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
 
                           C-Engrossed
 
                         Senate Bill 832
                  Ordered by the Senate June 25
   Including Senate Amendments dated March 26 and April 16 and
                             June 25
 
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 - }   { + and Science + }
University to create Oregon Opportunity program to capitalize on
biotechnology opportunities. Requires Oregon Health
 { - Sciences - }   { + and Science + } University to dedicate
 { - at least - }   { + not less than + } five percent of
university's share of net proceeds of royalties and licenses
attributable to Oregon Opportunity program to improve medical
access for underserved persons and to promote further study of
public health, health care ethics and other topics.  { + Provides
exception. Requires university to dedicate not less than five
percent of university's share of net proceeds of royalties and
licenses attributable to Oregon Opportunity program to payment of
bond related costs. Provides exception. + } Establishes task
force to review impact of Oregon Opportunity program. 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 - }   { + and Science + } University
unrelated to Oregon Opportunity program under specified
conditions.
  Provides that, if House Joint Resolution   { - 46 - }
 { + 19 + } (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authority to issue revenue bonds to finance program is repealed.
   { +  Authorizes Oregon Health and Science University to create
entity that is exempt from federal income tax for purposes of
conducting clinical care and practice and for other purposes.
Specifies legal status of entity for purposes of certain other
statutory provisions. + }
  Declares emergency, effective July 1, 2001.
 
                        A BILL FOR AN ACT
 
 
Relating to Oregon Health Sciences University; creating new
  provisions; amending ORS 353.100; appropriating money; limiting
  expenditures; and declaring an emergency.
Be It Enacted by the People of the State of Oregon:
  SECTION 1.  { + Sections 2 to 18 of this 2001 Act are added to
and made a part of ORS chapter 353. + }
  SECTION 2.  { + Sections 2 to 18 of this 2001 Act shall be
known and may be cited as the Oregon Opportunity Act. + }
  SECTION 3.  { + As used in sections 2 to 18 of this 2001 Act:
  (1) 'Bond-related costs' means:
  (a) The costs and expenses of issuing, administering and
maintaining bonds issued under sections 2 to 18 of this 2001 Act
and the bond program under sections 2 to 18 of this 2001 Act,
including but not limited to:
  (A) Paying or redeeming the bonds;
  (B) Paying amounts due in connection with credit enhancement or
any reserve instruments; and
  (C) Paying the administrative costs and expenses of the State
Treasurer and the Oregon Department of Administrative Services,
including costs of consultants, attorneys and advisors retained
by the State Treasurer or the Oregon Department of Administrative
Services for the bonds or the bond program;
  (b) The costs of funding any bond reserves;
  (c) Capitalized interest for the bonds;
  (d) Rebates or penalties due to the United States in connection
with the bonds; and
  (e) Any other costs or expenses that the State Treasurer or the
Oregon Department of Administrative Services determines are
necessary or desirable in connection with issuing the bonds or
maintaining the bond program.
  (2) '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.
  (3) 'Indirect financing' means financing capital costs of
Oregon Health and Science University unrelated to the Oregon
Opportunity program so that an equivalent amount of moneys may be
used to pay capital costs and noncapital costs of the Oregon
Opportunity program.
  (4) '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
products manufacturers.
  (5) '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.
  (6) 'Oregon Opportunity program' means the program created by
Oregon Health and Science University pursuant to section 5 of
this 2001 Act. + }
  SECTION 4.  { + (1) The purpose of sections 2 to 18 of this
2001 Act is to directly or indirectly finance Oregon Health and
Science 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 and Science 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 and Science
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 and Science 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:
  (a) Oregon Health and Science University pursue the Oregon
Opportunity program in a manner that is consistent with the
public missions stated in ORS 353.030 (2), which directs the
university to strive for excellence in education, research,
clinical practice, scholarship and community service while
maintaining compassion, personal and institutional integrity and
leadership in carrying out its missions;
  (b) The Oregon Opportunity program benefit all Oregonians
through increased medical research and sustainable economic
development from biotechnology and related fields; and
  (c) The State Treasurer shall issue pursuant to a grant
agreement, as soon as practicable, revenue bonds during the
2001-2003 and 2003-2005 biennia in an aggregate principal amount
that produces net proceeds for the Oregon Opportunity program in
an amount equal to $165 million plus the amount of any costs and
expenses of issuing the bonds.
