72nd OREGON LEGISLATIVE ASSEMBLY--2003 Regular Session
Enrolled
House Bill 3613
Sponsored by Representative GREENLICK; Representatives AVAKIAN,
BACKLUND, BARKER, BERGER, DALTO, HASS, HUNT, KITTS, MARCH,
NELSON, SCHAUFLER, P SMITH, Senators ATKINSON, BROWN, CLARNO,
CORCORAN, DEVLIN, B STARR, WINTERS (at the request of
Associated Oregon Industries)
CHAPTER ................
AN ACT
Relating to state investments; creating new provisions; amending
ORS 293.796, 348.702 and 348.703; and declaring an emergency.
Be It Enacted by the People of the State of Oregon:
SECTION 1. ORS 293.796 is amended to read:
293.796. The Legislative Assembly finds that:
(1) The availability of venture capital for the start-up and
subsequent expansion of new businesses is critical to the
continued growth and development of the economy of Oregon.
(2) There exists an estimated gap of between $100 million and
$200 million between available venture capital resources and the
need of Oregon businesses for such resources.
(3) Investments in start-up and expanding businesses { + , in
minority or women business enterprises and in emerging growth
businesses + } can produce substantial positive returns for
long-term investors.
(4) Pension funds managed by the Oregon Investment Council
constitute a major financial resource of the State of Oregon, and
that such funds may be prudently invested in start-up { + and
emerging growth + } businesses in this state under policies
established by the Oregon Investment Council.
{ + (5) As used in this section:
(a) 'Emerging growth business' has the meaning given that term
in ORS 348.701.
(b) 'Minority or women business enterprise' has the meaning
given that term in ORS 200.005. + }
SECTION 2. { + Section 3 of this 2003 Act is added to and made
a part of ORS 293.701 to 293.820. + }
SECTION 3. { + (1) In making and implementing investment
decisions related to venture capital, the Oregon Investment
Council and the investment officer have a duty to look first at
Oregon opportunities for diversification unless, under the
circumstances, it is not prudent to do so.
(2) At any given time, the council shall have at least $100
million in venture capital investments in Oregon unless, under
the circumstances, it is not prudent to do so.
(3) As used in this section:
(a) 'Emerging growth business' has the meaning given that term
in ORS 348.701.
Enrolled House Bill 3613 (HB 3613-A) Page 1
(b) 'Venture capital' includes but is not limited to emerging
growth businesses. + }
SECTION 4. { + The Oregon Investment Council shall begin
making commitments in accordance with section 3 of this 2003 Act
as soon as possible after the effective date of this 2003 Act and
shall complete committing the moneys by January 1, 2008. + }
SECTION 5. { + The Oregon Investment Council shall submit an
annual report to the Speaker of the House of Representatives and
the President of the Senate detailing the investments and
commitments made by the council in accordance with section 3 of
this 2003 Act. + }
SECTION 6. ORS 348.702, as amended by section 4, chapter 6,
Oregon Laws 2002 (third special session), is amended to read:
348.702. (1) There is created within the Education Stability
Fund the Oregon Growth Account, to which shall be credited { + ,
in the manner provided in subsection (2) of this section, + } 10
percent of the funds transferred under section 4, Article XV
{ - , - } { + of the + } Oregon Constitution, from the
Administrative Services Economic Development Fund to the
Education Stability Fund. Separate records shall be maintained
for moneys in the Oregon Growth Account that are available for
the purposes specified in subsection { - (2) - } { + (5) + }
of this section. The account may be credited with such
unrestricted appropriations, gifts, donations, grants or contract
proceeds from any source, with investments or funds from any
source, and with returns on investments made from the account.
{ + (2) The Oregon Department of Administrative Services may
credit to the Oregon Growth Account from the first funds
transferred in a fiscal year to the Education Stability Fund
under section 4, Article XV of the Oregon Constitution, an amount
up to the amount the department estimates to be 10 percent of the
funds required to be transferred to the Education Stability Fund
for that fiscal year.
(3) If at the end of the fiscal year the amount credited to the
Oregon Growth Account under subsection (2) of this section is
less than or greater than 10 percent of the amount required to be
transferred under section 4, Article XV of the Oregon
Constitution, to the Education Stability Fund, the amount
credited to the Oregon Growth Account shall be adjusted in one of
the following ways:
(a) The amount credited to the account in the following fiscal
year may be adjusted;
(b) Any excess may be transferred from the Oregon Growth
Account to the Education Stability Fund; or
(c) Any shortage may be transferred from the Education
Stability Fund to the Oregon Growth Account from funds available
for that purpose.
