Chapter 783
AN ACT
HB 3265
Relating to public borrowing; creating new provisions; amending ORS
190.080, 190.083, 190.265, 223.235, 223.262, 238.692, 238.694, 238.695,
238.696, 238.698, 261.355, 261.371, 266.512, 267.345, 267.400, 267.630,
268.520, 268.620, 271.390, 276.429, 279A.025, 280.075, 280.450, 283.085,
283.087, 283.089, 283.092, 285B.323, 285B.326, 285B.335, 285B.344, 285B.350,
285B.362, 285B.371, 285B.455, 285B.470, 285B.473, 285B.479, 285B.533, 285B.548,
285B.563, 285B.575, 285B.584, 286.025, 286.063, 286.555, 286.560, 286.563,
286.566, 286.580, 286.585, 286.605, 286.615, 286.645, 286.750, 286.762,
286.768, 286.782, 286.788, 287.030, 287.032, 287.034, 287.040, 289.005,
289.200, 289.205, 293.175, 293.177, 293.824, 294.052, 294.326, 294.386,
294.443, 294.483, 294.820, 294.840, 294.870, 294.880, 295.005, 295.011,
310.140, 316.056, 327.705, 328.230, 328.280, 328.295, 328.321, 328.346,
328.351, 328.565, 341.616, 341.681, 341.685, 341.697, 341.702, 341.715,
341.721, 341.728, 341.739, 348.665, 351.315, 351.317, 351.345, 351.350,
351.450, 351.455, 351.460, 351.470, 352.790, 352.800, 352.805, 353.340,
353.350, 353.360, 354.685, 358.380, 367.010, 367.015, 367.025, 367.030,
367.105, 367.166, 367.555, 367.565, 367.600, 367.605, 367.615, 367.620,
367.635, 367.665, 367.715, 367.812, 370.140, 370.160, 383.023, 383.027,
390.063, 391.140, 401.844, 407.415, 407.425, 407.435, 407.525, 440.390,
450.640, 450.690, 450.915, 450.925, 451.545, 456.185, 456.190, 456.230,
456.519, 456.543, 456.615, 456.625, 456.645, 456.661, 456.670, 456.700,
456.720, 458.720, 468.195, 468.423, 468.437, 468.439, 470.225, 478.420,
478.845, 478.850, 478.855, 523.490, 530.130, 530.140, 530.230, 541.780,
543.670, 545.519, 545.541, 552.660, 553.670, 565.095, 568.803, 777.410, 777.447,
777.560, 777.565, 777.570, 777.943, 778.036, 778.145, 778.150, 778.155 and
838.065 and section 4, chapter 756, Oregon Laws 2005, sections 6 and 9, chapter
787, Oregon Laws 2005, and section 2, chapter 788, Oregon Laws 2005; repealing
ORS 223.905, 223.910, 223.915, 223.920, 223.925, 285B.347, 286.010, 286.020,
286.031, 286.033, 286.036, 286.038, 286.041, 286.051, 286.056, 286.058,
286.061, 286.066, 286.071, 286.078, 286.105, 286.115, 286.125, 286.135,
286.145, 286.505, 286.507, 286.515, 286.525, 286.535, 286.545, 286.635,
286.700, 286.705, 286.710, 286.715, 286.720, 286.770, 286.790, 287.001,
287.003, 287.004, 287.006, 287.007, 287.008, 287.012, 287.014, 287.016,
287.018, 287.020, 287.022, 287.025, 287.028, 287.029, 287.033, 287.036,
287.038, 287.042, 287.045, 287.049, 287.052, 287.053, 287.054, 287.055,
287.056, 287.058, 287.062, 287.064, 287.066, 287.069, 287.070, 287.072,
287.074, 287.075, 287.140, 287.142, 287.144, 287.146, 287.202, 287.204,
287.206, 287.208, 287.210, 287.212, 287.214, 287.216, 287.218, 287.220,
287.252, 287.254, 287.256, 287.258, 287.260, 287.262, 287.264, 288.010,
288.020, 288.030, 288.040, 288.050, 288.060, 288.070, 288.090, 288.100,
288.110, 288.120, 288.150, 288.155, 288.160, 288.162, 288.165, 288.410,
288.420, 288.430, 288.435, 288.440, 288.450, 288.460, 288.500, 288.505,
288.513, 288.515, 288.517, 288.518, 288.520, 288.523, 288.525, 288.530,
288.535, 288.540, 288.545, 288.550, 288.560, 288.570, 288.580, 288.590,
288.592, 288.594, 288.596, 288.598, 288.600, 288.605, 288.610, 288.615,
288.620, 288.625, 288.630, 288.635, 288.637, 288.640, 288.645, 288.650,
288.655, 288.660, 288.665, 288.670, 288.675, 288.677, 288.680, 288.685,
288.690, 288.695, 288.805, 288.815, 288.825, 288.835, 288.845, 288.855,
288.865, 288.875, 288.885, 288.895, 288.915, 288.925, 288.935, 288.945,
288.950, 293.173, 293.292, 328.235, 358.395, 358.400, 367.670, 450.935 and
456.650; and appropriating money.
Be It Enacted by the People of
the State of
STATE BONDS
SECTION 1. Sections 2 to 5, 7 to 11, 15 to 26 and 33 of
this 2007 Act are added to and made a part of ORS chapter 286.
(Definitions)
SECTION 2. As used in this chapter:
(1) “Agreement for
exchange of interest rates” means a contract, or an option or forward
commitment to enter into a contract, for the exchange of interest rates that
provides for:
(a) Payments based on
levels of or changes in interest rates; or
(b) Provisions to hedge
payment, rate, spread or similar exposure including, but not limited to, an
interest rate floor or cap or an option, put or call.
(2) “Bond”:
(a) Means a contractual
undertaking or instrument of the State of
(b) Does not mean a
financing agreement, as defined in ORS 283.085, if the principal amount of the
agreement is $100,000 or less, or a credit enhancement device.
(3) “Counterparty” means
an entity with whom the State of
(4) “Credit enhancement
device”:
(a) Means a letter of
credit, line of credit, standby bond purchase agreement, bond insurance policy,
reserve surety bond or other device or facility used to enhance the
creditworthiness, liquidity or marketability of bonds or agreements for the
exchange of interest rates; and
(b) Does not mean a
bond.
(5) “Credit enhancement
device fee” means a payment required to be made to the provider of a credit
enhancement device securing a bond or securing an agreement for the exchange of
interest rates.
(6) “General obligation
bond” means a bond that constitutes indebtedness of the state under section 7,
Article XI of the Oregon Constitution, and that is exempt from the $50,000
limitation on indebtedness set forth in that section.
(7) “Refunding bond”
means a bond of the State of Oregon that is issued to refund another bond,
regardless of whether the refunding is on a current, advance, forward delivery,
synthetic or other basis.
(8) “Related agency”
means the state agency that requests the State Treasurer to issue bonds
pursuant to section 7 of this 2007 Act or for which the State Treasurer has
issued bonds.
(9) “Related bond” means
a bond for which the State of
(10) “Revenue” means all
fees, tolls, excise taxes, assessments, property taxes and other taxes, rates,
charges, rentals and other income or receipts derived by a state agency or to
which a state agency is entitled.
(11) “Revenue bond”
means a bond of the State of
(12) “State agency”:
(a) Includes a statewide
elected officer, board, commission, department, division, authority or other
entity, without regard to the designation given to the entity, that is within
state government, as defined in ORS 174.111; and
(b) Does not include:
(A) A statewide elected
judge;
(B) The State Treasurer;
(C) A local government,
as defined in ORS 174.116;
(D) The
(E) A special government
body, as defined in ORS 174.117, except to the extent a special government body
must be considered a state agency in order to achieve the purposes of Article
XI-K of the Oregon Constitution; or
(F) A semi-independent
state agency listed in ORS 182.451, 182.454, 377.835 or 674.305, or any other
state agency denominated by statute as a semi-independent state agency.
(13) “Termination
payment” means the amount payable under an agreement for exchange of interest
rates by one party to another party as a result of the termination, in whole or
part, of the agreement prior to the expiration of the stated term.
(Duties of State Treasurer)
SECTION 3. (1) The State Treasurer shall issue and sign
bonds of the State of
(2) Unless otherwise
authorized by law other than this section, the State Treasurer may issue bonds
only if a related agency has requested that the bonds be issued.
(3) In determining
whether to issue bonds, the State Treasurer shall consider:
(a) The bond market for
the type of bonds proposed for issuance;
(b) The terms and
conditions of the proposed issue; and
(c) Other relevant
factors that the State Treasurer considers necessary to protect the financial
integrity of the State of
(4) The State Treasurer
may sell bonds for more than one related agency or for more than one purpose in
a single sale or in combination with the sale of other bonds.
(5) The State Treasurer
is an applicable elected representative for the purpose of approving the
issuance of bonds when approval is required under section 147(f) of the
Internal Revenue Code.
