security for the bonds, and may make
provisions for such other matters as the governmental units
determine convenient. Notwithstanding ORS 190.080, any
intergovernmental entity created by governmental units under this
section shall have the power to issue bonds as described in
section 3 of this 2001 Act. The bonds may be issued and sold as
parity bonds, issued and sold individually or issued and sold in
such combinations or forms as determined to be appropriate by the
governmental units.
(2) Proceeds of bonds sold under an intergovernmental agreement
entered into under this section, and any other funds or assets of
a governmental unit, together with interest or earnings on the
proceeds, funds and assets, may be consolidated into one or more
funds or accounts and may be pledged to the holders of the bonds.
(3) Governmental units may enter into indentures or other
agreements with trustees or escrow agents for the issuance,
administration or payment of bonds pursuant to an
intergovernmental agreement entered into under this section.
(4) The State Treasurer may cooperate with, assist and provide
recommendations to governmental units, and any intergovernmental
entity created by governmental units under this section, relating
to all matters involved in the issuance, administration and
payment of bonds. Any expenses incurred by the State Treasurer in
providing assistance to governmental units under this section may
be paid as an administrative expense of the governmental unit
from the proceeds of the bonds issued with the assistance of the
State Treasurer. + }
SECTION 5. { + (1) A governmental unit, or a group of
governmental units that enter into an intergovernmental agreement
under section 4 of this 2001 Act, may establish a debt service
trust fund for the purpose of paying the principal and interest
on bonds issued under sections 2 to 6 of this 2001 Act. The
trustee of the debt service trust fund shall hold the moneys paid
into the trust fund solely for the purpose of paying the
principal and interest on bonds issued under sections 2 to 6 of
this 2001 Act and for paying the administrative costs of the
trust fund.
(2) Moneys held in a debt service trust fund are subject to the
limitations on investment imposed by ORS 294.033 and 294.035.
(3) A governmental unit, or a group of governmental units that
enter into an intergovernmental agreement under section 4 of this
2001 Act, that has established a debt service trust fund under
this section may not divert or pledge any moneys paid into the
trust fund for any purpose other than the purpose specified in
subsection (1) of this section until the total amount of
principal and interest on bonds issued by the governmental unit
or under the intergovernmental agreement, and any premium on
those bonds, is paid. + }
SECTION 6. { + (1) A governmental unit, or a group of
governmental units that enter into an intergovernmental agreement
under section 4 of this 2001 Act, that receives funds from any
state agency may enter into a funds diversion agreement with the
state agency for the purpose of paying the principal and interest
on bonds issued under sections 2 to 6 of this 2001 Act, and any
premium on those bonds. A diversion agreement entered into under
this section must provide that:
(a) Moneys payable to the governmental unit or governmental
units by the state agency from appropriations from the General
Fund or any other source of moneys will be paid directly to a
debt service trust fund established under section 5 of this 2001
Act in amounts equal to the debt service owed by the governmental
unit or governmental units;
(b) The state agency must pay the amounts required under the
funds diversion agreement to the debt service trust fund
established under section 5 of this 2001 Act pursuant to the
schedule specified in the agreement before paying any other
amounts to the governmental unit or governmental units;
(c) The agreement is irrevocable; and
(d) The agreement will remain in effect until all the bonds
issued by the governmental unit or under the intergovernmental
agreement are mature or redeemed.
(2) If for any reason a state agency that has entered into a
funds diversion agreement is not able to pay moneys to a debt
service trust fund as contemplated by the agreement, the state
agency shall give notice to the governmental unit or governmental
units within 30 days after the state agency is aware that the
moneys will not be paid.
(3) Nothing in this section, or in any funds diversion
agreement entered into by a state agency under this section, may
in any manner obligate the state or any state agency:
(a) To pay any amount to a governmental unit that the
governmental unit is not otherwise entitled to receive under law;
or
(b) To pay any principal or interest on bonds issued under
sections 2 to 6 of this 2001 Act. + }
----------