72nd OREGON LEGISLATIVE ASSEMBLY--2003 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 1127
 
                         House Bill 2467
 
Sponsored by Representative G SMITH (at the request of House
  Special Task Force on Jobs and the Economy)
 
 
                             SUMMARY
 
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure as
introduced.
 
  Exempts certain economic development contracts from prior
review by Attorney General.
 
                        A BILL FOR AN ACT
Relating to Attorney General review of public contracts; amending
  ORS 285A.075, 285A.188, 285A.213, 285B.437, 285B.563, 291.047
  and 541.700.
Be It Enacted by the People of the State of Oregon:
  SECTION 1. ORS 291.047 is amended to read:
  291.047. (1)  { + Except as provided in subsection (7) of this
section, + } the Attorney General shall approve for legal
sufficiency all personal services contracts, all architectural
and engineering services contracts and all information technology
contracts calling for payment in excess of $75,000 entered into
by a state agency before any such contract becomes binding on the
State of Oregon and before any service may be performed or
payment may be made under the contract.
  (2)  { + Except as provided in subsection (7) of this
section, + } the Attorney General shall approve for legal
sufficiency all public contracts not subject to subsection (1) of
this section that are entered into by a state agency and that
provide for payment in excess of $100,000 before any such
contract becomes binding on the State of Oregon and before any
service may be performed or payment may be made under the
contract.
  (3) The Attorney General shall impose by rule requirements
necessary to carry out the provisions of this section. Such rules
shall include, but are not limited to, a requirement that state
agencies submit to the Attorney General procurement and other
contract documents for review of the anticipated contract before
a procurement of goods or services is publicly advertised if the
anticipated contract is reasonably expected to require review for
legal sufficiency. A state agency may request that the Attorney
General assist the agency in developing requests for proposals,
invitations to bid and requests for qualifications or information
that are suitable to the needs of the agency.
  (4) The Attorney General may exempt by rule classes of
contracts from the requirements of this section if the Attorney
General determines that the degree of risk assumed by state
 
agencies under such contracts is not materially reduced by legal
review of individual contracts within the class.
  (5) The Attorney General may, by rule, set forth a process to
exempt contracts or classes of contracts from the requirements of
this section when:
  (a) The contract is substantially composed of forms, terms or
conditions that have been preapproved by the Attorney General; or
  (b) Circumstances exist that create a substantial risk of loss,
damage, interruption of services or threat to public health or
safety and that require prompt execution of a contract to deal
with the risk.
  (6) Notwithstanding subsections (1) and (2) of this section,
the Attorney General may authorize services to be performed under
a contract described in subsection (1) or (2) of this section
before approval for legal sufficiency if the Attorney General
determines that the authorization will not result in undue risk
to this state. An authorization under this subsection shall be
limited to specific classes of contracts or to contracts for
specific agency programs. The Attorney General may condition an
authorization on a finding by the Director of the Oregon
Department of Administrative Services, or a designee of the
director, and by any other agency with a role in approving such
contracts that the contract administration practices of the
requesting agency are adequate to manage the proposed contract
and that the mission of the agency will be significantly impaired
without such authorization.
   { +  (7) Contracts with local governments, as defined in ORS
174.116, entered into pursuant to ORS 285A.075 (3), 285A.188,
285A.213, 285B.437 and 285B.563 are not subject to review by the
Attorney General under this section. + }
  SECTION 2. ORS 285A.075 is amended to read:
  285A.075. (1) The Economic and Community Development
Department, through research, promotion and coordination of
activities in this state, shall foster the most desirable growth
and geographical distribution of agriculture, industry and
commerce in the state. The department shall serve as a central
coordinating agency and clearinghouse for activities and
information concerning the resources and economy of the state.
  (2) The department shall have no regulatory power over the
activities of private persons. Its functions shall be solely
advisory, coordinative and promotional.
  (3) The department shall administer the state's participation
in the federal Community Development Block Grant funding program
authorized by 42 U.S.C. 5301 et seq. { +  An agreement to grant
Community Development Block Grant funds to a city or county is
not subject to review under ORS 291.047. + }
  (4) In order to accomplish the purposes of ORS chapters 285A
and 285B and ORS 329.905 to 329.975, the department may expend
moneys duly budgeted to pay the travel and various other expenses
of industrial or commercial site location agents, film or video
production location agents, business journal writers, elected
state officials or other state personnel whom the Director of the
Economic and Community Development Department determines may
promote the purposes of this subsection.
  (5) In accordance with applicable provisions of ORS 183.310 to
183.550, the department may adopt rules necessary for the
administration of laws that the department is charged with
administering.
  (6) ORS 276.428, 279.021, 279.310 to 279.323, 279.334, 279.336,
279.338, 279.340, 279.342, 279.348 to 279.363, 279.365, 279.545
to 279.650, 279.712, 279.826, 282.020, 282.050, 282.210, 282.220,
282.230 and 283.140 do not apply to the department's operation of
foreign trade offices outside the state.
  (7) Notwithstanding ORS 279.712, the department may enter into
contracts for personal services as necessary or appropriate to
 
