71st OREGON LEGISLATIVE ASSEMBLY--2001 Regular Session
 
SA to SB 832
 
LC 3248/SB 832-3
 
                      SENATE AMENDMENTS TO
                         SENATE BILL 832
 
      By COMMITTEE ON INFORMATION MANAGEMENT AND TECHNOLOGY
 
                            March 26
 
  On page 1 of the printed bill, delete lines 4 through 28 and
delete pages 2 and 3 and insert:
  '  { +  SECTION 1. + }  { + Sections 2 to 7 and 10 of this 2001
Act are added to and made a part of ORS chapter 353. + }
  '  { +  SECTION 2. + }  { + Sections 2 to 7 and 10 of this 2001
Act shall be known and may be cited as the Oregon Opportunity
Act. + }
  '  { +  SECTION 3. + }  { + As used in sections 2 to 7 and 10
of this 2001 Act:
  ' (1) 'Capital costs' means the costs of acquiring,
constructing, improving or equipping capital projects or other
capital expenditures necessary or desirable to create, develop,
maintain or directly or indirectly finance the Oregon Opportunity
program.
  ' (2) 'Master Settlement Agreement' means the Master Settlement
Agreement, and related documents, entered into on November 23,
1998, by the State of Oregon and leading United States tobacco
product manufacturers.
  ' (3) 'Noncapital costs' means the costs of programs,
scholarships, endowments, research infrastructure and recruitment
of scientists and researchers, or other noncapital costs or
expenses, necessary or desirable to create, develop, maintain or
directly or indirectly finance the Oregon Opportunity program.
  ' (4) 'Oregon Opportunity program' means the program created by
Oregon Health Sciences University pursuant to section 5 of this
2001 Act. + }
  '  { +  SECTION 4. + }  { + (1) The purpose of sections 2 to 7
and 10 of this 2001 Act is to directly or indirectly finance
Oregon Health Sciences University's Oregon Opportunity program.
  ' (2) It is the policy of the State of Oregon that, in order to
capture the health and economic benefits of the coming
biotechnology boom for all Oregonians, the state enter into a
partnership with Oregon Health Sciences University to enhance
medical research.
  ' (3) The Legislative Assembly finds that:
  ' (a) Oregon should take advantage of research breakthroughs in
biomedicine, health care and technology that are opening an
unprecedented new era. Research advances will someday show
scientists how to block or replace genes that cause disease. The
state should seize the opportunity to provide all Oregonians
access to leading edge therapies and procedures.
  ' (b) Research breakthroughs are expected to fuel tremendous
economic growth, and Oregon must be poised to capitalize on these
breakthroughs. Biotechnology is likely to be the next great
economic engine in the United States, and the state should take
positive action to ensure Oregon's participation in this emerging
and important industry. A public commitment to biomedical and
related research in Oregon is necessary to drive the formation,
expansion and proliferation of biotechnology companies that will
 
commercialize myriad new treatments, medications, biomedical
equipment and other technology.
  ' (c) The state should support Oregon Health Sciences
University in its efforts to continue to grow as a research power
and an economic engine. Biomedical and technology research is
necessary to create intellectual property, which serves as the
raw material for biotechnology companies. The state should assist
Oregon Health Sciences University in securing the needed
infrastructure to attain a critical mass of research talent in
order to maximize the number of commercially viable discoveries.
  ' (d) There is a limited window of opportunity to capitalize on
the surge in biotechnology growth, stemming from the completion
of the United States Human Genome Project.
  ' (4) It is the intent of the Legislative Assembly that the
Oregon Opportunity program benefit all Oregonians through
increased medical research and sustainable economic development
from biotechnology and related fields.
  ' (5) To maximize the benefits of low interest tax-exempt
bonds, costs of the Oregon Opportunity program may be financed
directly or indirectly by the state. + }
  '  { +  SECTION 5. + }  { + Oregon Health Sciences University
shall create the Oregon Opportunity program to usher in a new era
of breakthroughs in health care and biotechnology for Oregonians.
Through the program, the university shall invest in facilities,
endowments, research infrastructure, recruitment of scientists
and researchers, scholarships and programs including but not
limited to:
  ' (1) Research on cancer, heart disease, multiple sclerosis,
Parkinson's disease and Alzheimer's disease;
  ' (2) Children's health and women's health;
  ' (3) Hearing research;
  ' (4) Advanced eye research;
  ' (5) Aging research;
  ' (6) Rural health initiatives; and
  ' (7) Other health care, biotechnology and related
research. + }
  '  { +  SECTION 6. + }  { + (1) The State Treasurer, pursuant
to this section and ORS 286.031 and 288.805 to 288.945, with the
written concurrence of the president of Oregon Health Sciences
University, shall issue, sell and deliver revenue bonds in one or
more series for the purposes of directly or indirectly financing
the Oregon Opportunity program. Revenue bonds issued under this
section shall be issued by the State Treasurer and shall have
such terms and conditions as the State Treasurer shall determine.
  ' (2) The State Treasurer shall issue the revenue bonds
authorized by this section as soon as practicable after the
operative date of this section on a date that is selected by
mutual agreement of the State Treasurer and Oregon Health
Sciences University.
  ' (3) Notwithstanding ORS 286.505 to 286.545, revenue bonds
shall be issued under this section in an aggregate principal
amount that produces net proceeds for the Oregon Opportunity
program in an amount that is not less than $200 million.
  ' (4) The State Treasurer may issue bonds:
  ' (a) On a federally tax-exempt basis; or
  ' (b) In accordance with ORS 286.038, the interest on which is
taxable for federal income tax purposes.
  ' (5) In connection with the issuance of revenue bonds under
this section, the State Treasurer or the Director of the Oregon
Department of Administrative Services, if so directed by the
State Treasurer, may:
  ' (a) Establish the maturity schedules, interest rates,
including fixed or adjustable interest rate terms, tender or
redemption provisions, provisions for capitalized interest and
other terms of any revenue bonds issued under this section;
 