(6) The State Treasurer
may adopt rules providing for the procedural or administrative requirements for
the issuance of obligations, as defined in section 17 of this 2007 Act.
SECTION 4. A related agency shall, at the direction of
the State Treasurer, provide the State Treasurer with:
(1) The information that
the State Treasurer considers necessary to determine whether to issue the
requested bonds, including assumptions underlying cash flow projections
associated with the repayment of the bonds; and
(2) After the requested
bonds are issued, the information that the State Treasurer considers necessary
to:
(a) Administer the
bonds; and
(b) Comply with federal
and state securities law and bond covenants.
SECTION 5. (1) The State Treasurer may charge a related
agency for reasonable fees and expenses in connection with the services, duties
and activities of the State Treasurer related to the borrowing activities of
the State of Oregon, including but not limited to the issuance and
administration of obligations, as defined in section 17 of this 2007 Act.
(2) The State Treasurer
may charge a public body, as defined in section 42 of this 2007 Act, reasonable
fees and expenses in connection with:
(a) The services, duties
and activities of the State Treasurer related to obligations, as defined in
section 50 of this 2007 Act, of the public body; or
(b) Providing assistance
to the
(3) The State Treasurer
shall deposit all moneys received under this section in the Miscellaneous
Receipts Account established under ORS 286.025.
(4) The State Treasurer
shall adopt rules to implement the provisions of this section including, but
not limited to, rules identifying the services, duties and activities for which
charges are to apply.
(5) A related agency or
public body shall pay to the State Treasurer reasonable fees and expenses
charged under this section or under rules adopted pursuant to this section.
SECTION 6. Moneys received under section 5 of this 2007
Act are continuously appropriated to the State Treasurer for the payment of
expenses of the State Treasurer in connection with bonds of the State of
(Authority for Borrowing)
SECTION 7. (1) The State Treasurer may, at the request
of a related agency:
(a) Issue bonds when a
law of the State of
(b) Issue refunding
bonds without additional authorization.
(2) In consultation with
the related agency, the State Treasurer may:
(a) Sell bonds at a
competitive sale or a negotiated sale or in any other manner determined by the
State Treasurer;
(b) Issue bonds the
interest of which is exempt from federal income taxation or is not exempt from
federal income taxation;
(c) Establish the
principal amounts, redemption provisions, optional or mandatory tender
provisions, interest rates or methods for determining variable or adjustable
interest rates, denominations and other terms and conditions of the bonds;
(d) Establish maturity
dates for bonds to provide for short-term, interim or long-term borrowing;
(e) Determine the form
and content of a bond offering or disclosure document;
(f) Structure, market
and issue bonds in the manner that the State Treasurer determines is in the
best interest of the people of the State of Oregon; and
(g) Invest moneys held
in connection with or derived from obligations, as defined in section 17 of
this 2007 Act, without regard to the fund or account to which the moneys are
credited under other provisions of law, alone or with other invested moneys. In
addition, the State Treasurer may:
(A) Establish funds and
accounts separate and distinct from the General Fund in order to invest the
moneys as provided in ORS 293.701 to 293.820 and to arrange for redemption or
purchase of bonds; and
(B) Segregate or pool
moneys in order to promote financial and administrative efficiency and prudence
in the management of moneys derived from obligations, as defined in section 17
of this 2007 Act, moneys available for bond repayment and other moneys, and in
the administration of bond programs.
(3) Subject to the
approval of the State Treasurer, moneys described in subsection (2)(g) of this
section may be held by a trustee under a trust agreement, indenture, bond
declaration or similar instrument and may be invested by the trustee at the
direction of the related agency for which the moneys are held by the trustee.
If consistent with the trust agreement, indenture, bond declaration or similar
instrument, a related agency may authorize a trustee to invest on behalf of the
agency in the investment funds or with other moneys invested by the State
Treasurer under ORS 293.701 to 293.820 and may authorize a transfer of the
moneys from the State Treasurer to the trustee.
(4) In addition to
authority conferred by law other than this section, the State Treasurer or,
with the approval of the State Treasurer, a related agency may:
(a) Execute and deliver
indentures, trust agreements, auction agent agreements, broker-dealer
agreements, tender agent agreements, bond declarations or similar instruments
and other contracts related to the sale, issuance or security of the bonds;
(b) Deposit funds with
trustees for the benefit of bond owners and the providers of credit enhancement
devices; and
(c) Enter into covenants
for the benefit of bond owners or the providers of credit enhancement devices.
(5) The covenants
authorized by subsection (4)(c) of this section:
(a) May include, but are
not limited to, covenants regarding the issuance of additional bonds, the
priority of payment of bonds and, if authorized by law other than this section,
the imposition and collection of rates, fees or other charges; and
(b) Are intended to:
(A) Improve the security
of bond owners or providers of credit enhancement devices; or
(B) Maintain the
tax-exempt status of interest payable on bonds.
(6) In addition to
authority conferred by law other than this section, in consultation with the
related agency, the State Treasurer may establish a debt service reserve for
the purpose of paying when due the amounts owing on the bonds for which the
debt service reserve is established. The debt service reserve may be funded out
of the proceeds derived from the issuance and sale of the bonds for which the
debt service reserve is being established or from other lawfully available
funds.
(7) In consultation with
the related agency, the State Treasurer shall select the underwriters for the
sale of the bonds requested by the related agency. An agreement with the
underwriters may be executed by the State Treasurer alone or with the related
agency. An agreement with underwriters is not subject to the Public Contracting
Code.
SECTION 8. (1) In addition to authority conferred by
law other than this section, a related agency, with the approval of the State
Treasurer, or the State Treasurer may:
(a) Enter into a credit
enhancement device agreement in order to provide liquidity or security for
bonds or for an agreement for exchange of interest rates. The credit
enhancement device may be secured only by moneys that the State of
(b) Obtain a credit
enhancement device providing additional security for:
(A) The payment of all
or a portion of amounts owing under bonds;
(B) The purpose of
funding, in lieu of cash, all or a portion of a debt service reserve established
with respect to bonds; or
(C) The payment of
amounts owing under an agreement for exchange of interest rates.
(2) The related agency,
with the approval of the State Treasurer, or the State Treasurer may pledge as
security for the obligations of the State of Oregon arising under or with
respect to a credit enhancement device all or a portion of revenues pledged to
the payment of the bonds related to the credit enhancement device.
(3) The State Treasurer
may issue a bond to the provider of a credit enhancement device to secure the
obligations of the State of
(Bond Budget Authorization)
SECTION 9. (1) Each related agency shall report the
plans of the related agency for the issuance of bonds during the next biennium.
The related agency shall submit the related agency’s report to the Governor by
a date determined by the Governor and shall include in the report a description
of bonds that the related agency intends to retire or defease during the next
biennium.
(2) On or before a date
determined by the Governor, the State Treasurer shall advise the Governor on
the prudent maximum amount of bonds to be issued for each bond program. The
State Treasurer shall consider available economic and financial data in preparing
advice to be given to the Governor.
(3) As part of the
Governor’s budget report described in ORS 291.216, the Governor shall:
(a)
Consider the prudent maximum amounts advised by the State Treasurer pursuant to
subsection (2) of this section to determine the Governor’s total recommended
amount; and
(b) Recommend to the
Legislative Assembly the total amount of bonds the State Treasurer may issue
for each bond program for a biennium.
(4) The Legislative
Assembly shall determine the amount of bonds the State Treasurer may issue for
each state agency for a biennium. If the Legislative Assembly fails to make the
determination described in this subsection by the first day of the biennium,
the unused portion of the authorization the Legislative Assembly made for the
preceding biennium is deemed to carry forward for the
current biennium at the amount authorized for the preceding biennium until the
earlier of:
(a) The date on which
legislation authorizing the amount of bonds for the current biennium is enacted;
or
(b) The date on which
the Legislative Assembly adjourns sine die.
(5) The amount of bonds
that may be issued under bond programs may be modified by the Governor.
However, the Governor may not modify the amount of bonds that may be issued
under bond programs in a way that would cause the maximum amount established by
the Legislative Assembly for a category of bond programs to be exceeded if the
Legislative Assembly:
(a) Has categorized the
bonds that may be issued under bond programs as general obligation, direct
revenue and pass-through revenue bonds; and
(b) Assigned a maximum
amount to each category.
(6) This section applies
to bonds:
(a) Unless the bonds are
expressly exempted from the requirements of this section.
(b) Except refunding
bonds.
(Agreements for Exchange of Interest Rates)
SECTION 10. (1) A related agency with the approval of
the State Treasurer, or the State Treasurer on behalf of a related agency, may
enter into agreements for exchange of interest rates with counterparties. Agreements
for exchange of interest rates may be made to manage payment, interest rate,
spread or similar exposure undertaken in connection with a related bond upon a
determination by the related agency, or by the State Treasurer on behalf of the
related agency, that the agreement benefits the State of Oregon.