carry out the duties, functions and powers vested in the
department by law.
  (8)(a) The department may contract directly with the Oregon
Downtown Development Association, or its successor entity, to
provide downtown development and redevelopment assistance and
similar services to municipalities in Oregon.
  (b) The department may contract directly with Rural Development
Initiatives, or its successor entity, to provide training,
technical assistance, planning assistance and other support and
services to municipalities in Oregon to build economic and
community development capacity.
  (c) Contracts entered into under this subsection are exempt
from the requirements of ORS chapter 279.
  (9) If the director determines that moneys are available, the
department may transfer funds from the Special Public Works Fund
created under ORS 285B.455 or from the Water Fund established
under ORS 285B.563 to a state agency to provide financial
assistance in the delivery of technical assistance or other
services to one or more water systems for evaluation of water
quality or services or for planning the improvement of water
quality or services. The department may structure the financial
assistance under this subsection in the form of an interagency
grant or loan or in any other manner the director considers
necessary or appropriate.
  SECTION 3. ORS 285A.188 is amended to read:
  285A.188. (1) As used in this section:
  (a) 'Environmental action' means activities undertaken to:
  (A) Determine if a release has occurred, if the release poses a
significant threat to human health or the environment or if
additional remedial actions may be required at the site;
  (B) Conduct a feasibility study;
  (C) Plan for remedial action or removal; or
  (D) Conduct a remedial action or removal at a site.
  (b) 'Facility,' 'hazardous substance,' 'release, ' ' remedial
action' and 'removal' have the meanings given those terms in ORS
465.200.
  (c) 'Substantial public benefit' includes, but is not limited
to:
  (A) The generation of funding or other resources facilitating
substantial remedial action at a facility in accordance with this
section;
  (B) A commitment to perform substantial remedial action at a
facility in accordance with this section;
  (C) Productive reuse of a vacant or abandoned industrial or
commercial facility; or
  (D) Development of a facility by a municipality or a nonprofit
organization to address an important public purpose.
  (2) There is created within the State Treasury a revolving fund
known as the Brownfields Redevelopment Fund, separate and
distinct from the General Fund. Interest earned by the fund shall
be credited to the fund. Moneys in the Brownfields Redevelopment
Fund shall be used to fund loans and grants for environmental
actions on properties that are brownfields, as defined in ORS
285A.185.
  (3)(a) Subject to paragraph (b) of this subsection, when making
a loan or grant for an environmental action, the Economic and
Community Development Department shall give priority to persons
who, at the time of applying for the loan or grant, are not
liable under ORS 465.255 for a release of a hazardous substance
at the property at which the environmental action is to be
conducted. No more than 40 percent of the total amount disbursed
from the Brownfields Redevelopment Fund in any biennium shall be
awarded to persons who are liable with respect to the subject
property under ORS 465.255. A person is not eligible to receive a
loan or grant from moneys in the Brownfields Redevelopment Fund
if the person has knowingly violated applicable laws or
regulations or has knowingly violated or failed to comply with an
order of the Department of Environmental Quality, if such action
or inaction has resulted in one or more of the following:
  (A) Contribution to or exacerbation of existing contamination
at the facility;
  (B) Release of a hazardous substance at the facility; or
  (C) Interference with necessary investigation or remedial
actions at the facility.
  (b) Notwithstanding paragraph (a) of this subsection:
  (A) When making a grant to a municipality, the department shall
give priority to municipalities that provide matching funds from
a loan under this section, from another source or from both.
  (B) When making a grant to an entity that is not a
municipality, the department shall require that:
  (i) The recipient is not liable for the subject property under
ORS 465.255;
  (ii) The environmental action provides a substantial public
benefit; and
  (iii) The recipient provides matching funds from a loan under
this section, from another source or from both.
  (c) The department may establish by rule circumstances in which
the department may waive or subsidize the interest on a
short-term loan.
  (4) When making a loan or grant for an environmental action,
the Economic and Community Development Department shall consider:
  (a) The extent to which actual or perceived contamination
prevents the property from being fully utilized;
  (b) The need for providing public assistance, after considering
the difficulty of obtaining financing from other sources or of
obtaining financing at reasonable rates and terms;
  (c) The degree to which redevelopment of the property provides
opportunity for achieving protection of human health or the
environment by reducing or eliminating the contamination of the
property and for contributing to the economic health and
diversity of the area;
  (d) The probability of the success of the intended use or the
degree to which redevelopment of the property provides a public
purpose following remediation of the property;
  (e) Compliance with the land use plan of the local government
with jurisdiction over the property; and
  (f) Endorsement from the local government with jurisdiction
over the property.
  (5) Before making a loan or grant decision pursuant to this
section, the Economic and Community Development Department shall
consult with the Department of Environmental Quality.
   { +  (6)(a) A contract to lend moneys from the Brownfields
Redevelopment Fund to a city or county is not subject to review
under ORS 291.047 provided the amount of the loan is less than
$10 million and the loan is secured by a general or limited tax
obligation of the city or county.
  (b) A contract to lend moneys from the Brownfields
Redevelopment Fund to a district as defined in ORS 174.116 is not
subject to review under ORS 291.047 provided the amount of the
loan is less than $5 million and the loan is secured by a general
or limited tax obligation of the district. + }
    { - (6) - }  { +  (7) + } The Economic and Community
Development Department shall adopt rules necessary to carry out
the requirements of this section. The Economic and Community
Development Department shall develop procedures to ensure that
activities for which loans or grants are made are consistent with
existing environmental cleanup laws and rules.
  SECTION 4. ORS 285A.213 is amended to read:
  285A.213. (1) There is established in the State Treasury,
separate and distinct from the General Fund, the Safe Drinking
Water Revolving Loan Fund. All moneys in the Safe Drinking Water
 
