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 3466
A-Engrossed
Senate Bill 856
Ordered by the Senate February 28
Including Senate Amendments dated February 28
Sponsored by JOINT COMMITTEE ON WAYS AND MEANS
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.
Authorizes State Treasurer to issue revenue bonds to be paid
from appropriated moneys and other moneys legally available.
Specifies that net bond proceeds are to be credited to General
Fund.
Repeals Master Settlement Asset Corporation Act.
Declares emergency, effective on passage.
A BILL FOR AN ACT
Relating to state finance; creating new provisions; amending ORS
293.537; repealing sections 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11,
12, 13, 14, 15, 16, 18 and 19, chapter 2, Oregon Laws 2002
(fifth special session); appropriating money; limiting
expenditures; and declaring an emergency.
Be It Enacted by the People of the State of Oregon:
SECTION 1. { + As used in sections 1 to 5 of this 2003 Act,
unless the context requires otherwise:
(1) 'Appropriated moneys' means:
(a) Moneys that are specifically appropriated or otherwise made
available by the Legislative Assembly or the Emergency Board to
pay Oregon Appropriation Bonds or bond-related costs; and
(b) Other moneys appropriated to the Oregon Department of
Administrative Services that may lawfully be applied to pay
Oregon Appropriation Bonds or bond-related costs.
(2) 'Bond-related costs' means:
(a) The costs and expenses of issuing, administering and
maintaining Oregon Appropriation Bonds, including but not limited
to paying or redeeming the bonds, paying amounts due in
connection with credit enhancements or other instruments
authorized by section 2 of this 2003 Act and paying the
administrative costs and expenses of the State Treasurer and the
department, including the cost of consultants or advisors
retained by the State Treasurer or the department for the bonds;
(b) The cost of funding bond reserves;
(c) Capitalized interest for Oregon Appropriation Bonds;
(d) Rebates or penalties due to the United States in connection
with Oregon Appropriation Bonds; and
(e) Other costs or expenses that the State Treasurer or the
Director of the Oregon Department of Administrative Services
determines are necessary or desirable in connection with issuing,
administering and maintaining Oregon Appropriation Bonds.
(3) 'Oregon Appropriation Bond Administrative Fund' means the
fund created by section 4 of this 2003 Act.
(4) 'Oregon Appropriation Bond Fund' means the fund created by
section 3 of this 2003 Act.
(5) 'Oregon Appropriation Bonds' means bonds authorized by
section 2 (1) of this 2003 Act.
(6) 'Refunding Oregon Appropriation Bonds' means bonds
authorized by section 2 (2) of this 2003 Act and issued for the
purpose of refunding Oregon Appropriation Bonds.
(7) 'Tax-exempt obligations' means obligations that bear
interest that is excludable from gross income under federal
income tax laws. + }
SECTION 2. { + (1) In accordance with the applicable
provisions of ORS chapters 286 and 288 and sections 1 to 5 of
this 2003 Act, the State Treasurer, with the concurrence of the
Director of the Oregon Department of Administrative Services, may
issue during the 2001-2003 biennium, in one or more series,
Oregon Appropriation Bonds in an aggregate principal amount that
raises net proceeds of not more than $450 million to finance
budget deficits that are expected to occur in the 2001-2003
biennium, plus an additional amount of proceeds determined by the
State Treasurer to pay bond-related costs. Net proceeds in the
amount of not more than $450 million from the sale of Oregon
Appropriation Bonds must be credited to the General Fund for
purposes for which moneys in the General Fund may be expended.
The State Treasurer may issue Oregon Appropriation Bonds as
tax-exempt obligations or as obligations that bear interest that
is includable in gross income under federal income tax laws. The
State Treasurer, with the concurrence of the director, shall
structure Oregon Appropriation Bonds so that they mature or are
redeemable as rapidly as the State Treasurer determines that
projections of future revenues or other available moneys
reasonably permit.
(2) The State Treasurer, at the request of the Oregon
Department of Administrative Services, may issue, in one or more
series, Refunding Oregon Appropriation Bonds in addition to the
bonds authorized by subsection (1) of this section. Refunding
Oregon Appropriation Bonds may be issued in amounts the State
Treasurer determines are necessary or appropriate to pay or
defease the bonds to be refunded and to pay bond-related costs.
(3) The State Treasurer or the director may:
(a) Enter into a trust agreement or execute a bond declaration
that details the provisions of each series of Oregon
Appropriation Bonds and contains covenants of the state that
enhance the security for, and reduce the interest expense of,
Oregon Appropriation Bonds;
(b) Appoint and enter into appropriate contracts with bond or
disclosure counsel in accordance with ORS 288.523; and
(c) Retain the services of and enter into appropriate contracts
for financial consultants, underwriters, paying agents and other
professional service providers in connection with the issuance,
administration and maintenance of Oregon Appropriation Bonds.