(2) Subject to covenants
applicable to a related bond and the limitations of this section, payments
required under an agreement for the exchange of interest rates by the related
agency, or the State Treasurer on behalf of the related agency, may:
(a) Be treated as
interest payments on the related bond;
(b) Be made from
revenues or other moneys that are pledged or otherwise committed to pay the
related bond; and
(c) Rank in an order of
priority of payment relative to the payment of the related bond as the related
agency, or the State Treasurer on behalf of the related agency, determines.
(3) In connection with
entering into an agreement under this section, a related agency, or the State
Treasurer on behalf of the related agency, may enter into a credit enhancement
device for an agreement for exchange of interest rates.
(4) An agreement for
exchange of interest rates is subject only to the limitations of this section
and is not subject to a limitation applicable to the related bond.
(5) With the approval of
the State Treasurer, a related agency may use moneys derived from the issuance
and sale of bonds to pay termination payments due under an agreement entered
into under this section.
(6) A related agency,
with the approval of the State Treasurer, may:
(a) Create reserves to
pay amounts due under an agreement for exchange of interest rates; and
(b) Fund the reserves
with moneys derived from the issuance and sale of bonds or from revenues or
other moneys described in subsection (2)(b) of this
section.
(Tax Anticipation Bonds)
SECTION 11. (1) The State Treasurer may issue bonds to
finance all or a portion of the current expenses of this state. The amount of
bonds issued under this section at any time may not exceed the State Treasurer’s
estimate of the cash flow deficit in revenues available to pay the expenses
that are financed with the bonds, plus amounts for reasonable reserves and
costs.
(2) To estimate the
amount of cash flow deficit, the State Treasurer shall take into account the
most recent cash flow forecast made by the Oregon Department of Administrative
Services and any other information the State Treasurer determines is reliable
and relevant.
(3) When the State
Treasurer issues bonds under this section:
(a) The Oregon
Department of Administrative Services shall account for and administer the
proceeds of the bonds and the repayment of the bonds. The State Treasurer, in
consultation with the Oregon Department of Administrative Services, shall
determine the appropriate investment strategy for the proceeds of the bonds.
The State Treasurer shall notify the Director of the Oregon Department of
Administrative Services, the Legislative Fiscal Officer and the Legislative
Revenue Officer before issuing bonds under this section.
(b) The State Treasurer
may pledge:
(A) All or a portion of
the revenues of the State of
(B) The full faith and
credit of the State of Oregon to pay bonds issued under this section if the
bonds are payable from the Short Term Borrowing Account established under ORS
293.175 and the bonds mature not later than the end of the biennium in which
the bonds are issued.
(c) A state agency may
use the proceeds of bonds issued under this section:
(A) For a purpose for
which the revenues that are pledged to pay the bonds may be used;
(B) To pay principal,
interest and premium, if any, on the bonds or a rebate or penalty due to the
United States in connection with the bonds;
(C) To pay the cost of
credit enhancement devices with respect to the bonds;
(D) To pay the costs of
the State Treasurer and the Oregon Department of Administrative Services of
issuing, administering or maintaining the bonds including, but not limited to,
the cost of a consultant or adviser retained by the State Treasurer or the
Oregon Department of Administrative Services; or
(E) To make payments
with respect to agreements for the exchange of interest rates.
(4) This section
constitutes complete authority for the State Treasurer to issue bonds described
in this section.
(5) Section 9 of this
2007 Act does not apply to bonds authorized by this section.
(6) The requirements and
limitations that apply to certificates of indebtedness issued under ORS 293.165
do not apply to bonds issued by the State Treasurer under this section.
(7) This section and ORS
293.175 constitute complete authorization by the Legislative Assembly for the
use and expenditure of the proceeds of the bonds and the revenues pledged to
pay those bonds for the purposes described in subsection (3)(c) of this
section. Additional appropriation or authorization is not necessary. The
authorization contained in this section and ORS 293.175 to spend moneys for the
purposes described in subsection (3)(c) of this
section does not constitute an appropriation for purposes of ORS 291.357.
(8) The proceeds of
bonds issued by the State Treasurer under this section do not constitute
revenues received by the General Fund for purposes of section 14, Article IX of
the
(9) The State Treasurer
may perform the duties and exercise the powers of a related agency under this
section.
SECTION 12. ORS 293.175 and 293.177 are added to and
made a part of ORS chapter 286.
SECTION 13. ORS 293.175 is amended to read:
293.175. (1) The Short
Term Borrowing Account is created in the General Fund.
(2) The State Treasurer
shall credit the proceeds of [obligations]
bonds issued by the State Treasurer under [ORS 288.165] section 11 of this 2007 Act to the Short Term
Borrowing Account. The State Treasurer shall, in addition, transfer to the
Short Term Borrowing Account any amounts that are pledged to pay [obligations] bonds issued by the
State Treasurer under [ORS 288.165] section
11 of this 2007 Act and that are required to pay those [obligations] bonds.
(3) Amounts in the Short
Term Borrowing Account are continuously appropriated to the respective state
agencies for which the revenues that are pledged to pay the bonds were
appropriated, for the purposes described in [ORS 293.173 (3)(c)] section 11 (3)(c) of this 2007 Act. Amounts
appropriated under this subsection may not be taken into account in preparing
budget estimates, plans or reports required to be prepared under ORS 291.201 to
291.222.
[(4) This section and ORS 293.173 constitute complete authorization by
the Legislative Assembly for the use and expenditure of the proceeds of the
obligations and the taxes and revenues pledged to pay those obligations for the
purposes described in ORS 293.173 (3)(c). No additional appropriation or
authorization is necessary. The authorization contained in this section and ORS
293.173 to spend moneys for the purposes described in ORS 293.173 (3)(c) does not constitute an appropriation for purposes of
ORS 291.357. The proceeds of obligations issued by the State Treasurer under
ORS 288.165 do not constitute revenues received by the General Fund for
purposes of section 14, Article IX of the
SECTION 14. ORS 293.177 is amended to read:
293.177. Within 90 days
following the end of a biennium, the State Treasurer shall report in writing to
the Legislative Fiscal Officer and the Legislative Revenue Officer on the
amount of [obligations] bonds
issued by the State Treasurer under [ORS
288.165] section 11 of this 2007 Act, the amount spent in repayment
of those [obligations] bonds,
the issuance costs and interest costs of those [obligations] bonds and the interest revenues earned by the
proceeds of those [obligations]
bonds.
(Debt Limit Calculation)
SECTION 15. (1) When calculating compliance with a
constitutional or statutory debt limit:
(a) If a bond is issued
to a provider of a credit enhancement device for a bond that is subject to a
debt limit, the bond issued to the provider must be taken into account only to
the extent that the amount of the bond issued to the provider exceeds the
amount of the bond that is secured by the credit enhancement device.
(b) The amount of
interest to be paid on bonds, whether paid currently or deferred,
is not taken into account.
(c) For a zero coupon
bond or other original issue discount bond on which periodic interest payments
are not made, only the accreted value of the bond on the date the bond is
issued is taken into account.
(d) The state may deduct
from the amount of outstanding bonds:
(A) The amount of moneys
and investments held by the state or a trustee of the state to pay bonds that
have not been defeased; and
(B) The principal amount
of bonds that have been defeased.
(2) For purposes of this
section, a bond is defeased if:
(a) The state has set
aside in an irrevocable escrow government obligations, as defined in section 57
of this 2007 Act, the receipts from which have been calculated by a certified
public accountant or other experienced professional to be sufficient, without
reinvestment, to pay the principal, interest and premium, if any, due on the
bond at maturity or on prior redemption; or
(b) The state has
complied with the provisions in the documents authorizing the bond that provide
for the payment or defeasance of the bond.
NOTE:
Section 16 was deleted by amendment. Subsequent sections were not renumbered.
(Payment of Bonds:
Pledges, Liens and Collateral)
SECTION 17. As used in this section and section 18 of
this 2007 Act:
(1) “Obligation” means:
(a) A bond;
(b) An agreement for
exchange of interest rates with the State of
(c) A credit enhancement
device given as additional security for a bond.
(2) “Operative document”
means a bond declaration, trust agreement, indenture, security agreement or
other document in which the State of
(3) “Pledge” means:
(a) To create a security
interest in or a lien on property to secure payment or performance of an obligation,
by mortgaging, assigning or encumbering property or by creating a security
interest in property by any other manner.
(b) A security interest
in or lien on property created under paragraph (a) of this subsection.
(4) “Pledgee” means:
(a) A trustee for the
holder of an obligation; or
(b) The holder of an
obligation if a trustee was not appointed in the operative document or if the
operative document authorizes the holder of an obligation to foreclose the lien
of a pledge and enforce the remedies consequent to the pledge in lieu of the
trustee.
(5) “Property” means:
(a) Real or personal
property, tangible or intangible, whether owned when the pledge is made or
acquired subsequently to the time the pledge is made; and
(b) Revenues, contract
rights, receivables or securities.