Revolving Loan Fund are continuously appropriated to the Economic
and Community Development Department.
  (2) The Economic and Community Development Department shall
administer the Safe Drinking Water Revolving Loan Fund in
accordance with a memorandum of understanding between the
department and the Department of Human Services.
  (3) The Safe Drinking Water Revolving Loan Fund shall consist
of:
  (a) Moneys transferred to the fund by the Department of Human
Services for purposes authorized by the memorandum of
understanding between the Department of Human Services and the
Economic and Community Development Department.
  (b) Moneys transferred to the fund by the federal government,
other state agencies or local governments.
  (c) Moneys transferred to the fund by the Legislative Assembly
or the Oregon Economic and Community Development Commission.
  (d) Proceeds from the sale of revenue bonds.
  (e) Repayment of financial assistance provided with moneys from
the fund.
  (f) Interest and other earnings on moneys in the fund.
  (4) Moneys in the Safe Drinking Water Revolving Loan Fund shall
be used to provide financial or other assistance to publicly
owned and privately owned water systems under the Safe Drinking
Water Act Amendments of 1996, P.L. 104-182, and rules of the
Economic and Community Development Department. As used in this
subsection, 'assistance' includes direct purchase by the Economic
and Community Development Department of goods or services related
to a water system project to the extent permitted by the
memorandum of understanding between the Economic and Community
Development Department and the Department of Human Services, the
Safe Drinking Water Act Amendments of 1996, and as authorized by
rules of the Economic and Community Development Department.
   { +  (5)(a) A contract to lend moneys from the Safe Drinking
Water Revolving Loan Fund to a city or county is not subject to
review under ORS 291.047 provided the amount of the loan is less
than $10 million and the loan is secured by a general or limited
tax obligation of the city or county.
  (b) A contract to lend moneys from the Safe Drinking Water
Revolving Loan Fund to a district as defined in ORS 174.116 is
not subject to review under ORS 291.047 provided the amount of
the loan is less than $5 million and the loan is secured by a
general or limited tax obligation of the district. + }
  SECTION 5. ORS 285B.437 is amended to read:
  285B.437. (1) If the Economic and Community Development
Department approves assistance from the Special Public Works Fund
for an infrastructure project, the department, on behalf of the
state, and the municipality may enter into a contract, which
shall set forth, among other matters:
  (a) An estimate of the reasonable cost of the infrastructure
project.
  (b) An agreement by the municipality to proceed expeditiously
with, and complete, the project in accordance with plans reviewed
and approved by the department.
  (c) A statement that the liability of the state under the
contract is contingent upon the availability of moneys in the
Special Public Works Fund for use in the infrastructure project.
  (d) Such other provisions as the department considers necessary
to insure expenditure of the moneys for the purposes set forth in
the approved application.
  (2) When the department approves financial assistance under ORS
285B.410 to 285B.479 for an infrastructure project, the
department shall pay moneys for the project from the Special
Public Works Fund in accordance with the terms of the contract.
  (3) The department shall determine and approve a maximum amount
of a loan for an infrastructure project under ORS 285B.410 to
 