  (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 4a. If Article XI-L of the Oregon Constitution proposed
by House Joint Resolution 19 (2001) is approved by the people at
a special election held throughout this state on the same date as
the next biennial primary election, section 4 of this 2001 Act is
amended to read:
   { +  Sec. 4. + } (1) The purpose of sections 2 to 18 of this
2001 Act is to directly or indirectly finance Oregon Health and
Science 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 and Science 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 and Science
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 and Science 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:
  (a) Oregon Health and Science University pursue the Oregon
Opportunity program in a manner that is consistent with the
public missions stated in ORS 353.030 (2), which directs the
university to strive for excellence in education, research,
clinical practice, scholarship and community service while
maintaining compassion, personal and institutional integrity and
leadership in carrying out its missions;
  (b) The Oregon Opportunity program benefit all Oregonians
through increased medical research and sustainable economic
development from biotechnology and related fields; and
  (c) The State Treasurer shall issue pursuant to a grant
agreement, as soon as practicable,   { - revenue - }  { +
general obligation + } bonds during the 2001-2003 and 2003-2005
biennia in an aggregate principal amount that produces net
proceeds for the Oregon Opportunity program in an amount equal to
 { - $165 - }  { +  $200 + } million plus the amount of any costs
and expenses of issuing the bonds.
  (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.  { + (1) Oregon Health and Science 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:
  (a) Research on cancer, heart disease, multiple sclerosis,
Parkinson's disease and Alzheimer's disease;
  (b) Research on autism spectrum disorder;
  (c) Children's health and women's health;
  (d) Hearing research;
  (e) Advanced eye research;
  (f) Aging research;
  (g) Rural health initiatives;
  (h) Research on public health, health care ethics, health
information science and health outcomes; and
  (i) Other health care, biotechnology and related research.
  (2) Oregon Health and Science University shall dedicate:
  (a) Not less than five percent of the university's share of the
net proceeds of royalties and licenses attributable to the Oregon
Opportunity program to meeting the university's missions of
providing access to medical services to people who are
underserved and promoting further study in the areas of public
health, health care ethics, health information science and health
outcomes. The proceeds shall be distributed as follows:
  (A) 50 percent to providing access to medical services to
people who are underserved; and
 
  (B) 50 percent to establishing endowments to support research
on public health, health care ethics, health information science
and health outcomes.
  (b) Not less than five percent of the university's share of the
net proceeds of royalties and licenses attributable to the Oregon
Opportunity program to the payment of bond-related costs then due
and payable by the state and deposit those amounts into the
Oregon Health and Science University Bond Fund established in
section 14 of this 2001 Act. If the dedicated amount exceeds the
amount necessary to pay bond-related costs, the excess shall be
deposited in the General Fund.
  (3) Notwithstanding subsection (2) of this section, any
obligation of the university to dedicate or distribute a share of
the net proceeds of royalties and licenses attributable to the
Oregon Opportunity program under subsection (2) of this section:
  (a) Shall be subordinate to the university's obligation to pay
obligations issued under the university's Master Trust Indenture,
dated December 1, 1995, as amended or supplemented; and
  (b) Does not constitute a lien on the gross revenues of the
university as 'Lien' and 'Gross Revenues' are defined in the
Master Trust Indenture. + }
  SECTION 6.  { + (1) There is established a task force at Oregon
Health and Science University to review the impact of the Oregon
Opportunity program on the ability of the university to carry out
its missions of teaching, patient care, research and community
service.
  (2) The review by the task force shall include but not be
limited to:
  (a) Whether the Oregon Opportunity program competes with or
enhances the teaching, patient care, research and community
service missions of the university;
  (b) Whether new discoveries increase the cost of health care or
make health care more efficient;
  (c) Whether there are additional economic implications of
technological advances in health care;
  (d) How access to high-quality clinical care can be maintained
for Oregon's vulnerable populations during the implementation of
the Oregon Opportunity program;
  (e) Whether the university's high standard of clinical care and
the university's commitment to vulnerable populations is
compromised or enhanced; and
  (f) Whether animal research at the university is being done in
an ethical and humane manner.