SECTION 18. (1) The Uniform Commercial Code does not
apply to the creation, perfection, priority or enforcement of a lien of a
pledge made by a state agency or the State Treasurer.
(2) When authorized by
law to secure obligations with property of the State of Oregon, a state agency,
or the State Treasurer acting under the State Treasurer’s own authority or on
behalf of a state agency with the approval of the state agency, may pledge all
or a portion of the property as security for payment of the obligations and for
performance of a covenant or agreement entered into in relation to the issuance
of the obligations.
(3) The lien created by
a pledge described in subsection (2) of this section is valid and binding from
the time the pledge is made. Pledged property is subject immediately to the
lien of the pledge without physical delivery, filing or any other act.
(4) Except as otherwise
expressly provided in an operative document, the lien of the pledge is superior
to and has priority over all other claims and liens of any kind.
(5) When property
subject to a pledge is acquired by the State of
(a) The property is
subject to the lien upon acquisition by the State of
(b) The lien relates
back to the time the pledge was originally made.
(6)(a) The State
Treasurer, or the related agency, may reserve the right to pledge property as
security for a subsequently issued obligation.
(b) If the State
Treasurer or related agency reserves the right described in paragraph (a) of
this subsection, subject to the terms of the operative document that created
the previous pledge, the lien of the subsequent pledge may be on a parity or
pari passu basis with the lien of the previous pledge, on a prior and superior
basis with the lien of the previous pledge or on a subordinate basis with the
lien of the previous pledge, as specified in the operative document creating
the subsequent pledge. The lien of the subsequent pledge:
(A) Has the priority
specified in the operative document creating the subsequent pledge; and
(B) Is superior to and
has priority over other claims and liens of any kind except the lien of a
pledge with which the lien of the subsequent pledge is on a parity or
subordinate basis, as specified in the operative document.
(7) Except as provided
in subsection (8) of this section, a pledgee may commence an action in a court
of competent jurisdiction to foreclose the lien of the pledge and exercise
rights and remedies available to the pledgee under the operative document.
(8) When pledged
property is in a fund for debt service reserves or payments, a pledgee may
foreclose the lien of the pledge by applying the property to the payment of
obligations subject to the terms, conditions and limitations in the operative
document.
(9) An initiative or
referendum measure approved by the electors of the State of Oregon that
purports to change statutory provisions affecting rates, fees, tolls, rentals or
other charges may not be given any force or effect if to do so would impair
existing covenants made with holders of existing obligations regarding the
imposition, levy or collection of the rates, fees, tolls, rentals or other
charges pledged to secure outstanding obligations.
(10) If authorized by
law other than this section to set rates, fees or other charges that are
pledged to pay obligations, a state agency may enter
into rate covenants. Rate covenants authorized by this subsection may obligate
a state agency to periodically set the rates and charges:
(a) That generate
pledged revenues at specific levels including, but not limited to, a specific
monetary charge for each unit of commodity or service provided or a schedule of
rates and charges that includes fixed and variable components;
(b) At levels sufficient
to maintain underlying credit ratings assigned to obligations by one or more
nationally recognized credit rating services without regard to any improvement
in credit ratings due to the provision of additional security for the
obligations by a credit enhancement device;
(c) That generate
pledged revenues each year in amounts at least equal to operations and
maintenance expenses of the state agency that produces the pledged revenues,
plus debt service on obligations, plus an additional amount that is reasonably
required to obtain favorable terms for the obligations; or
(d) In accordance with a
formula established in the operative document governing obligations. The
formula may provide for rates to be determined by reference to factors
including, but not limited to:
(A) Historical operating
expenses;
(B) Projected future
operating expenses;
(C) The funding of
depreciation;
(D) The costs of capital
improvements;
(E) The costs of
complying with contractual requirements and covenants;
(F) The costs of
complying with regulatory requirements;
(G) Reports of
independent consultants regarding the required level of pledged revenues;
(H) Debt service on the
obligations; and
(I) The funds needed to establish
or maintain reserves required by law or contract and the funds needed to
maintain an unencumbered carryforward fund balance or working capital to meet
unanticipated expenses or fluctuations in revenues that may arise.
(11) A rate covenant
authorized by this section is a contract that binds the State of
(12) The State
Treasurer, or a related agency with the approval of the State Treasurer, may
pledge the full faith and credit of the State of
NOTE:
Section 19 was deleted by amendment. Subsequent sections were not renumbered.
(Administration of Bond Programs)
SECTION 20. (1) The State Treasurer or a related agency
may enter into one or more agreements for bond counsel services for a period of
not less than one year during any biennium in which there are bonds outstanding
that were issued for the state agency or during any biennium in which the state
agency expects the State Treasurer to issue bonds for an agency program. A
state agency may not enter into an agreement for bond counsel services unless
the State Treasurer and the Attorney General have reviewed and approved the
terms and conditions of the agreement. Before approving an agreement, the State
Treasurer shall consider the reputation, experience and credentials of the bond
counsel, including the individuals expected to actually fulfill the contract
work.
(2) Except as provided
in subsection (3) of this section, the appointment of bond counsel may not be
construed as authorizing bond counsel to advise or represent the state on
matters that are committed by statute to the Attorney General.
(3) The services
provided under a bond counsel agreement may include:
(a) Advising a state
agency or the State Treasurer concerning the legality of specific proposed
taxable or tax-exempt bonds and the compliance of obligations with applicable
law, including but not limited to federal securities and tax laws;
(b) Issuing opinions to
a state agency, the State Treasurer or other parties concerning the
enforceability of, authority for and tax status of bonds, agreements for
exchange of interest rates, credit enhancement devices or similar associated
documents and on the lawful use of the proceeds of the bonds, as may be
required by the demands of the marketplace for the bonds;
(c) Advising a state
agency or the State Treasurer on legal procedures and practices in the bond
marketplace, including advice on the structuring and sale of bonds;
(d) Preparing or
assisting in the preparation of documents related to a specific issue of bonds,
including but not limited to an authorizing resolution or declaration, a trust
indenture, a prospectus, a preliminary official statement, an official
statement, a bond sale notice, a bond form, a bid form, a bond purchase agreement,
an agreement for exchange of interest rates, a credit enhancement device or a
similar document necessary or desirable to sell bonds;
(e) Advising a state
agency or the State Treasurer concerning the maintenance of the tax status of
specific bonds, compliance with any requirements for representations or
disclosures relating to the bonds, compliance with any documents executed as
part of the issuance of the bonds and federal laws related to bond programs
that may be available to a state agency;
(f) Advising a state
agency or the State Treasurer concerning accounting, investment or
administrative procedures recommended or required for compliance with federal
or state securities or tax or rebate requirements relating to bonds that were
issued for the agency or that the agency expects to issue; and
(g) Advising and
assisting a state agency or the State Treasurer in responding to an inquiry
received from or an audit by a federal or state regulatory body concerning:
(A) The tax status of
interest paid on the bonds;
(B) The marketing of the
bonds;
(C) Requirements of
federal law related to the use of bond proceeds or the program for which the
bonds were issued; or
(D) Other matters within
the jurisdiction of the federal or state regulatory body relating to bonds that
were issued by the state agency.
(4) In addition to
entering into an agreement described in subsection (3) of this section, the
State Treasurer or a related agency may appoint bond counsel by letter,
certificate or otherwise, to provide the services described in subsection (3)
of this section for an individual conduit revenue bond sale.
(5) The State Treasurer
or, with the approval of the State Treasurer, a related agency may enter into
an agreement with and retain the services of one or more providers of financial
advisory services. When considering whether to enter into or approve an
agreement with a provider of financial advisory services, before approving the
agreement, the State Treasurer shall consider the reputation, experience and
credentials of the adviser, including the individuals expected to actually
fulfill the contract work.
(6) Except for the
expenses of bond counsel services provided under subsection (4) of this section
for conduit revenue bond sales, the related agency shall pay the expenses of
any agreements entered into under this section and may use bond proceeds to pay
those expenses.
(7) The Public
Contracting Code does not apply to agreements entered into under this section.
SECTION 21. (1) In addition to authority conferred by
law other than this section, the State Treasurer or, with the approval of the
State Treasurer, a related agency may enter into an agreement with and retain
the services of one or more:
(a) Providers of
investment advisory services or advisory services related to agreements for
exchange of interest rates;
(b) Providers of banking
services;
(c) Escrow agents;
(d) Providers of fiscal
or paying agent services;
(e) Collateral
custodians;
(f) Providers of
investment contracts;
(g) Remarketing agents;
or
(h) Other bond-related
or credit enhancement device-related agents or service professionals, or other
persons with relevant expertise, to assist the State Treasurer or the related
agency in the performance of the duties of the State Treasurer or the related
agency under this chapter.
(2) The related agency
shall pay the expenses incurred in providing the services described in this
section unless the related agency requires a recipient of bond sale proceeds to
pay the expenses.
(3) The Public
Contracting Code does not apply to an agreement entered into under this
section.
