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 3248
A-Engrossed
Senate Bill 832
Ordered by the Senate March 26
Including Senate Amendments dated March 26
Sponsored by Senator NELSON, Representative SIMMONS; Senators L
BEYER, BROWN, CARTER, CLARNO, DUNCAN, FERRIOLI, HARTUNG,
MESSERLE, Representatives DOYLE, GARDNER, HILL, JOHNSON,
MINNIS, G SMITH, STARR, WESTLUND, WITT
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.
Directs Oregon Health Sciences University to create Oregon
Opportunity program to capitalize on biotechnology opportunities.
Authorizes issuance of revenue bonds to be paid from moneys from
tobacco Master Settlement Agreement. Specifies that bond proceeds
are to be used for Oregon Opportunity program costs { + or
capital costs of Oregon Health Sciences University unrelated to
Oregon Opportunity program under specified conditions + }.
{ + Provides that, if House Joint Resolution 46 (2001)
passes, State Treasurer may issue general obligation bonds to
finance Oregon Opportunity program and authority to issue revenue
bonds to finance program is repealed. + }
Declares emergency, effective July 1, 2001.
A BILL FOR AN ACT
Relating to Oregon Health Sciences University; appropriating
money; and declaring an emergency.
Be It Enacted by the People of the State of Oregon:
+ } { + 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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