285B.479 based upon a reasonable and prudent expectation of the
municipality's ability to repay any amount borrowed.
   { +  (4)(a) A contract to lend moneys from the Special Public
Works Fund to a city or county is not subject to review under ORS
291.047 provided the amount of the loan is less than $10 million
and the loan is secured by a general or limited tax obligation of
the city or county.
  (b) A contract to lend moneys from the Special Public Works
Fund to a municipality that is not a city or county is not
subject to review under ORS 291.047 provided the amount of the
loan is less than $5 million and the loan is secured by a general
or limited tax obligation of the municipality. + }
  SECTION 6. ORS 285B.563 is amended to read:
  285B.563. (1) There is established in the State Treasury,
separate and distinct from the General Fund, the Water Fund. All
moneys in the fund are continuously appropriated to the Economic
and Community Development Department to provide financing for
water projects, as described in ORS 285B.560 to 285B.599,
including the direct project management costs and for the purpose
specified in ORS 285A.075 (9).
  (2)(a) Moneys in the Water Fund may be obligated to water
projects.
  (b) Moneys shall be used primarily to make loans to
municipalities. The department may make a loan only if:
  (A) The municipality applying for the loan certifies to the
department that adequate funds will be available to repay the
loan; and
  (B) The department determines that the amount of the loan
applied for is based on a reasonable and prudent expectation of
the municipality's ability to repay the loan.
  (c) The department may award a grant only if a loan is not
feasible due to:
  (A) Financial hardship to the municipality, as determined by
the department, based on consideration of anticipated water
service charges or anticipated waste water service charges that
exceed the statewide average for such charges, the per capita
income of the municipality and such other factors as the
department by rule may establish; and
  (B) Special circumstances of the water project.
  (d) The department may determine the amount of grant or loan
funding on a case-by-case basis.
  (3) The moneys in the fund may also be used to assist the
department in selling revenue bonds on behalf of municipalities
in order to carry out the purposes of ORS 285B.560 to 285B.599.
  (4) With the approval of the State Treasurer, moneys in the
Water Fund may be invested as provided by ORS 293.701 to 293.820.
The earnings from such investments and other program income shall
be credited to the Water Fund.
  (5) The Water Fund shall consist of:
  (a) Moneys appropriated to the fund by the Legislative
Assembly.
  (b) Moneys transferred to the fund by the Economic and
Community Development Department from the Special Public Works
Fund created by ORS 285B.455.
  (c) Moneys transferred to the fund by the Water Resources
Commission from the Water Development Fund created by Article
XI-I(1) of the Oregon Constitution.
  (d) Moneys from any federal, state or other grants.
  (e) Proceeds of revenue bonds issued under ORS 285B.575.
  (f) Earnings on the fund.
  (6) The department shall administer the fund.
  (7) The department shall adopt rules and policies for the
administration of the fund. The department shall coordinate its
rulemaking regarding safe drinking water projects with the Water
Resources Department and the Department of Human Services. The
 