  (3) The task force shall consist of:
  (a) Two members who are members of the House of
Representatives, appointed by the Speaker of the House of
Representatives;
  (b) Two members who are members of the Senate, appointed by the
President of the Senate;
  (c) Six members from the university, appointed by the president
of the university, who represent:
  (A) The ethics center;
  (B) Academic programs;
  (C) Patient care programs;
  (D) Community service and outreach programs;
  (E) Financial administration; and
  (F) Research programs; and
  (d) Three public members, appointed by the Governor, who
represent:
  (A) The public health and health policy community;
  (B) Advocates for persons who are medically underserved; and
  (C) The medical community.
  (4) The term of office of each legislative member is two years
and the term of office of each nonlegislative member is four
years. Each member serves at the pleasure of the appointing
authority. Before the expiration of the term of a member, the
appointing authority shall appoint a successor. A member is
eligible for reappointment. If there is a vacancy for any cause,
the appointing authority shall make an appointment to become
immediately effective for the unexpired term.
  (5) A nonlegislative member of the task force is entitled to
compensation and expenses as provided in ORS 292.495. A
legislative member of the task force is entitled to compensation
and expenses as provided in ORS 171.072 from funds appropriated
to the Legislative Assembly for such purposes.
  (6) The task force shall select one of its members as
chairperson and another as vice chairperson, for such terms and
with duties and powers necessary for the performance of the
functions of such offices as the task force determines.
  (7) A majority of the members of the task force constitutes a
quorum for the transaction of business.
  (8) The task force shall schedule public hearings for the
purpose of gathering information from interested parties. The
task force shall meet at times and places specified by the call
of the chairperson or of a majority of the members of the task
force.
  (9) The university shall provide staff support to the task
force.
  (10) Prior to July 1 of each even-numbered year, the task force
shall report its findings from the review to the Governor and any
interim legislative committees on human resources. + }
  SECTION 7.  { + Notwithstanding the term of office specified by
section 6 of this 2001 Act, of the members first appointed to the
task force under section 6 of this 2001 Act:
  (1) By the president of the university:
  (a) Three shall serve for terms ending June 30, 2003.
  (b) Three shall serve for terms ending June 30, 2005.
  (2) By the Governor:
  (a) One shall serve for a term ending June 30, 2003.
  (b) Two shall serve for terms ending June 30, 2005. + }
  SECTION 8.  { + (1) The State Treasurer, pursuant to this
section and ORS 286.031 and 288.805 to 288.945, and after the
grant agreement described in subsection (13) of this section is
entered into, may issue, sell and deliver revenue bonds in one or
more series at different times during the 2001-2003 and 2003-2005
biennia 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 may issue the revenue bonds authorized
by this section as soon as practicable after the operative date
of this section and after the grant agreement described in
subsection (13) of this section is entered into, on a date that
is selected by mutual agreement of the State Treasurer and Oregon
Health and Science University.
  (3) The State Treasurer may issue revenue bonds on a federally
tax-exempt basis.
  (4) In connection with the issuance of revenue bonds under this
section, the State Treasurer or the Director of the Oregon
Department of Administrative Services, as 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 and enter into appropriate contracts with bond
counsel in accordance with ORS 288.523 and a bond trustee and
retain the services and enter into appropriate contracts for
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;
  (i) Apply the proceeds of the revenue bonds to pay any costs
and expenses of issuing or administering the revenue bonds; and
  (j) Establish a process to allow, if prepayments are made under
the Master Settlement Agreement by any of the United States
tobacco products manufacturers, the state to retain any excess
funds in an account held by the bond trustee or an account held
by the State Treasurer, and to apply the excess funds to debt
service on bonds issued under this section in future years
corresponding to the prepayment period.
  (5) 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 moneys paid
to the state under the Master Settlement Agreement to secure
revenue bonds and credit enhancements. The pledge and assignment
may include a direction by the State Treasurer to the escrow
agent appointed under the Master Settlement Agreement or to any
other party that may be designated to distribute moneys payable
to the state under the Master Settlement Agreement that all
moneys shall be paid to a bond trustee, escrow agent or other
party appointed by the State Treasurer or the Director of the
Oregon Department of Administrative Services, as directed by the
State Treasurer, to receive the moneys as security for, and for
the benefit of the holders of, the revenue bonds.