(4) By enacting this subsection, the Legislative Assembly
acknowledges its current intention to apply the moneys available
to the state under the Master Settlement Agreement, as defined in
ORS 293.533, and moneys received in replacement for those moneys,
to pay Oregon Appropriation Bonds and to provide any other
appropriated moneys that are required to pay Oregon Appropriation
Bonds when due. However:
(a) Oregon Appropriation Bonds issued under this section are
special obligations of the State of Oregon that are payable
solely from appropriated moneys and other moneys pledged pursuant
to this section. The faith and credit of the State of Oregon and
its taxing power are not pledged and may not be pledged or
committed to the payment of Oregon Appropriation Bonds or the
obligations authorized by this section. Oregon Appropriation
Bonds and the obligations authorized by this section may not be
secured by or payable from assets of this state other than
appropriated moneys and other moneys pledged pursuant to this
section.
(b) The State of Oregon and the Legislative Assembly are not
under a legal compulsion to provide appropriated moneys or other
moneys to pay Oregon Appropriation Bonds or obligations
authorized by this section and are not liable for not providing
appropriated moneys.
(c) All Oregon Appropriation Bonds and obligations authorized
by this section must contain a statement that:
(A) The State of Oregon is not obligated to pay those
obligations from any source except appropriated moneys and other
moneys pledged pursuant to this section; and
(B) Neither the full faith and credit nor the taxing power of
the State of Oregon are pledged to pay those obligations.
(5) The State Treasurer may pledge all or a portion of the
moneys that are credited to the Oregon Appropriation Bond Fund
and unexpended proceeds of Oregon Appropriation Bonds, if any, to
pay Oregon Appropriation Bonds and obligations authorized by this
section and to fund bond reserves authorized by this section. The
pledge shall be perfected and otherwise have the effect that is
stated in ORS 288.594.
(6) The State Treasurer may establish bond reserves for Oregon
Appropriation Bonds. The bond reserves may be in the form of
cash, investments, surety bonds, municipal bond insurance, lines
of credit, letters of credit or other similar instruments. The
State Treasurer, on behalf of the State of Oregon, may covenant
to maintain the reserves at particular levels, but solely from
appropriated moneys and other moneys that may be pledged pursuant
to this section.
(7) The State Treasurer or the director may take actions that
are required so that Oregon Appropriation Bonds are not '
arbitrage bonds' under federal income tax laws, including but not
limited to investing moneys of the state at a limited yield,
investing moneys of the state in obligations that pay interest
that is excludable from gross income under the federal income tax
laws and redeeming Oregon Appropriation Bonds from any legally
available source of moneys.
(8) The State Treasurer, or the director with the consent of
the State Treasurer, may enter into covenants for the benefit of
the owners of Oregon Appropriation Bonds and providers of credit
enhancements or instruments authorized by this section, including
but not limited to the following covenants:
(a) To include in the Governor's budget request to the
Legislative Assembly for each fiscal period a request for
appropriated moneys in amounts sufficient to permit the payment
of all amounts required in the fiscal period to pay Oregon
Appropriation Bonds, obligations authorized by this section and
bond-related costs.
(b) If appropriated moneys and other moneys available in the
Oregon Appropriation Bond Fund are not sufficient to pay Oregon
Appropriation Bonds or obligations authorized by this section or
to maintain bond reserves for Oregon Appropriation Bonds at
required levels, to notify the Governor and either the
Legislative Assembly or the Emergency Board of the amount of
additional appropriated moneys required to permit timely payment
of Oregon Appropriation Bonds and the obligations authorized by
this section and to maintain bond reserves at required levels.
(c) To maintain a minimum balance in reserve accounts
established for Oregon Appropriation Bonds, but solely from
appropriated moneys and other moneys pledged pursuant to this
section.
(d) To pay Oregon Appropriation Bonds and amounts due under
obligations authorized by this section, but solely from
appropriated moneys and other moneys pledged pursuant to this
section.
(e) To apply all appropriated moneys and other moneys pledged
pursuant to this section to the extent required to pay Oregon
Appropriation Bonds and obligations authorized by this section
when due.
(f) To take actions required so that Oregon Appropriation Bonds
that are issued as tax-exempt obligations continue to bear
interest that is excludable from gross income under federal
income tax laws.
(g) To comply with sections 1 to 5 of this 2003 Act and to take
actions authorized by sections 1 to 5 of this 2003 Act.
(9) Covenants made under this section for the benefit of owners
of Oregon Appropriation Bonds constitute contracts between the
State of Oregon and the owners of Oregon Appropriation Bonds.
(10) If the State Treasurer determines that the acquisition is
cost-effective, the State Treasurer may acquire municipal bond
insurance policies, letters of credit, lines of credit, surety
bonds or other credit enhancement devices for Oregon
Appropriation Bonds and may enter into related agreements.