rules adopted under this subsection for safe drinking water
projects shall:
  (a) Require the installation of meters on all new service
connections to any distribution lines funded with moneys from the
fund or from the proceeds of revenue bonds issued under ORS
285B.572 to 285B.578.
  (b) Require a plan, to be adopted by a municipality receiving
financial assistance from the fund, for installation of meters on
all service connections throughout the drinking water system not
later than two years after the completion of a safe drinking
water project.
  (8)(a) The Economic and Community Development Department shall
manage the Water Fund and any expenditures from accounts in the
fund and transfers between accounts so that the fund value shall
be equal to at least 50 percent of lottery revenues actually
transferred to the fund plus interest on such amounts compounded
annually at five percent.
  (b) If necessary to ensure repayment of bonds issued under ORS
285B.560 to 285B.599, the department may reduce the value of the
fund to less than the limit established in paragraph (a) of this
subsection when the department:
  (A) Finds that without such a reduction in fund value, bonds
secured by the fund are likely to be in default; and
  (B) Imposes a moratorium on grants until the requirements of
paragraph (a) of this subsection are satisfied.
   { +  (9)(a) A contract to lend moneys from the Water Fund to a
city or county is not subject to review under ORS 291.047
provided the amount of the loan is less than $10 million and the
loan is secured by a general or limited tax obligation of the
city or county.
  (b) A contract to lend moneys from the Water Fund to a
municipality that is not a city or county is not subject to
review under ORS 291.047 provided the loan is secured by a
general or limited tax obligation of the municipality. + }
    { - (9)(a) - }  { +  (10)(a) + } The department may charge
administrative costs to the fund, but not to moneys segregated in
the account created by subsection   { - (11) - }  { +  (12) + }
of this section, to pay for administrative expenses incurred by
the department.
  (b) As used in this section, 'administrative expenses '
includes:
  (A) The direct and administrative costs of processing
applications, investigating water projects, monitoring recipients
of financing for water projects and servicing and collecting
outstanding financial awards made for water projects; and
  (B) The costs of contracting for planning and technical
assistance services and other support services for
municipalities.
  (c) To the extent permitted by federal law, administrative
expenses of the department as limited in this subsection that are
paid from the fund shall not exceed four percent of the total
assets of the fund reduced by the bonded debt liabilities in any
one year. Administrative expenses of the department as limited in
this subsection may be paid from bond proceeds.
    { - (10) - }  { +  (11) + } The department may establish
other accounts within the Water Fund for the payment of water
projects costs, reserves, debt service payments, credit
enhancements, costs of issuing revenue bonds, administrative and
operating expenses or any other purpose necessary to carry out
ORS 285B.560 to 285B.599.
    { - (11) - }  { +  (12) + } There is created within the Water
Fund a separate and distinct account for the proceeds from the
sale of water development general obligation bonds issued for
safe drinking water projects and credited to the special account
under this section. Any investment earnings thereon shall be
segregated in and continuously appropriated to a special,
separately accounted for subaccount of this account. Moneys
credited to this account shall be maintained separate and
distinct from moneys credited to subaccounts created under
subsection   { - (10) - }  { +  (11) + } of this section.
Notwithstanding ORS 285B.566 or subsection (4) of this section,
all repayments of moneys loaned from the account created by this
subsection, including interest on such moneys, shall be credited
to the Water Development Administration and Bond Sinking Fund
created by ORS 541.830.
  SECTION 7. ORS 541.700 is amended to read:
  541.700. As used in ORS 541.700 to 541.855, unless the context
requires otherwise:
  (1) 'Commission' means the Water Resources Commission appointed
under ORS 536.022.
  (2) 'Construction' means the construction, or improvement or
rehabilitation, in whole or in part, of a water development
project, including planning and engineering work, purchasing or
refinancing directly related to such construction or improvement
or rehabilitation, or any combination of such construction or
improvement or rehabilitation. As used in this subsection:
  (a) 'Purchasing' means the purchasing of materials, land or
existing facilities necessary to complete a water development
project.
  (b) 'Refinancing' includes refinancing existing debt of a water
