Chapter 31 Oregon Laws 2005

AN ACT

HB 2092

Relating to charitable gift annuities; creating new provisions; amending ORS 341.290, 731.026 and 731.804; and repealing ORS 731.704, 731.708, 731.712, 731.716, 731.720 and 731.724.

Be It Enacted by the People of the State of Oregon:

SECTION 1. Section 2 of this 2005 Act is added to and made a part of the Insurance Code.

SECTION 2. (1) As used in this section:

(a) “Charitable gift annuity” has the meaning given that term in section 501(m)(5) of the Internal Revenue Code, as amended and in effect on the effective date of this 2005 Act.

(b) “Charitable organization” means an organization to which contributions may be made that are charitable contributions under section 170(c) of the Internal Revenue Code, as amended and in effect on the effective date of this 2005 Act.

(2) The Insurance Code does not apply to a charitable organization that issues charitable gift annuities if, on the date that the charitable organization issues the charitable gift annuity, the charitable organization:

(a) Has a minimum of $300,000 in net assets as shown by an annual audited financial statement prepared by an independent certified public accountant and kept on file by the charitable organization;

(b) Except as provided in subsection (3) of this section, has been in continuous operation for at least five years or is a successor to or an affiliate of a charitable organization that has been in continuous operation for at least five years; and

(c) Maintains a separate and distinct trust fund as a reserve fund adequate to meet the future payments under all outstanding annuity agreements. The amount in the reserve fund must be an amount no less than an amount computed on the basis of the transfers to which it relates in accordance with the standard of valuation based on current mortality tables and interest rate recommended by a national organization organized for the purpose of providing educational and other services to American charities regarding gift annuities and other forms of planned gifts. The reserve fund may include one or more single premium annuities that pay the entire amount of one or more charitable gift annuities issued by the charitable organization if each single premium annuity is issued by an authorized insurer that is also authorized to transact insurance in the state in which the charitable organization has its principal office and in the state in which the single premium annuity is issued.

(3) The Insurance Code does not apply to an educational institution or nonprofit corporation that issued a charitable gift annuity before the effective date of this 2005 Act under a certificate of authority issued under ORS 731.704 (repealed in 2005).

(4) When a charitable organization that is subject to subsection (2) of this section enters into an agreement for a charitable gift annuity, the charitable organization shall disclose in writing to the donor that the charitable gift annuity is not issued by an insurance company, is not subject to regulation by the State of Oregon and is not protected by an insurance guaranty association.

(5) A charitable organization that is not subject to subsection (2) of this section must hold a certificate of authority to issue charitable gift annuities.

SECTION 3. Section 2 (2)(a) and (b) of this 2005 Act does not apply to an educational institution or nonprofit corporation that holds a certificate of authority issued under ORS 731.704 (repealed in 2005) on the day before the effective date of this 2005 Act. An educational institution or nonprofit corporation subject to this section shall keep on file an annual audited financial statement prepared by an independent certified public accountant.

SECTION 4. ORS 731.704, 731.708, 731.712, 731.716, 731.720 and 731.724 are repealed.

SECTION 5. ORS 341.290 is amended to read:

341.290. The board of education of a community college district shall be responsible for the general supervision and control of any and all community colleges operated by the district. Consistent with any applicable rules of the State Board of Education, the board may:

(1) Subject to ORS chapters 238 and 238A, employ administrative officers, professional personnel and other employees, define their duties, terms and conditions of employment and prescribe compensation therefore, pursuant to ORS 243.650 to 243.782.

(2) Enact rules for the government of the community college, including professional personnel and other employees thereof and students therein.

(3) Prescribe the educational program.

(4) Control use of and access to the grounds, buildings, books, equipment and other property of the district.

(5) Acquire, receive, hold, control, convey, sell, manage, operate, lease, lease-purchase, lend, invest, improve and develop any and all property of whatever nature given to or appropriated for the use, support or benefit of any activity under the control of the board, according to the terms and conditions of such gift or appropriation.

(6) Purchase real property upon a contractual basis when the period of time allowed for payment under the contract does not exceed 30 years.

(7) Fix standards of admission to the community college, prescribe and collect tuition for admission to the community college, including fixing different tuition rates for students who reside in the district, students who do not reside in the district but are residents of the state and students who do not reside in the state.

(8) Prescribe and collect fees and expend funds so raised for special programs and services for the students and for programs for the cultural and physical development of the students.

(9) Provide and disseminate to the public information relating to the program, operation and finances of the community college.

(10) Establish or contract for advisory and consultant services.

(11) Take, hold and dispose of mortgages on real and personal property acquired by way of gift or arising out of transactions entered into in accordance with the powers, duties and authority of the board and institute, maintain and participate in suits and actions and other judicial proceedings in the name of the district for the foreclosure of such mortgages.

(12) Maintain programs, services and facilities, and, in connection therewith, cooperate and enter into agreements with any person or public or private agency.

(13) Provide student services including health, guidance, counseling and placement services, and contract therefore.

(14) Join appropriate associations and pay any required dues therefore from resources of the district.

(15) Apply for federal funds and accept and enter into any contracts or agreements for the receipt of such funds from the federal government or its agencies for educational purposes.