(4) Adjustments required by subsection (3) of this section
shall be made without consideration of any interest or other
earnings that have accrued during the fiscal year. + }
{ - (2) - } { + (5) + } The purpose of the Oregon Growth
Account is to earn returns for the Education Stability Fund by
making investments in or to provide seed capital for emerging
growth businesses in key industries.
{ - (3) - } { + (6) + } The investment of funds in the
Oregon Growth Account shall be governed by the Oregon Growth
Account Board.
SECTION 7. ORS 348.703, as amended by section 5, chapter 6,
Oregon Laws 2002 (third special session), is amended to read:
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348.703. (1) The Oregon Growth Account Board shall contract
with one or more management companies to manage and invest the
moneys in the Oregon Growth Account. For purposes of this
subsection, a contract with a management company may consist of a
partnership agreement under which the Oregon Growth Account Board
is the limited partner and the management company is the general
partner.
(2) The provisions of ORS 293.726 do not apply to those assets
of the Education Stability Fund that are held in the Oregon
Growth Account. The limitations of ORS 293.726 (6) shall be
calculated based only on the balance of the Education Stability
Fund that does not include the Oregon Growth Account.
(3) A management company selected to manage the Oregon Growth
Account shall manage the moneys in the account, subject to
investment policies established by the State Treasurer and the
investment directives or strategies of the Oregon Growth Account
Board, with the care, skill and diligence that a prudent investor
acting in a similar capacity and familiar with such investments
would use in managing and investing a similar account. The
management company shall invest in Oregon an amount that is at
least equal to the amount of the principal transferred from the
Oregon Growth Account to the management company for investment.
(4) The contract between the board and a management company to
manage the Oregon Growth Account and the functions performed
under the contract are not subject to the State Personnel
Relations Law or ORS chapter 279.
(5) Notwithstanding ORS 348.702 { - (2) - } { + (5) + }, a
management company selected to manage the Oregon Growth Account
may maintain a portion of the moneys allocated to the account
under ORS 348.702 (1) in short-term securities in investments
other than those specified in ORS 348.702 { - (2) - } { +
(5) + } during such times as a management company is seeking
investments that meet the requirements of ORS 348.702
{ - (2) - } { + (5) + }.
(6) The State Treasurer shall annually submit a report to the
Governor and to the Legislative Assembly on the investment of
moneys in the Oregon Growth Account. The report required by this
subsection shall include a summary of the amount of money
invested by industrial sector or business classification, by
region of this state, by size of investment and by type of
investment.
(7) The State Treasurer shall provide to other state agencies
any reports on the investment of moneys in the Oregon Growth
Account that are necessary to fulfill audit, financial,
investment or other reporting requirements to which the Education
Stability Fund is subject by law or standard accounting
principles.
(8) The office of the State Treasurer shall provide staff to
the board.
(9) There is continuously appropriated to the board from the
Oregon Growth Account those amounts necessary to meet the
expenses of the board and the State Treasurer in carrying out the
operations of the Oregon Growth Account and the duties of the
board and the State Treasurer. The cost to the office of the
State Treasurer of providing staff to the board shall be deducted
from those amounts paid to the State Treasurer pursuant to ORS
293.718 as reimbursement for expenses incurred as investment
officer for the Education Stability Fund.
(10) The board may enter into contracts for the provision of
investment advice or other services that the board deems
Enrolled House Bill 3613 (HB 3613-A) Page 3
reasonable and necessary to fulfill the duties of the board. The
State Treasurer may enter into contracts for the provision of
investment advice or other services that the State Treasurer
deems reasonable and necessary to fulfill the duties of the State
Treasurer with respect to the Oregon Growth Account. Such
contracts are not subject to the State Personnel Relations Law or
ORS chapter 279.
SECTION 8. { + This 2003 Act being necessary for the immediate
preservation of the public peace, health and safety, an emergency
is declared to exist, and this 2003 Act takes effect on its
passage. + }
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Passed by House April 30, 2003
Repassed by House July 10, 2003
...........................................................
Chief Clerk of House
...........................................................
Speaker of House
Passed by Senate July 8, 2003
...........................................................
President of Senate
Enrolled House Bill 3613 (HB 3613-A) Page 4
Received by Governor:
......M.,............., 2003
Approved:
......M.,............., 2003
...........................................................
Governor
Filed in Office of Secretary of State:
......M.,............., 2003
...........................................................
Secretary of State
Enrolled House Bill 3613 (HB 3613-A) Page 5