(4) When the Oregon
Constitution or a law of this state authorizes bond proceeds to be spent for a
particular purpose, the authorization also includes authorization to spend bond
proceeds for bond counsel, attorney, consultant, fiscal or paying agent,
trustee or other professional fees and other expenses incurred by the related
agency or the State Treasurer to authorize, issue, administer and repay the
bonds, including fees payable to the State Treasurer.
(State Taxation of Bond Interest)
SECTION 22. Interest on all bonds of the State of
(Federal Taxation of Bond Interest)
SECTION 23. The State Treasurer or a related agency may
enter into covenants for the benefit of owners of bonds that are intended to
allow the bonds to bear interest that is excludable from gross income under the
federal Internal Revenue Code or that is otherwise exempt from taxation by the
United States. The State Treasurer or a related agency may adopt rules or
procedures that are intended to facilitate compliance with those covenants, and
may take any action that is required to comply with those covenants. Covenants
authorized by this section include, but are not limited to, covenants to:
(1) Pay any rebates of
earnings or penalties to the
(2) Invest proceeds
alone or in combination with other moneys in investments that have different
maturities, yields or credit qualities than the state would acquire under the
investment standards specified in ORS 293.721 and 293.726 and other similar
laws, but only if those investments facilitate compliance with covenants
described in this section; or
(3) Restrict the
expenditure of bond proceeds or restrict the operation of, or otherwise limit
the use of, facilities that are financed with bonds.
(Remitting Funds)
SECTION 24. (1) The State Treasurer may adopt rules, or
establish by contract or policy, procedures and requirements for the
cancellation, purchase or redemption of bonds, the remittance of funds to pay
bonds, or the replacement of lost or destroyed evidence of bonds or interest
coupons.
(2) If the State
Treasurer decides:
(a) To replace lost or
destroyed evidence of bonds or coupons, or to make payment in lieu of
replacement, the State Treasurer may require indemnity, deposit or other form
of assurance or proof of ownership to ensure against conflicting, duplicative
or fraudulent claims. The State Treasurer may charge a fee to the person
seeking replacement or payment in lieu of replacement under this section, in an
amount sufficient to reimburse the State Treasurer for costs incurred in
providing replacement or payment under this subsection.
(b) Not to replace or
make payment with respect to a lost or destroyed bond or coupon, the person
seeking replacement or payment under this section may appeal the determination
as a review of an order other than a contested case under ORS 183.484.
(Public Records)
SECTION 25. The records of bond ownership are not
public records for purposes of ORS 192.410 to 192.505 or other law governing
the disclosure of information.
(Secretary of State Audits)
SECTION 26. (1) The Secretary of State shall conduct a
financial audit of the bond programs of each state agency at least annually.
The Secretary of State shall publish the audit as soon as possible following
the end of the audit period.
(2) The Oregon
Department of Administrative Services may, on an annual basis, exempt a bond
program from the requirements of subsection (1) of this section.
(State Debt Policy Advisory Commission)
SECTION 27. ORS 286.555 is amended to read:
286.555. The State Debt
Policy Advisory Commission shall advise the Governor and the Legislative
Assembly regarding policies and actions that enhance and preserve the state’s
credit rating and maintain the future availability of low-cost capital
financing. In carrying out this function, the commission shall at least
annually prepare a report showing the consolidated bond profile of this state.
The report must include:
(1) The total amount
of outstanding bonds for the most recently concluded fiscal year.
[(1)] (2) [Develop]
A six-year forecast of [debt] the
state’s borrowing capacity targets by [debt
type and] repayment source based on the policies and actions established
under this section.
[(2) Convert debt capacity targets to net available capacity estimates
by reflecting amounts of capacity currently issued,
the planned issuance of prior authorized debt and estimates of debt repayment.]
[(3) Report findings, including net debt
capacity, and recommendations to the Governor and to the Legislative Assembly
by April 1 of each even-numbered year.]
(3) A calculation of
the state’s net remaining borrowing capacity by repayment source.
(Private Activity Bond Committee)
SECTION 28. ORS 286.605 is amended to read:
286.605. As used in ORS
286.605 to 286.645:
(1) “Issuer” means an
entity that may issue private activity bonds that are qualified bonds on which
the interest is exempt from federal taxation.
(2) “Private activity
bonds” has the meaning given in section 141 of the Internal Revenue Code [of 1986].
SECTION 29. ORS 286.615 is amended to read:
286.615. (1) The Private
Activity Bond Committee is established. It shall consist of the State
Treasurer or the designee of the State Treasurer, one representative [each] from the Oregon Department of
Administrative Services and [from the
State Treasurer and] one public representative appointed to serve at the
pleasure of the Governor.
(2) The [representative from the department]
State Treasurer, or the State Treasurer’s designee, shall serve as chair of
the committee.
(3) The purpose of
private activity bonding in this state [shall
be] is to maximize the economic benefits of [such] private activity bonding to the citizens of this
state. [To this end,] The committee
shall adopt by rule standards for amounts [allotted
to it] allocated to the committee for further allocation for
economic development, housing, education, redevelopment, public works, energy,
waste management, waste and recycling collection, transportation and other
activities [which] that the
committee determines will benefit the citizens of this state. In developing
standards, the committee shall:
(a) Survey the expected
need for private activity bond allocations at least once each year;
(b) Develop strategies
for reserving and allocating the limit [which]
that are designed to maximize the availability of tax exempt financing
among competing sectors of the Oregon economy; and
(c) Ensure that [such] the standards include but
are not limited to standards that:
(A) Support projects
that increase the number of family wage jobs in this state.
(B) Promote economic
recovery in small cities heavily dependent on a single industry.
(C) Emphasize
development in underdeveloped rural areas of this state.
(D) Utilize educational
resources available at institutions of higher education.
(E) Support development
of the state’s small businesses, especially businesses owned by women and
members of minority groups.
(F) Encourage use of
[(G) Limit assistance to projects that assist businesses selling goods
and services in markets for which national or international competition exists.]
(4) The state private
activity bond [limit allotted]
volume cap allocated to the Private Activity Bond Committee as provided in
[ORS 286.635] section 31 of this
2007 Act shall be allocated and reallocated among issuers by the Private
Activity Bond Committee as follows:
(a) Any amounts not
reserved to an issuer or a class of issuers under the [limitation] authorization adopted by the Legislative
Assembly under [ORS 286.525]
section 9 of this 2007 Act shall be allocated or reallocated by the
committee under rules adopted under subsection (3) of this section.
(b) Any amounts provided
for in the [limitation under ORS 286.525]
authorization adopted by the Legislative Assembly under section 9 of this 2007
Act that are unused shall be carried forward for use as provided by rules
adopted under subsection (3) of this section.
(c) The rules adopted by
the committee shall limit the period of time for which an allocation of private
activity bonding authority is effective. [Such]
The rules shall [insure]
ensure that allocations made during a calendar year [shall be] are used during that calendar year or that
the unused amount of the allocation [shall
be] is reallocated [during
that calendar year] or carried forward.
(5) Unused allocations [shall not be] are not
transferable among issuers but [shall be]
are available for reallocation.
SECTION 30. Section 31 of this 2007 Act is added to and
made a part of ORS 286.605 to 286.645.
SECTION 31. The Legislative Assembly may allocate the
amount of private activity bond volume cap among state agencies and the Private
Activity Bond Committee for the two calendar years that begin in a biennium.
Any volume cap that the state receives that is not allocated by the Legislative
Assembly may be allocated by the Private Activity Bond Committee.
SECTION 32. ORS 286.645 is amended to read:
286.645. The [office of] State Treasurer shall
maintain the official state private activity bond [limit] volume cap records and provide administrative support
to the Private Activity Bond Committee [and
the Advisory Council on the Allocation of the State Private Activity Bond Limit].
(Baccalaureate Bonds)
SECTION 33. (1) As used in this section:
(a) “
(b) “Post-secondary
education” means training and instruction provided by fully accredited public
or private institutions of higher learning, community colleges and
post-high-school career schools.
(2) The Legislative
Assembly encourages citizens of the State of
(3) The Legislative
Assembly finds:
(a) For the benefit of
its citizens, the state supports a system of common schools, institutions of
higher education and community colleges.
(b) A post-secondary
education advances a citizen’s ability to pursue life, liberty and happiness
through a wide range of employment opportunities.
(c) A well-educated
citizenry contributes to the economic well-being of the state and nation.
(d) A well-trained and
skilled citizenry enhances economic development of the state.
(e) While students have
just begun their education upon completion of a formal education, a lifetime
pursuit of learning contributes to a well-informed citizenry and to
(f) Citizens educated in
(g) It is in the
interest of this state to encourage its citizens to plan and save for a
post-secondary education.
(h) An
(i) A systematic way to
save for post-secondary education can assist all of
(4) At the request of
the
(a) Issue bonds as
(b) Investigate and
implement the means and procedures to facilitate the participation by the
broadest practical range of investors in the
(5) The purchase of an
(Lottery Bonds)
SECTION 34. (1) ORS 286.560 to 286.580 are added to and
made a part of ORS chapter 286.