  ' (b) Provide that revenue bonds may be issued in different
series and that each series may be secured by a lien on and
pledge of payments under the Master Settlement Agreement that is
superior to, subordinate to or on parity with the lien of the
pledge securing other series of revenue bonds issued under this
section;
  ' (c) Obtain credit enhancement to provide additional security
or liquidity for revenue bonds issued under this section, or to
provide funding for all or any portion of any debt service
reserve account established with respect to such bonds. The
state's obligations under any credit enhancement shall be payable
from the payments under the Master Settlement Agreement that are
pledged thereto;
  ' (d) Appoint bond counsel in accordance with ORS 288.523 and a
bond trustee and retain the services of financial consultants,
underwriters, paying agents, legal counsel and other professional
service providers in connection with the issuance and
administration of such revenue bonds;
  ' (e) Enter into security documents with a bond trustee and
deposit funds with the bond trustee for the benefit of
bondholders and the providers of credit enhancement;
  ' (f) Enter into covenants for the benefit of bondholders and
the providers of credit enhancement to improve the security of
bondholders or providers of credit enhancement, or to maintain
the tax exempt status of interest payable on bonds or credit
enhancement. Such covenants may include, but are not limited to,
covenants regarding the issuance of additional bonds, the
collection and application of payments under the Master
Settlement Agreement and the priority of payment of the revenue
bonds;
  ' (g) Establish one or more debt service reserve accounts for
the purpose of paying bond debt service, which debt service
accounts may be funded out of the proceeds derived from the
issuance and sale of such bonds or directly from payments under
the Master Settlement Agreement;
  ' (h) Establish such funds or accounts as may be necessary or
desirable to secure and pay for such revenue bonds or for any
purpose reasonably related thereto; and
  ' (i) Apply the proceeds of the revenue bonds to pay any costs
and expenses of issuing or administering the revenue bonds.
  ' (6) Revenue bonds issued under this section are payable from
moneys paid to the state under the Master Settlement Agreement.
The State Treasurer may irrevocably pledge and assign all or any
portion of moneys paid to the state under the Master Settlement
Agreement to secure revenue bonds and credit enhancements.
  ' (7) Revenue bonds issued under this section do not constitute
a debt or general obligation of this state, Oregon Health
Sciences University or any other political subdivision of this
state but are payable from moneys paid to the state under the
Master Settlement Agreement and secured solely by moneys paid to
the state under the Master Settlement Agreement, by amounts in
any debt service reserve account established with respect to
revenue bonds issued under this section or by any credit
enhancement obtained for the revenue bonds issued under this
section.
  ' (8) Oregon Health Sciences University shall have no
obligation to pay debt service on any revenue bonds issued under
this section. A holder of bonds or other similar obligations
issued under this section may not have the right to compel the
exercise of the ad valorem taxing power of the state to pay
principal and interest on such bonds or other similar
obligations.
  ' (9)(a) The holders of revenue bonds issued under this section
shall, upon the issuance of such revenue bonds, have a perfected
lien on the payments under the Master Settlement Agreement
pledged and assigned to the payment of such bonds. Such lien and
pledge shall be valid and binding from the date of issuance of
the first series of revenue bonds and shall automatically be
perfected without physical delivery, filing or other act. The
lien and pledge shall be superior to all subsequent claims or
liens on the payments under the Master Settlement Agreement.
  ' (b) Notwithstanding paragraph (a) of this subsection, the
security documents for any series of revenue bonds issued under
this section shall establish the priority of the related series
among the liens perfected under paragraph (a) of this subsection
on the payments under the Master Settlement Agreement.
  ' (10) The payment of debt service on revenue bonds issued
under this section shall be in addition to and not in lieu of any
other appropriation to Oregon Health Sciences University.
  ' (11) As long as any revenue bonds issued under this section
are outstanding, the provisions of this section and the
provisions of any security documents shall be deemed to be
contracts between the state and holders of such bonds. The state:
  ' (a) Shall enforce the provisions of the Master Settlement
Agreement to the full extent permitted by its terms;
  ' (b) May not, except as permitted by the terms of the revenue
bonds, amend the Master Settlement Agreement if such amendment or
action would substantially impair the rights of the bondholders;
and
  ' (c) May not create any lien or encumbrance on payments under
the Master Settlement Agreement that is superior to the liens of
the pledges authorized by subsection (9) of this section.
  ' (12) Proceeds from the sale of revenue bonds under this
section are for the purpose of financing the Oregon Opportunity
program and may be used for any of the following:
  ' (a) Financing capital costs of the Oregon Opportunity
program.
  ' (b) Financing noncapital costs of the Oregon Opportunity
program.
  ' (c) Paying the cost of issuing the bonds.
  ' (d) Financing capital costs of Oregon Health Sciences
University unrelated to the Oregon Opportunity program if Oregon
Health Sciences University demonstrates to the State Treasurer
that Oregon Health Sciences University will use an equivalent
amount of moneys to pay capital costs or noncapital costs of the
Oregon Opportunity program and if the State Treasurer determines
that such financing will permit the revenue bonds issued under
this section to be issued on a federally tax-exempt basis and
that the state will thereby achieve substantial savings on
interest rates.
  ' (13) Oregon Health Sciences University shall prepare an
annual report that outlines expenditures authorized in subsection
(12) of this section. Oregon Health Sciences University shall
submit the report to the State Treasurer. + }
  '  { +  SECTION 7. + }  { + (1) The Oregon Opportunity Fund is
established in the State Treasury separate and distinct from the
General Fund.  The net proceeds from the sale of revenue bonds
issued under section 6 of this 2001 Act shall be credited to the
Oregon Opportunity Fund. Investment earnings received on moneys
in the Oregon Opportunity Fund shall be credited to the Oregon
Opportunity Fund.
  ' (2) All moneys credited to the Oregon Opportunity Fund are
continuously appropriated to Oregon Health Sciences University
for payment of capital costs and noncapital costs of the Oregon
Opportunity program and for payment of any bond-related costs
other than debt service.
  ' (3) Amounts in the Oregon Opportunity Fund shall be promptly
disbursed to Oregon Health Sciences University by the State
Treasurer upon receipt of a written request for disbursal. + }
  '  { +  SECTION 8. + }  { + Sections 6 and 7 of this 2001 Act
become operative on January 1, 2002. + }
 