(16) Exercise any other power, duty or responsibility necessary to carry out the functions under this section or required by law.

(17) Prescribe rules for the use and access to public records of the district that are consistent with ORS 192.420, and education records of students under applicable state and federal law and rules of the State Board of Education. Whenever a student has attained 18 years of age or is attending an institution of post-secondary education, the permission or consent required of and the rights accorded to a parent of the student regarding education records shall thereafter be required of and accorded to only the student. However, faculty records relating to matters such as conduct, personal and academic evaluations, disciplinary actions, if any, and other personal matters shall not be made available to public inspection for any purpose except with the consent of the person who is the subject of the record or upon order of a court of competent jurisdiction.

(18) Enter into contracts for the receipt of cash or property, or both, and establish charitable gift annuities pursuant to [ORS 731.704 to 731.724] section 2 of this 2005 Act; and, commit, appropriate, authorize and budget for the payment of or other disposition of general funds to pay, in whole or in part, sums due under an [annuity] agreement for a charitable gift annuity, and to provide the necessary funding for reserves or other trust funds pursuant to [ORS 731.716] section 2 of this 2005 Act.

(19) Encourage gifts to the district by faithfully devoting the proceeds of such gifts to the district purposes for which intended.

(20) Build, furnish, equip, repair, lease, purchase and raze facilities; and locate, buy and acquire lands for all district purposes. Financing may be by any prudent method including but not limited to loans, contract purchase or lease. Leases authorized by this section include lease-purchase agreements [whereunder] under which the district may acquire ownership of the leased property at a nominal price. Such financing agreements may be for a term of up to 30 years except for lease arrangements which may be for a term of up to 50 years.

(21) Participate in an educational consortium with public and private institutions that offer upper division and graduate instruction. Community colleges engaged in such consortiums may expend money, provide facilities and assign staff to assist those institutions offering upper division and graduate instruction.

(22) Enter into contracts of insurance or medical and hospital service contracts or may operate a self-insurance program as provided in ORS 341.312.

SECTION 6. ORS 731.026 is amended to read:

731.026. The Insurance Code [shall apply] applies to:

[(1) An educational institution or nonprofit corporation issuing annuity policies in compliance with ORS 731.704 to 731.724, only as provided in such sections.]

[(2)] (1) A fraternal benefit society complying with ORS chapter 748, only as provided in such chapter.

[(3)] (2) A health care service contractor complying with ORS 750.005 to 750.095, only as provided in such sections.

[(4)] (3) A legal expense organization complying with ORS 750.505 to 750.715, only as provided in such sections.

[(5)] (4) A multiple employer welfare arrangement complying with ORS 750.301 to 750.341, only as provided in such sections.

SECTION 7. ORS 731.804 is amended to read:

731.804. (1) Except as otherwise provided in this section, each authorized insurer doing business in this state shall pay assessments that the Director of the Department of Consumer and Business Services determines necessary to support the legislatively authorized budget of the Department of Consumer and Business Services with respect to functions of the department under the Insurance Code. The director shall determine the assessments according to one or more percentage rates established by the director by rule. The director shall specify in the rule when assessments shall be made and payments shall be due. The premium-weighted average of the percentage rates shall not exceed nine-hundredths of one percent of the gross amount of premiums received by an insurer or its insurance producers from and under its policies covering direct domestic risks, after deducting the amount of return premiums paid and the amount of dividend payments made to policyholders with respect to such policies. In the case of reciprocal insurers, the amount of savings paid or credited to the accounts of subscribers shall be deducted from the gross amount of premiums. In establishing the percentage rate or rates, the director shall use the most recent premium data approved by the director. In establishing the amounts to be collected under this subsection, the director shall take into consideration the expenses of the department for administering the Insurance Code and the fees collected under subsection (2) of this section. When the director establishes two or more percentage rates:

(a) Each rate shall be based on such expenses of the department ascribed by the director to the line of insurance for which the rate is established.

(b) Each rate shall be applied to the gross amount of premium received by an insurer or its insurance producers for the applicable line of insurance as provided in this subsection.

(2) The director may collect fees for specific services provided by the department under the Insurance Code according to a schedule of fees established by the director by rule. The director may collect such fees in advance. In establishing the schedule for fees, the director shall take into consideration the cost of each service for which a fee is imposed.

(3) Establishment and amendment of the schedule of fees under subsection (2) of this section are subject to prior approval of the Oregon Department of Administrative Services and a report to the Emergency Board prior to adopting the fees and shall be within the budget authorized by the Legislative Assembly as that budget may be modified by the Emergency Board.

(4) The director may not collect an assessment under subsection (1) of this section from any of the following persons:

(a) A fraternal benefit society complying with ORS chapter 748.

[(b) An educational institution or nonprofit corporation issuing annuity policies in compliance with ORS 731.704 to 731.724.]

[(c)] (b) Any person or class of persons designated by the director by rule.

(5) The director may not collect an assessment under subsection (1) of this section with respect to premiums received from any of the following policies:

(a) Workers’ compensation insurance policies.

(b) Annuity policies, whether fixed or variable in nature.

(d) Any category of policies designated by the director by rule.

Approved by the Governor May 13, 2005

Filed in the office of Secretary of State May 13, 2005

Effective date January 1, 2006

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