(2) ORS 286.585 is added
to and made a part of ORS 286.560 to 286.580.
SECTION 35. ORS 286.560 is amended to read:
286.560. As used in ORS
286.560 to 286.580[,] and
327.700 to 327.711 [and 348.716],
unless the context requires otherwise:
(1) “Appropriated funds”
for a particular fiscal year means any moneys, other than unobligated net
lottery proceeds, that are specifically appropriated or otherwise specifically
made available by the Legislative Assembly or the Emergency Board for a fiscal
year to replenish reserves established as additional security for lottery bonds
pursuant to the authority granted in ORS 286.580 (6).
(2) “Bond-related costs”
means:
(a) The costs and
expenses of issuing, administering and maintaining lottery bonds and the
lottery bond program, including but not limited to paying or redeeming lottery
bonds, paying amounts due in connection with credit enhancements or any
instruments authorized by ORS 286.580 (6) and paying the administrative costs
and expenses of the State Treasurer and the Oregon Department of Administrative
Services, including costs of consultants or advisors retained by the State
Treasurer or the Oregon Department of Administrative Services for the lottery
bonds or the lottery bond program;
(b) The costs of funding
any lottery bond reserves;
(c) Capitalized interest
for lottery bonds;
(d) Rebates or penalties
due to the
(e) Any 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 lottery bonds or maintaining the lottery bond program.
(3) “Lottery bonds”
means:
(a) The state park
lottery bonds authorized by ORS 390.060 to 390.067, the infrastructure lottery
bonds authorized by ORS 285B.530 to 285B.548 and the education lottery bonds
authorized by ORS 327.700 to 327.711;
(b) Any other bonds
payable from the revenues of the Oregon State Lottery unless the legislation
authorizing those bonds expressly provides that those bonds [shall] may not be issued under
ORS 286.560 to 286.580 [and 348.716];
and
(c) Any refunding
lottery bonds.
(4) “Lottery Bond
Administrative Fund” means the fund created by ORS 286.573.
(5) “Lottery Bond Fund”
means the fund created by ORS 286.570.
(6) “Lottery bond
program” means a financing program authorized by:
(a) ORS 285B.530 to
285B.548, 327.700 to 327.711 or 390.060 to 390.067; or
(b) Any other Act of the
Legislative Assembly authorizing the issuance of bonds that are payable from
the revenues of the Oregon State Lottery, unless the legislation authorizing
those bonds expressly provides that those bonds [shall] may not be issued under ORS 286.560 to 286.580 [and 348.716].
(7) “Refunding lottery
bonds” means any bonds issued for the purpose of refunding any lottery bonds.
(8) “Unobligated net
lottery proceeds” means all revenues derived from the operation of the Oregon
State Lottery except for:
(a) The revenues used
for the payment of prizes and expenses of the Oregon State Lottery as provided
in section 4 (4)(d), Article XV of the Oregon
Constitution, and ORS 461.500 and 461.510;
(b) The revenues
required to be applied, distributed or allocated as provided in ORS 461.543;
and
(c) The revenues
required to be allocated to pay the Westside lottery bonds and any bonds issued
to refund the Westside lottery bonds, to fund reserves for any of those bonds
and to pay related costs of the Department of Transportation.
(9) “Westside lottery
bonds” means the bonds issued by this state under the authority granted in ORS
391.140 that, notwithstanding ORS 267.334, 285B.419, 285B.422, 285B.482,
285B.530 to 285B.548, 286.560 to 286.580, 327.700 to 327.711[, 348.716] and 390.060 to 390.067, shall
have a claim on lottery funds that is superior to the claim of the lottery
bonds authorized by ORS 286.560 to 286.580 [and
348.716].
SECTION 36. ORS 286.563 is amended to read:
286.563. (1) The
Legislative Assembly declares that the purpose of ORS 286.560 to 286.580 [and 348.716] is to combine previously
enacted legislation authorizing lottery bonds into a single Act that provides
uniform administrative procedures for all lottery bonds issued by the State of
Oregon.
(2) The lottery bonds
issued under ORS 286.560 to 286.580 [and
348.716] shall be special obligations of the State of Oregon that are
payable solely from unobligated net lottery proceeds, amounts available in the
Lottery Bond Fund and in any reserve accounts established for lottery bonds
under ORS 286.560 to 286.580 [and 348.716]
and any appropriated funds. The faith and credit of the State of
SECTION 37. ORS 286.566 is amended to read:
286.566. (1) Any legislation authorizing issuance of lottery bonds under
ORS 286.560 to 286.580 [and 348.716]
shall:
(a) State the purposes
for which the proceeds of lottery bonds may be spent;
(b) Contain findings
that those uses are lawful uses of lottery revenues;
(c) Indicate the amount
of lottery bonds that may be issued under the legislation;
(d) Specify the fund
into which the net proceeds of those lottery bonds shall be deposited; and
(e) Provide for the
payment of the bond-related costs for the lottery bonds.
(2) Unless specifically
prohibited by the legislation authorizing lottery bonds:
(a) Any agency or other
entity holding net proceeds of lottery bonds shall, upon the written request of
the Director of the Oregon Department of Administrative Services, transfer to
the Oregon Department of Administrative Services for deposit in the Lottery
Bond Administrative Fund the amounts that the director states in the request
are reasonably required to pay for bond-related costs that are allocable to
those net proceeds.
(b) The agencies or other
entities receiving proceeds of lottery bonds shall, if so directed by the
Oregon Department of Administrative Services, take any action specified by the
Oregon Department of Administrative Services that is necessary to maintain the
excludability of lottery bond interest from gross income under the Internal
Revenue Code.
SECTION 38. ORS 286.580 is amended to read:
286.580. (1) [In accordance with any applicable provisions
of ORS chapters 286 and 288 and ORS 286.560 to 286.580 and 348.716,] The
State Treasurer, [with the concurrence]
at the request of the Director of the Oregon Department of
Administrative Services, may issue lottery bonds from time to time to finance
any lottery bond program and to pay costs of issuing lottery bonds and
administering the lottery bond program, and the State Treasury may be paid for
all bond-related costs the State Treasury incurs.
(2) Lottery bond
proceeds and unobligated net lottery proceeds may be used to pay bond-related
costs.
(3) In addition to
lottery bonds for any lottery bond program, the State Treasurer may, at the
request of the affected agency or the Oregon Department of Administrative
Services, issue one or more series of refunding lottery bonds. The refunding
lottery bonds shall be structured so that the amount required to pay those
bonds in each year does not exceed the amount of unobligated net lottery
proceeds that could have been committed to pay the lottery bonds that are
refunded. Refunding lottery bonds shall be issued in such amount as the State Treasurer
determines is necessary or appropriate in order to:
(a) Pay or defease the
principal of and the interest and redemption premium, if any, on the bonds to
be refunded; and
(b) Pay any bond-related
costs related to the refunding lottery bonds.
(4) All lottery bonds
issued under this section shall be payable from:
(a) The amount pledged
for payment under subsection (7) of this section; and
(b) Any appropriated
funds.
(5) The lottery bonds
shall not be general obligations of this state and shall not be secured by or
payable from any funds or assets of this state other than the amounts pledged
for payment or security and any appropriated funds. The Legislative Assembly
shall not be under any legal compulsion or obligation to provide any
appropriated funds and shall not be liable to any party for any failure to
provide appropriated funds. All lottery bonds issued under ORS 286.560 to
286.580 [and 348.716] shall contain a
statement that this state is not obligated to pay lottery bond principal,
interest or premium thereon from any source other than the amounts pledged for
payment and any appropriated funds, and that the full faith and credit or the
taxing power of the State of Oregon are not pledged to the payment of lottery
bond principal, interest or premium.
(6) The State Treasurer
may establish reserves for lottery bonds. The 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
(7) Notwithstanding any
other provision of law, the State Treasurer may pledge all or any portion of
the unobligated net lottery proceeds, amounts in the Lottery Bond Fund and any
unexpended lottery bond proceeds to pay lottery bonds and to pay amounts due in
connection with any credit enhancement or any instrument authorized by
subsection (6) of this section. The lien of such pledge shall be valid and
binding immediately upon delivery by the state of the lottery bonds, credit
enhancement agreement or instrument secured by the pledge. The amounts so
pledged shall be immediately subject to the lien of the pledge upon receipt of
the amounts by this state regardless of when or whether they are allocated or
transferred to the Lottery Bond Fund or the Lottery Bond Administrative Fund
and regardless of whether there was physical delivery, filing or other act.
Except to the extent provided in the pledge, the lien of the pledge shall be
superior to all other claims, liens and appropriations of any kind. The State
Treasurer may provide that lottery bonds may be issued in different series and
that each series may be secured by a lien on, and pledge of, the unobligated
net lottery proceeds that is superior to, subordinate to, or on a parity with, the lien of the pledge securing other series
of lottery bonds. Nothing in this section shall be construed to limit the
powers granted in any other part of ORS 286.560 to 286.580 [and 348.716].