  (6) Revenue bonds issued under this section do not constitute a
debt or general obligation of this state, Oregon Health and
Science 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.
  (7) Except as described in subsection (13) of this section and
section 5 (2)(b) of this 2001 Act, Oregon Health and Science
University shall have no obligation to pay debt service on any
revenue bonds issued under this section or to pay any
bond-related costs. 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.
  (8)(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.
  (9) Notwithstanding ORS 286.505 to 286.545, during the
2001-2003 and 2003-2005 biennia revenue bonds may be issued under
this section in an aggregate principal amount that produces net
proceeds for the Oregon Opportunity program in an amount that is
equal to the sum of $165 million plus the amount of any costs and
expenses of issuing the bonds as determined by the State
Treasurer. Any revenue bonds issued under this section shall be
repaid over a period of 20 years or less.
  (10) 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;
  (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 (8) of this section; and
  (d) May not give any force or effect to any statute or
initiative or referendum measure approved by the electors of the
state if to do so would impair existing covenants made with the
holders of existing revenue bonds or would impair other
obligations or agreements regarding the distribution and
allocation of payments under the Master Settlement Agreement
pledged to secure the revenue bonds.
  (11) 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, but only to the extent that bond counsel determines the
financing of such noncapital costs will not adversely affect the
federally tax-exempt status of the revenue bonds under the
Internal Revenue Code, as amended.
  (c) Paying bond-related costs.
  (d) Indirectly financing capital costs of Oregon Health and
Science University unrelated to the Oregon Opportunity program if
Oregon Health and Science University demonstrates to the State
Treasurer that Oregon Health and Science University will use an
equivalent amount of moneys to pay capital costs and 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.
  (12) Oregon Health and Science University shall prepare an
annual report that outlines expenditures authorized in subsection
(11) of this section. Oregon Health and Science University shall
submit the report to the State Treasurer.
  (13) Prior to the initial issuance of any revenue bonds under
this section, Oregon Health and Science University and the State
Treasurer shall enter into a grant agreement in which the
university agrees to:
  (a) Comply with all requirements to protect the tax-exempt
status of any revenue bonds issued under this section;
  (b) Dedicate a percentage of the university's share of the net
proceeds of royalties and licenses attributable to the Oregon
Opportunity program pursuant to section 5 (2)(b) and (3) of this
2001 Act; and
  (c) Other terms and conditions as the State Treasurer may
require. + }
  SECTION 9.  { + Section 8 of this 2001 Act becomes operative on
June 1, 2002. + }
  SECTION 10.  { + Prior to the operative dates of sections 8 and
18 of this 2001 Act, the State Treasurer and Oregon Health and
Science University shall take any necessary action, including
preparing and entering into the grant agreements described in
section 8 (13) of this 2001 Act and section 18 (9) of this 2001
Act, to prepare for the issuance, sale and delivery of:
  (1) Revenue bonds under section 8 of this 2001 Act after the
operative date of section 8 of this 2001 Act; and
  (2) General obligation bonds under section 18 of this 2001 Act
after the operative date of section 18 of this 2001 Act. + }
  SECTION 11.  { + On the effective date of House Joint
Resolution 19 (2001), section 8 of this 2001 Act is repealed. + }
  SECTION 12.  { + (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 8 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) The Oregon Opportunity Fund is continuously appropriated to
the Oregon Department of Administrative Services for payment
pursuant to the grant agreement under section 8 (13) of this 2001
Act to Oregon Health and Science University for financing the
Oregon Opportunity program as specified in section 8 (11) of this
2001 Act.
  (3) The Oregon Department of Administrative Services, as
directed by the State Treasurer in accordance with the grant
agreement, shall disburse amounts in the Oregon Opportunity Fund
to Oregon Health and Science University. + }
  SECTION 13. If Article XI-L of the Oregon Constitution proposed
by House Joint Resolution 19 (2001) is approved by the people at
a special election held throughout this state on the same date as
the next biennial primary election, section 12 of this 2001 Act
is amended to read:
   { +  Sec. 12. + } (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 - }  { +  general obligation + } bonds issued under
section   { - 8 - }  { +  18 + } 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) The Oregon Opportunity Fund is continuously appropriated to
the Oregon Department of Administrative Services for payment
pursuant to the grant agreement under section   { - 8 (14) - }
 { +  18 (9) + } of this 2001 Act to Oregon Health and Science
University for financing the Oregon Opportunity program as
specified in section
  { - 8 (11) - }  { +  18 (7) + } of this 2001 Act.