developer, as defined in subsection (7)(f) to (m) and (o) of this
section, in order to complete a water development project or to
provide adequate security for a water development loan, but does
not include refinancing existing debt only to reduce interest
rates or costs to the borrower or to pay off existing debt.
  (3) 'Director' means the Water Resources Director appointed
pursuant to ORS 536.032.
  (4) 'Federal water development project' means any water
development project that receives funding from the federal
government, or any agency or instrumentality of the United
States.
  (5)(a) 'Secondary use' means:
  (A) Any water-related recreational use.
  (B) Any flood control use.
  (C) Any power generation use.
  (D) Any water supply system utilized as a domestic water system
for the benefit of an individual residence related to the
operation of the water development project.
  (b) 'Secondary use' does not include any use that is
incompatible with a water development project.
  (6) 'Water development project' means:
  (a) An undertaking, in whole or in part, in this state for the
purpose of irrigation, including structures for the application
of water for agricultural harvest activities, dams, storage
reservoirs, wells or well systems, pumping plants, pipelines,
canals, ditches, revetments, water supply systems used for the
purpose of agricultural temperature control and any other
structure, facility and property necessary or convenient for
supplying lands with water for irrigation purposes.
  (b) An undertaking, in whole or in part, in this state for the
purpose of drainage, including ditching, tiling, piping, channel
improvement, pumping plants or other agronomically approved
methods of land drainage that will increase soil versatility and
productivity.
  (c) An undertaking, in whole or in part, in this state for the
purpose of providing water for municipal use, which may include
safe drinking water for communities with population less than
30,000, including dams, storage reservoirs, wells or well
systems, pumping plants, treatment facilities, pipelines, canals,
ditches, revetments and all other structures and facilities
necessary or convenient for supplying water. An undertaking may
provide water to two or more communities with a combined
population of more than 30,000. An undertaking may be part of a
project that provides water to a community with a population of
more than 30,000, but loans of moneys from the Water Development
Fund, including moneys in ORS 285B.563   { - (11) - }  { +
(12) + } may be made only to communities served by the project
that have a population of less than 30,000.
  (d) An undertaking, in whole or in part, in this state for the
purpose of fish protection, including fish screening or by-pass
devices, fishways and all other structures and facilities
necessary or convenient for providing fish protection.
  (e) An undertaking, in whole or in part, in this state for the
purpose of enhancing watershed health or improving fish habitat,
including methods and materials to restore, maintain and enhance
the biological, chemical and physical integrity of the riparian
zones and associated uplands of the state's rivers, lakes and
estuaries systems and recommended by the Oregon Watershed
Enhancement Board established under ORS 541.360.
  (f) Secondary uses in conjunction with projects described in
paragraphs (a) to (e) of this subsection.
  (7) 'Water developer' means:
  (a) Any individual resident of this state;
  (b) Any partnership for profit subject to the provisions of ORS
chapter 67, 68 or 70, whose principal income is from farming in
Oregon;
  (c) Any corporation for profit subject to the provisions of ORS
chapter 60, whose principal income is from farming in Oregon;
  (d) Any nonprofit corporation subject to the provisions of ORS
chapter 65, whose principal income is from farming in Oregon;
  (e) Any cooperative subject to the provisions of ORS chapter
62, whose principal income is from farming in Oregon;
  (f) Any irrigation district organized under or subject to ORS
chapter 545;
  (g) Any water improvement district organized under ORS chapter
552;
  (h) Any water control district organized under ORS chapter 553;
  (i) Any irrigation or drainage corporation organized under or
subject to ORS chapter 554;
  (j) Any drainage district organized under ORS chapter 547 or
subject to all or part of ORS chapter 545;
  (k) Any corporation, cooperative, company or other association
formed prior to 1917 for the purpose of distributing water for
irrigation purposes;
  (L) Any port district organized under ORS 777.005 to 777.725,
777.915 to 777.953 and 777.990;
  (m) Any city or county;
  (n) Any organization formed for the purpose of distributing
water for community water supply; or
  (o) Any local soil and water conservation district organized
under ORS 568.210 to 568.808 and 568.900 to 568.933.
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