(8) Any covenants made
under this section for the benefit of owners of lottery bonds shall constitute
contracts between the State of
(a) Except as permitted
by a pledge made under subsection (7) of this section, this state shall not
create any lien or encumbrance on the unobligated net lottery proceeds that is
superior to the liens of the pledges authorized by subsection (7) of this
section.
(b) Subject only to the
availability of unobligated net lottery proceeds, the State of Oregon shall
budget and appropriate in each fiscal year an amount of unobligated net lottery
proceeds that, when added to other funds lawfully budgeted and appropriated and
available for the purpose, will be sufficient:
(A) To pay in full the
principal, interest and premium due and to become due on all outstanding
lottery bonds in the fiscal year;
(B) To maintain the required
balance in any reserves established for lottery bonds; and
(C) To pay amounts due
to the providers of credit enhancement for lottery bonds or instruments
authorized by subsection (6) of this section.
(c) This state shall
apply the unobligated net lottery proceeds and any other amounts so budgeted
and appropriated for those purposes.
(d) This state shall
continue to operate the Oregon State Lottery until all lottery bonds are paid
or defeased.
(9) In connection with
the issuance of any lottery bonds, the State Treasurer may establish such
accounts and subaccounts within the Lottery 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 any agreements that the State Treasurer determines
are necessary or appropriate to issue lottery bonds and carry out the
provisions of ORS 286.560 to 286.580 [and
348.716] and all legislation authorizing lottery bond programs.
(10) If the State
Treasurer determines that the acquisition is cost-effective, the State
Treasurer may acquire a municipal bond insurance policy, letter of credit, line
of credit, surety bond or other credit enhancement device for lottery bonds,
and may enter into any related agreements.
(11) The State Treasurer
may provide that all or any portion of the Lottery Bond Fund, the Lottery Bond
Administrative Fund or any accounts in either fund shall be held by a trustee,
may enter into agreements with the trustee regarding the use and application of
the amounts held in those funds and accounts and may transfer amounts credited
to those funds and accounts to the trustee.
SECTION 39. ORS 286.585 is amended to read:
286.585. (1) Pursuant to
ORS 286.560 to 286.580 [and 348.716]
and subject to future legislative approval, lottery bonds may be issued to make
grants or loans to Oregon cities to fund projects for the reconstruction,
renovation or development of community sports facilities in order to make the
facilities suitable for use by a major league baseball team if a city is
selected as an expansion site by major league baseball or if a major league
baseball team agrees to relocate to a city.
(2) The use of lottery
bond proceeds is authorized based on the following findings:
(a) The financial
assistance to cities will assist in the construction, improvement and expansion
of infrastructure and community facilities that comprise the physical
foundation for commercial activity and provide the basic framework for
continued and expanded economic opportunities and quality communities
throughout
(b) Such financial
assistance to cities will therefore promote economic development within this
state, and thus the use of net proceeds derived from the operation of the
Oregon State Lottery to pay debt service on lottery bonds issued under this
section to provide such financial assistance to cities is an appropriate use of
state lottery funds under section 4, Article XV of the Oregon Constitution, and
ORS 461.510.
(3) Lottery bonds issued
pursuant to this section shall be issued only at the request of the Director of
the Economic and Community Development Department.
(4) The net proceeds of
lottery bonds issued pursuant to this section shall be deposited in the
Economic Infrastructure Project Fund established by ORS 285B.551. The Director
of the Economic and Community Development Department shall allocate the moneys
deposited in the Economic Infrastructure Project Fund for the purpose described
in this section in accordance with the policies developed by the Oregon
Economic and Community Development Commission in accordance with ORS 285A.045.
(5) The proceeds of
lottery bonds issued pursuant to this section shall be used only for the
purposes set forth in this section and for bond-related costs.
(State Bond Guarantee Intercept Program)
SECTION 40. ORS 328.346 is amended to read:
328.346. (1)(a) If one or more payments on school bonds are made by the
State Treasurer as provided in ORS 328.341, the State Treasurer shall pursue
recovery from the school district of all moneys necessary to reimburse the
state for all amounts paid by the treasurer to the paying agent, as well as
interest, penalties and any additional costs incurred by the treasurer as described
in this section. In seeking recovery, the State Treasurer may:
(A) Intercept any
payments from the General Fund, the State School Fund, the income of the Common
School Fund and any other source of operating moneys provided by or through
the state to the school district that issued the school bonds that would
otherwise be paid to the school district by the state; and
(B) Apply any
intercepted payments to reimburse the state for payments made pursuant to the
state guaranty until all obligations of the school district to the state
arising from those payments, including interest and penalties, and any
additional costs incurred by the treasurer as described in this section are
paid in full.
(b) The state has no
obligation to the school district or to any person or entity to replace any
moneys intercepted under authority of this section.
(c) The authority of
the State Treasurer to intercept payments under this subsection has priority
over all claims against money provided by the state to a school district,
including a claim that is based on a funds diversion agreement under ORS
238.698. A funds diversion agreement under ORS 238.698 has priority over all
other claims against money provided by the state to a school district.
(2) The school district
that issued school bonds for which the state has made all or part of a debt
service payment shall:
(a) Reimburse all moneys
drawn or paid by the State Treasurer on its behalf;
(b) Pay interest to the
state on all moneys paid by the state from the date the moneys were drawn to
the date they are repaid at a rate to be determined by the State Treasurer, in
the State Treasurer’s discretion, to be sufficient to cover the costs of funds
to the state plus the costs of administration of the state guaranty obligation
and of collection of reimbursement; and
(c) Pay any applicable
penalties as described in subsection (3) of this section.
(3)(a) The State
Treasurer shall establish the reimbursement interest rate after considering the
circumstances of any prior draws by the school district on the state, market
interest and penalty rates and the cost of funds, if any, that were required to
be used or borrowed by the state to make payment on the school bonds. The State
Treasurer shall have authority to establish, by negotiations with the school
district or otherwise, any plan of reimbursement by the school district that
will result in full and complete reimbursement to the state. Subject to the
requirement for full and complete reimbursement, the State Treasurer may
consider incorporating into the reimbursement plan the means and methods to
allow the school district to continue its operations during the time the
reimbursement plan is in effect.
(b) The State Treasurer
may, after considering the circumstances giving rise to the failure of the
school district to make payment on its school bonds in a timely manner, impose
on the school district a penalty of not more than five percent of the amount
paid by the state pursuant to the state guaranty for each instance in which a
payment by the state is made.
(4)(a) If the State
Treasurer determines that amounts obtained under this section will not
reimburse the state in full within the time determined by the State Treasurer
or incorporated in the reimbursement plan from the state’s payment of a school
district’s debt service payment, the State Treasurer shall pursue any legal
action, including but not limited to mandamus, against the school district or
school district board to compel the school district to:
(A) Levy and provide
property tax revenues to pay debt service on its school bonds and other
obligations when due; and
(B) Meet its repayment
obligations to the state.
(b) With respect to any
school bonds for which the State Treasurer has made payment under the state guaranty, and in addition to any other rights or remedies
available at law or in equity, the state shall have the same substantive and
procedural rights as would a holder of the school bonds of a school district.
(c) The Attorney General
shall assist the State Treasurer in the discharge of the duties under this
section.
(d) The school district
shall pay the attorney fees, expenses and costs of the State Treasurer and the
Attorney General.
(5)(a) Except as
provided in paragraph (c) of this subsection, any school district whose funds
were intercepted under this section may replace those funds from other school
district moneys or from ad valorem property taxes, subject to the limitations
provided in this subsection.
(b) A school district
may use ad valorem property taxes or other moneys to replace intercepted funds
only if the ad valorem property taxes or other moneys were derived from:
(A) Taxes originally
levied to make the payment, but which were not timely received by the school
district;
(B) Taxes from a special
levy imposed to make up the missed payment or to replace the intercepted
moneys;
(C) Moneys transferred
from any lawfully available funds of the school district or the undistributed
reserves, if any, of the school district; or
(D) Any other source of
moneys on hand and legally available.
(c) Notwithstanding
paragraphs (a) and (b) of this subsection, a school district may not replace
operating funds intercepted by the state with moneys collected and held to make
payments on school bonds if that replacement would divert moneys from the
payment of future debt service on the school bonds and increase the risk that
the state guaranty would be called upon a second time.
LOCAL BONDS
SECTION 41. Sections 42 to 59 and 64 to 70 of this 2007
Act are added to and made a part of ORS chapter 287.
(Definitions)
SECTION 42. As used in this chapter:
(1) “Advance refunding
bond” means a bond all or part of the proceeds of which are to be used to pay
an outstanding bond one year or more after the advance refunding bond is
issued.
(2) “Agreement for
exchange of interest rates” means a contract, or an option or forward
commitment to enter into a contract, for an exchange of interest rates for
related bonds that provides for:
(a) Payments based on
levels or changes in interest rates; or
(b) Provisions to hedge
payment, rate, spread or similar exposure including, but not limited to, an
interest rate floor or cap or an option, put or call.