  (3) The Oregon Department of Administrative Services, as
directed by the State Treasurer in accordance with the grant
agreement, shall disburse amounts in the Oregon Opportunity Fund
to Oregon Health and Science University.
  SECTION 14.  { + (1) The Oregon Health and Science University
Bond Fund is established in the State Treasury separate and
distinct from the General Fund. The Oregon Health and Science
University Bond Fund shall consist of:
  (a) The amounts of revenues from the Master Settlement
Agreement as determined by the Oregon Department of
Administrative Services, under the direction of the State
Treasurer that are necessary to pay principal, interest and
premium scheduled to be paid in that fiscal year on the revenue
bonds issued under section 8 of this 2001 Act;
  (b) The amounts deposited pursuant to the grant agreement under
section 8 (13) of this 2001 Act;
  (c) Any appropriated or allocated funds;
  (d) Investment earnings received on moneys in the Oregon Health
and Science University Bond Fund; and
  (e) The amounts of accrued interest paid on the bonds upon bond
settlement.
  (2) The Oregon Health and Science University Bond Fund is
continuously appropriated to the Oregon Department of
Administrative Services, as directed by the State Treasurer, for
paying, when due, the principal of and the interest and premium,
if any, on outstanding revenue bonds, for funding revenue bond
reserves and for paying amounts due in connection with any
instrument authorized by section 8 (4)(c) of this 2001 Act.
  (3) The Oregon Department of Administrative Services shall use
amounts in the Oregon Health and Science University Bond Fund to
pay, when due, the principal and the interest and premium, if
any, on any revenue bonds, to fund reserves and to pay amounts
due under instruments authorized by section 8 (4)(c) of this 2001
Act. + }
  SECTION 15. If Article XI-L of the Oregon Constitution proposed
by House Joint Resolution 19 (2001) is approved by the people at
a special election held throughout this state on the same date as
the next biennial primary election, section 14 of this 2001 Act
is amended to read:
   { +  Sec. 14. + } (1) The Oregon Health and Science University
Bond Fund is established in the State Treasury separate and
distinct from the General Fund. The Oregon Health and Science
University Bond Fund shall consist of:
  (a) The amounts of revenues from the Master Settlement
Agreement as determined by the Oregon Department of
Administrative Services, under the direction of the State
Treasurer that are necessary to pay principal, interest and
premium scheduled to be paid in that fiscal year on the
 { - revenue - }  { +  general obligation + } bonds issued under
section   { - 8 - }  { +  18 + } of this 2001 Act;
  (b) The amounts deposited pursuant to the grant agreement under
section   { - 8 (13) - }  { +  18 (9) + } of this 2001 Act;
  (c) Any appropriated or allocated funds;
  (d) Investment earnings received on moneys in the Oregon Health
and Science University Bond Fund; and
  (e) The amounts of accrued interest paid on the bonds upon bond
settlement.
  (2) The Oregon Health and Science University Bond Fund is
continuously appropriated to the Oregon Department of
Administrative Services, as directed by the State Treasurer, for
paying, when due, the principal of and the interest and premium,
if any, on outstanding   { - revenue - }  { +  general
obligation + } bonds, for funding   { - revenue - }  { +  general
obligation + } bond reserves and for paying amounts due in
connection with any instrument authorized by section   { - 8
(4)(c) - }  { +  18 (4)(c) + } of this 2001 Act.
  (3) The Oregon Department of Administrative Services shall use
amounts in the Oregon Health and Science University Bond Fund to
pay, when due, the principal and the interest and premium, if
any, on any   { - revenue - }  { +  general obligation + } bonds,
to fund reserves and to pay amounts due under instruments
authorized by section   { - 8 (4)(c) - }  { +  18 (4)(c) + } of
this 2001 Act.