(11) The State Treasurer may:
(a) Provide that all or a portion of the Oregon Appropriation
Bond Fund, the Oregon Appropriation Bond Administrative Fund or
accounts in either fund shall be held by one or more trustees;
(b) Enter into agreements with those trustees regarding the use
and application of the moneys held in those funds and accounts;
and
(c) Transfer amounts credited to those funds and accounts to
those trustees. + }
SECTION 3. { + (1) The Oregon Appropriation Bond Fund is
established in the State Treasury separate and distinct from the
General Fund. Earnings on moneys in the Oregon Appropriation Bond
Fund shall be credited to the Oregon Appropriation Bond Fund. In
addition, each fiscal year, the Oregon Department of
Administrative Services shall credit the first available
appropriated moneys to the Oregon Appropriation Bond Fund until
the fund contains an amount sufficient to pay the principal and
interest on Oregon Appropriation Bonds that are scheduled to be
paid in the fiscal year and the amounts that are due under
obligations authorized by section 2 of this 2003 Act.
(2) The bond reserves established by the State Treasurer under
section 2 of this 2003 Act for Oregon Appropriation Bonds must be
credited to an account in the Oregon Appropriation Bond Fund
designated by the State Treasurer.
(3) The moneys credited to the Oregon Appropriation Bond Fund
are continuously appropriated to the department for the purpose
of paying Oregon Appropriation Bonds and obligations authorized
by section 2 of this 2003 Act and funding bond reserves
established under section 2 of this 2003 Act. Except as provided
in section 4 of this 2003 Act, once appropriated moneys or other
moneys are credited to the Oregon Appropriation Bond Fund, those
moneys may not be used for another purpose.
(4) The State Treasurer may establish accounts and subaccounts
within the Oregon Appropriation Bond Fund that the State
Treasurer determines are necessary or appropriate. In addition,
the State Treasurer or the Director of the Oregon Department of
Administrative Services may, on behalf of this state, enter into
agreements that the State Treasurer determines are necessary or
appropriate to issue, administer and maintain Oregon
Appropriation Bonds and carry out sections 1 to 5 of this 2003
Act. + }
SECTION 4. { + The Oregon Appropriation Bond Administrative
Fund is established in the State Treasury separate and distinct
from the General Fund. The Oregon Department of Administrative
Services may credit to the Oregon Appropriation Bond
Administrative Fund appropriated moneys that remain in a fiscal
year after the credits described in section 3 of this 2003 Act
have been made. The proceeds of Oregon Appropriation Bonds issued
to pay bond-related costs and the earnings on moneys in the
Oregon Appropriation Bond Administrative Fund shall be credited
to the Oregon Appropriation Bond Administrative Fund. Moneys
credited to the Oregon Appropriation Bond Administrative Fund are
continuously appropriated to the department for the purpose of
paying bond-related costs. + }
SECTION 5. { + (1) Jurisdiction is conferred on the Supreme
Court to determine in the manner provided by this section the
validity of any provision of sections 1 to 5 of this 2003 Act and
amendments to sections 1 to 5 of this 2003 Act.
(2) Under the jurisdiction conferred in subsection (1) of this
section, a person aggrieved by a provision of sections 1 to 5 of
this 2003 Act or an amendment to sections 1 to 5 of this 2003 Act
may petition the Supreme Court for review. The petition must
state the facts showing how the petitioner is aggrieved and the
grounds upon which the petition is based. The petition must be
filed within 30 days of the effective date of this 2003 Act, or
within 30 days of the effective date of an amendment to sections
1 to 5 of this 2003 Act.
(3) A person petitioning for review under this section is not
required to exhaust administrative remedies or file in another
court prior to filing a petition for review under this section.
(4) A petition for review under this section must present a
justiciable controversy. The petitioner must serve a copy of the
petition on the Attorney General at the time of filing.
(5) The Supreme Court shall give priority on its docket to a
petition for review filed under this section over other civil
matters, except matters related to an election, and shall
expedite a decision on the petition. The Supreme Court may
consolidate on its own motion one or more petitions filed under
this section alleging a similar basis or bases of challenge.
(6) The petition for review provided for in this section is in
addition to any other remedy or procedure that may be available
to a person aggrieved by a provision of sections 1 to 5 of this
2003 Act or an amendment to sections 1 to 5 of this 2003 Act. + }
SECTION 6. { + Notwithstanding any other law limiting
expenditures, the amount of $6,643,773 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 Appropriation Bond Administrative Fund for the
purpose of paying bond-related costs authorized by section 2 of
this 2003 Act. + }
SECTION 7. { + Sections 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12,
13, 14, 15, 16, 18 and 19, chapter 2, Oregon Laws 2002 (fifth
special session), are repealed. + }
SECTION 8. ORS 293.537, as amended by section 17, chapter 2,
Oregon Laws 2002 (fifth special session), is amended to read:
293.537. (1) The Tobacco Settlement Funds Account is
established as an account in the General Fund. Except as provided
in { - sections 1 to 16 of this 2002 fifth special session
Act - } { + section 2 of this 2003 Act + }, the account shall
consist of all moneys paid to this state { - by United States
tobacco products manufacturers - } under the Master Settlement
Agreement of 1998.
(2) All moneys in the Tobacco Settlement Funds Account are
continuously appropriated to the Oregon Department of
Administrative Services to be expended as directed by the
Legislative Assembly.
(3) All moneys in the Tobacco Settlement Funds Account shall be
invested as provided in ORS 293.701 to 293.790.
SECTION 9. { + 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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