  '  { +  SECTION 9. + }  { + On the effective date of House
Joint Resolution 46 (2001), sections 6, 7 and 8 of this 2001 Act
are repealed. + }
  '  { +  SECTION 10. + }  { + (1) The State Treasurer, pursuant
to Article XI-L of the Oregon Constitution, with the written
concurrence of the president of Oregon Health Sciences
University, shall issue, sell and deliver general obligation
bonds in one or more series for the purposes of directly or
indirectly financing the Oregon Opportunity program. The State
Treasurer shall issue the general obligation bonds and shall
determine the terms and conditions.
  ' (2) The State Treasurer shall issue the general obligation
bonds authorized by this section as soon as practicable after the
operative date of this section on a date that is selected by
mutual agreement of the State Treasurer and Oregon Health
Sciences University.
  ' (3) Notwithstanding ORS 286.505 to 286.545, general
obligation bonds shall be issued under this section in an
aggregate principal amount that produces net proceeds for the
Oregon Opportunity program in an amount that is not less than
$200 million.
  ' (4) The State Treasurer may issue general obligation bonds:
  ' (a) On a federally tax-exempt basis; or
  ' (b) In accordance with ORS 286.038, the interest on which is
taxable for federal income tax purposes. + }
  '  { +  SECTION 11. + }  { + Sections 9 and 10 of this 2001 Act
do not become operative unless the amendment to the Oregon
Constitution proposed by House Joint Resolution 46 (2001) is
approved by the people at a special election held throughout this
state on November 6, 2001. Sections 9 and 10 of this 2001 Act
become operative on the effective date of House Joint Resolution
46 (2001). + }
  '  { +  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 July 1, 2001. + } ' .
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