  SECTION 16.  { + (1) The Oregon Health and Science University
Bond Administrative Fund is established in the State Treasury
separate and distinct from the General Fund. The Oregon Health
and Science University Bond Administrative Fund shall consist of:
  (a) The amounts of unobligated net revenue bond proceeds as
determined by the Oregon Department of Administrative Services,
after depositing required amounts in the Oregon Opportunity Fund
and the Oregon Health and Science University Bond Fund;
  (b) The proceeds of any revenue bonds issued to pay
bond-related costs;
  (c) Any appropriated or allocated funds; and
  (d) Investment earnings received on moneys in the Oregon Health
and Science University Bond Administrative Fund.
  (2) The Oregon Health and Science University Bond
Administrative Fund is continuously appropriated to the Oregon
Department of Administrative Services, as directed by the State
Treasurer, for paying costs and expenses of issuing the revenue
bonds issued under section 8 of this 2001 Act.
  (3) The Oregon Department of Administrative Services may use
amounts in the Oregon Health and Science University Bond
Administrative Fund to pay costs and expenses of issuing the
revenue bonds. Amounts in the fund shall be disbursed upon the
written request of the Director of the Oregon Department of
Administrative Services. + }
  SECTION 17. If Article XI-L of the Oregon Constitution proposed
by House Joint Resolution 19 (2001) is approved by the people at
a special election held throughout this state on the same date as
the next biennial primary election, section 16 of this 2001 Act
is amended to read:
   { +  Sec. 16. + } (1) The Oregon Health and Science University
Bond Administrative Fund is established in the State Treasury
separate and distinct from the General Fund. The Oregon Health
and Science University Bond Administrative Fund shall consist of:
  (a) The amounts of unobligated net   { - revenue - }  { +
general obligation + } bond proceeds as determined by the Oregon
Department of Administrative Services, after depositing required
amounts in the Oregon Opportunity Fund and the Oregon Health and
Science University Bond Fund;
  (b) The proceeds of any   { - revenue - }  { +  general
obligation + } bonds issued to pay bond-related costs;
  (c) Any appropriated or allocated funds; and
  (d) Investment earnings received on moneys in the Oregon Health
and Science University Bond Administrative Fund.
  (2) The Oregon Health and Science University Bond
Administrative Fund is continuously appropriated to the Oregon
Department of Administrative Services, as directed by the State
Treasurer, for paying costs and expenses of issuing the
 { - revenue - }  { +  general obligation + } bonds issued under
section   { - 8 - }  { +  18 + } of this 2001 Act.
  (3) The Oregon Department of Administrative Services may use
amounts in the Oregon Health and Science University Bond
Administrative Fund to pay costs and expenses of issuing the
 
 
  { - revenue - }  { +  general obligation + } bonds. Amounts in
the fund shall be disbursed upon the written request of the
Director of the Oregon Department of Administrative Services.
  SECTION 18.  { + (1) The State Treasurer, pursuant to Article
XI-L of the Oregon Constitution, after the grant agreement
described in subsection (9) of this section is entered into, may
issue, sell and deliver general obligation bonds in one or more
series at different times during the 2001-2003 and 2003-2005
biennia for the purposes of directly or indirectly financing the
capital costs of the Oregon Opportunity program. The State
Treasurer may also issue general obligation or revenue refunding
bonds to refund general obligation bonds issued under this
section. The State Treasurer shall issue the general obligation
bonds and shall determine the terms and conditions.
  (2) The State Treasurer may issue the general obligation bonds
authorized by this section as soon as practicable after the
operative date of this section, and after entering into the grant
agreement described in subsection (9) of this section, on a date
that is selected by mutual agreement of the State Treasurer and
Oregon Health and Science University.
  (3) The State Treasurer may issue general obligation bonds on a
federally tax-exempt basis.
  (4) In connection with the issuance of general obligation bonds
under this section, the State Treasurer or the Director of the
Oregon Department of Administrative Services, as 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 general obligation bonds issued under this section;
  (b) Provide that general obligation bonds may be issued in
different series and at different times, subject to subsection
(2) of this section;
  (c) Obtain credit enhancement to provide additional security or
liquidity for general obligation 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;
  (d) Appoint and enter into appropriate contracts with bond
counsel in accordance with ORS 288.523 and a bond trustee and
retain and enter into appropriate contracts for the services of
financial consultants, underwriters, paying agents, legal counsel
and other professional service providers in connection with the
issuance and administration of such general obligation 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, and the
priority of payment of the general obligation 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;
  (h) Establish such funds or accounts as may be necessary or
desirable to secure and pay for such general obligation bonds or
for any purpose reasonably related thereto;
  (i) Apply the proceeds of the general obligation bonds to pay
any costs and expenses of issuing or administering the general
obligation bonds; and
  (j) Establish a process to allow, if prepayments are made under
the Master Settlement Agreement by any of the United States
tobacco products manufacturers, the state to retain any excess
funds in a reserve account held by the bond trustee or an account
held by the State Treasurer, and to apply the excess funds to
debt service on bonds issued under this section in future years
corresponding to the prepayment period.
  (5) Except as described in subsection (9) of this section and
section 5 (2)(b) of this 2001 Act, Oregon Health and Science
University shall have no obligation to pay debt service on any
general obligation bonds issued under this section or to pay any
bond-related costs. 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.
  (6) Notwithstanding ORS 286.505 to 286.545, general obligation
bonds may be issued under this section during the 2001-2003 and
2003-2005 biennia in an aggregate principal amount that produces
net proceeds for the Oregon Health and Science University in an
amount that equals the sum of $200 million plus the amount of any
costs and expenses of issuing the bonds as determined by the
State Treasurer. Any general obligation bonds issued under this
section shall be repaid over a period of 20 years or less.
  (7)(a) Proceeds from the sale of general obligation 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) Paying bond-related costs.
  (C) Indirectly financing capital costs of Oregon Health and
Science University unrelated to the Oregon Opportunity program if
Oregon Health and Science University demonstrates to the State
Treasurer that Oregon Health and Science University will use an
equivalent amount of moneys to pay capital costs and noncapital
costs of the Oregon Opportunity program and if the State
Treasurer determines that such financing will permit the general
obligation 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.
  (b) Proceeds from the sale of general obligation bonds under
this section may not be used for operating costs.
  (8) Oregon Health and Science University shall prepare an
annual report that outlines expenditures authorized in subsection
(7) of this section. Oregon Health and Science University shall
submit the report to the State Treasurer.
  (9) Prior to the initial issuance of any general obligation
bonds under this section, Oregon Health and Science University
and the State Treasurer shall enter into a grant agreement in
which the university agrees to:
  (a) Comply with all requirements to protect the tax-exempt
status of any general obligation bonds issued under this section;
  (b) Dedicate a percentage of the university's share of the net
proceeds of royalties and licenses attributable to the Oregon
Opportunity program pursuant to section 5 (2)(b) and (3) of this
2001 Act; and
  (c) Other terms and conditions as the State Treasurer may
require. + }
  SECTION 19.  { + Notwithstanding any other law, the amount of
$1 is established for the biennium beginning July 1, 2001, as the
maximum limit for payment of expenses by the Oregon Department of
Administrative Services from the Oregon Opportunity Fund to
Oregon Health and Science University to finance the Oregon
Opportunity program. + }
  SECTION 20.  { + Notwithstanding any other law, the amount of
$1 is established for the biennium beginning July 1, 2001, as the
maximum limit for payment of expenses by the Oregon Department of
Administrative Services from the Oregon Health and Science
University Bond Fund for paying the principal of, and the
interest and premium on, outstanding revenue bonds, for funding
revenue bond reserves and for paying amounts due in connection
with any instrument authorized by section 8 (4)(c) of this 2001
Act. + }
  SECTION 21. If Article XI-L of the Oregon Constitution proposed
by House Joint Resolution 19 (2001) is approved by the people at
a special election held throughout this state on the same date as
the next biennial primary election, section 20 of this 2001 Act
is amended to read:
   { +  Sec. 20. + } Notwithstanding any other law, the amount of
$1 is established for the biennium beginning July 1, 2001, as the
maximum limit for payment of expenses by the Oregon Department of
Administrative Services from the Oregon Health and Science
University Bond Fund for paying the principal of, and the
interest and premium on, outstanding   { - revenue - }  { +
general obligation + } bonds, for funding   { - revenue - }
 { + general obligation + } bond reserves and for paying amounts
due in connection with any instrument authorized by section
 { - 8 (4)(c) - }  { +  18 (4)(c) + } of this 2001 Act.
  SECTION 22.  { + Notwithstanding any other law, the amount of
$1 is established for the biennium beginning July 1, 2001, as the
maximum limit for payment of expenses by the Oregon Department of
Administrative Services from the Oregon Health and Science
University Bond Administrative Fund for payment of bond-related
costs associated with revenue bonds issued under section 8 of
this 2001 Act. + }
  SECTION 23. If Article XI-L of the Oregon Constitution proposed
by House Joint Resolution 19 (2001) is approved by the people at
a special election held throughout this state on the same date as
the next biennial primary election, section 22 of this 2001 Act
is amended to read:
   { +  Sec. 22. + } Notwithstanding any other law, the amount of
$1 is established for the biennium beginning July 1, 2001, as the
maximum limit for payment of expenses by the Oregon Department of
Administrative Services from the Oregon Health and Science
University Bond Administrative Fund for payment of bond-related
costs associated with   { - revenue - }  { +  general
obligation + } bonds issued under section   { - 8 - }  { +
18 + } of this 2001 Act.
  SECTION 24.  { + (1) Section 18 of this 2001 Act does not
become operative unless the amendment to the Oregon Constitution
proposed by House Joint Resolution 19 (2001) is approved by the
people at a special election held throughout this state on the
same date as the next biennial primary election.
  (2) Section 18 of this 2001 Act and the amendments to sections
4, 12, 14, 16, 20 and 22 of this 2001 Act by sections 4a, 13, 15,
17, 21 and 23 of this 2001 Act become operative on the effective
date of House Joint Resolution 19 (2001). + }
  SECTION 25.  { + Section 26 of this 2001 Act is added to and
made a part of ORS chapter 353. + }
  SECTION 26.  { + (1) Pursuant to ORS 353.050, Oregon Health and
Science University may create and maintain an entity that is
exempt from federal income tax under section 501(c)(3) of the
Internal Revenue Code, as amended, for the purpose of conducting
clinical care and practice and advancing other university
missions by the faculty.
  (2) Any entity created by the university under subsection (1)
of this section shall be considered:
  (a) A public employer for purposes of ORS 236.605 to 236.640
and ORS chapter 238;
  (b) A unit of local government for purposes ORS 190.003 to
190.130;
  (c) A public provider of health care for purposes of ORS
192.525;
  (d) A public body for purposes of ORS 30.260 to 30.300 and
307.112;
  (e) A public agency for purposes of ORS 200.090; and
  (f) A public corporation for purposes of ORS 307.090. + }
  SECTION 27. ORS 353.100 is amended to read:
  353.100. (1) The provisions of ORS chapters 35, 190, 192, 244,
281 and 295 and ORS 30.260 to 30.460, 200.005 to 200.025, 200.045
to 200.090, 236.605 to 236.640, 243.650 to 243.782, 297.040,
307.090 and 307.112 shall apply to Oregon Health
  { - Sciences - }   { + and Science + } University under the
same terms as they apply to public bodies other than the state.
  (2) Except as otherwise provided by law, the provisions of ORS
chapters 182, 183, 240, 270, 273, 276, 279, 283, 291, 292, 293,
294 and 297 and ORS 180.060, 180.210 to 180.235, 184.305 to
184.345, 190.430, 190.480, 190.490, 192.105, 200.035, 236.380,
243.105 to 243.585, 243.696, 278.011 to 278.120, 278.315 to
278.415, 281.210 to 281.260, 282.010 to 282.150, 357.805 to
357.895 and 656.017 (2) shall not apply to the university { +  or
any not-for-profit organization or other entity, if the equity of
the entity is owned exclusively by the university, and if the
organization or entity is created by the university to advance
any of the university's statutory missions + }.
  (3)  { + The university, + } as a distinct governmental entity,
 { - the university - }   { + or any organization or entity
described in subsection (2) of this section + } shall not be
subject to any provision of law enacted after January 1, 1995,
with respect to any governmental entity, unless the provision
specifically provides that it applies to the university { +  or
to the organization or entity + }.
  SECTION 28.  { + 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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