(3) “Bond”:
(a) Means a contractual
undertaking or instrument of a public body to repay borrowed moneys.
(b) Does not mean a
credit enhancement device.
(4) “Capital
construction” has the meaning given that term in ORS 310.140.
(5) “Capital
improvements” has the meaning given that term in ORS 310.140.
(6) “Credit enhancement
device”:
(a) Means a letter of
credit, line of credit, standby bond purchase agreement, bond insurance policy,
reserve surety bond or other device or facility used to enhance the
creditworthiness, liquidity or marketability of bonds or agreements for
exchange of interest rates.
(b) Does not mean a
bond.
(7) “Current refunding
bond” means a bond the proceeds of which are to be used to pay an outstanding
bond less than one year after the current refunding bond is issued.
(8) “Forward current
refunding” means execution and delivery of a purchase agreement or similar
instrument under which a public body contracts to sell current refunding bonds
for delivery at a future date that is one year or more after execution of the
purchase agreement or similar instrument.
(9) “General obligation
bond” means exempt bonded indebtedness, as defined in ORS 310.140, that is
secured by a commitment to levy ad valorem taxes outside the limits of sections
11 and 11b, Article XI of the Oregon Constitution.
(10) “Lawfully available
funds” means revenues or other moneys of a public body including, but not
limited to, moneys credited to the general fund of the public body, revenues
from an ad valorem tax and revenues derived from other taxes levied by the
public body that are not dedicated, restricted or obligated by law or contract
to an inconsistent expenditure or use.
(11) “Operative document”
means a bond declaration, trust agreement, indenture, security agreement or
other document in which a public body pledges revenue or property as security
for a bond.
(12) “Pledge” means:
(a) To create a lien on
property pursuant to section 50 of this 2007 Act.
(b) A lien created on
property pursuant to section 50 of this 2007 Act.
(13) “Public body”
means:
(a) A county of this
state;
(b) A city of this
state;
(c) A local service
district as defined in ORS 174.116 (2);
(d) A special government
body as defined in ORS 174.117;
(e)
(f) Any other political
subdivision of this state that is authorized by the Legislative Assembly to
issue bonds.
(14) “Refunding bond”
means an advance refunding bond, a current refunding bond or a forward current
refunding bond.
(15) “Related bond”
means a bond for which the public body enters into an agreement for exchange of
interest rates or obtains a credit enhancement device.
(16) “Revenue” means all
fees, tolls, excise taxes, assessments, property taxes and other taxes, rates,
charges, rentals and other income or receipts derived by a public body or to
which a public body is entitled.
(17) “Revenue bond”
means a bond that is not a general obligation bond.
(18) “Termination
payment” means the amount payable under an agreement for exchange of interest
rates by one party to another party as a result of the termination, in whole or
part, of the agreement prior to the expiration of the stated term.
(City General Obligation Bond Authority)
SECTION 43. (1) A city may issue general obligation
bonds to finance capital construction or capital improvements upon approval of
the electors of the city.
(2) Unless the city
charter provides a lesser limitation, a city may not issue or have outstanding
at the time of issuance general obligation bonds in a principal amount that
exceeds three percent of the real market value of the taxable property within
its boundaries, calculated as provided in ORS 308.207.
(3) The limitation
described in subsection (2) of this section does not apply to general
obligation bonds issued to finance the costs of local improvements assessed and
paid for in installments under statutory or charter authority or to finance
capital construction or capital improvements for:
(a) Water supply,
treatment or distribution;
(b) Sanitary or storm
sewage collection or treatment;
(c) Hospitals or
infirmaries;
(d) Gas, power or
lighting; or
(e) Off-street motor
vehicle parking facilities.
(County General Obligation Bond Authority)
SECTION 44. (1) Unless the county charter expressly
provides otherwise, a county may issue general obligation bonds to finance
capital construction or capital improvements upon approval of the electors of
the county.
(2) Unless the county
charter provides a lesser limitation, a county may not issue or have
outstanding at the time of issuance general obligation bonds in a principal
amount that exceeds two percent of the real market value of the taxable
property in the county, calculated as provided in ORS 308.207.
(
SECTION 45. (1) A county may incur bonded indebtedness
within the meaning of section 10, Article XI of the
(a) One percent of the
real market value of all taxable property in the county, calculated as provided
in ORS 308.207; or
(b) A limitation on
bonded indebtedness in the county charter.
(2) The limitation on
bonded indebtedness in subsection (1) of this section does not apply to revenue
bonds issued to finance pension liabilities under ORS 238.692 to 238.698 or any
other law in effect prior to enactment of ORS 238.692 to 238.698.
(Public Body Revenue Bond Authority)
SECTION 46. (1) In addition to any other authority to
issue revenue bonds, a public body may authorize revenue bonds by resolution or
nonemergency ordinance pursuant to this section for a public purpose.
(2) If revenue bonds are
authorized by nonemergency ordinance, a public body may not sell the revenue
bonds pursuant to this section until the period for referral of the ordinance
has expired. If electors of a public body refer a nonemergency ordinance
authorizing issuance of revenue bonds, the public body may not sell the revenue
bonds unless the electors approve issuance of the revenue bonds.
(3) If revenue bonds are
authorized by resolution:
(a) A public body may
not sell the revenue bonds until at least 60 days following publication of the
notice required in subsection (4) of this section.
(b) The resolution must
provide that electors residing within the public body may file a petition with
the public body asking the public body to refer the question of whether to
issue the revenue bonds to a vote. If within 60 days after the publication of
the notice described in subsection (4) of this section, electors file petitions
with the public body containing valid signatures of at least five percent of
the public body’s electors, the public body:
(A) Shall place the
question of issuing the revenue bonds on the ballot at the next lawfully
available election date; and
(B) May not sell the
revenue bonds described in the notice unless a majority of the electors voting
on the question of issuing the revenue bonds approve.
(4) A public body
authorizing revenue bonds by resolution shall publish a notice describing the
purposes for which the revenue bonds will be sold in at least one newspaper of
general circulation within the boundaries of the public body in the same manner
as other public notices of the public body. At a minimum, the notice must
contain:
(a) The date the
resolution was adopted and the number thereof, if any;
(b) The expected source
of revenue for repayment of the revenue bonds;
(c) The estimated
principal amount of the revenue bonds to be sold;
(d) The procedures by
which electors may cause the question of issuing the revenue bonds to be
referred to a vote;
(e) The period within
which electors must file signed petitions to cause referral; and
(f) The fact that the
resolution is available for inspection at the appropriate office of the public
body.
(5) If revenue bonds are
authorized by nonemergency ordinance under subsection (2) of this section, the
revenue bonds may be secured by the revenues or other property of the public
body that is described in the nonemergency ordinance. If revenue bonds are
authorized by resolution under subsection (3) of this section, the revenue
bonds may be secured by the revenues or other property of the public body that
is described in the notice required under subsection (4) of this section.
(6) A public body may
issue refunding bonds under sections 54 to 59 of this 2007 Act to pay revenue
bonds that were authorized by this section. The procedures and limitations of
subsections (1) to (5) of this section do not apply to refunding bonds.
SECTION 47. (1) In addition to any other authority to
issue revenue bonds, but subject to applicable limitations imposed by the
(a) In anticipation of
tax revenues or other moneys;
(b) To provide interim
financing for capital projects to be undertaken by the public body; or
(c) To refund revenue
bonds issued pursuant to this section.
(2) To secure revenue
bonds authorized under this section, a public body may:
(a) Pledge all or part
of the revenues of the public body that may lawfully be used to secure payment
of the revenue bonds.
(b) Obtain credit
enhancement devices for the revenue bonds authorized by this section.
(c) Establish debt
service reserves.
(d) Enter into
covenants, by ordinance, resolution or agreement, for the protection and
security of the owners of revenue bonds authorized by this section. The
covenants constitute enforceable contracts with the owners of the revenue
bonds.
(3) Revenue bonds
authorized by this section that are issued in anticipation of revenues and
revenue bonds issued under subsection (1)(c) of this
section:
(a) Must mature within
13 months after they are issued; and
(b) May not be issued in
a principal amount that exceeds 80 percent of the taxes or other revenues,
except grant moneys, that the public body has budgeted or otherwise reasonably
expects to have available to pay the revenue bonds.
(4) Revenue bonds
authorized by this section that are issued in anticipation of grant moneys or
to provide interim financing for capital projects and revenue bonds issued
under subsection (1)(c) of this section must mature not later than five years
after the revenue bonds are issued.
(5) The debt limitations
imposed by law or the charter of a public body do not apply to revenue bonds or
credit enhancement devices authorized by this section.
(Public Body Bond Administration)
SECTION 48. (1) Notwithstanding a limitation in a local
charter, when a public body is authorized by law to issue bonds, the public
body may:
(a) Combine bonds
authorized by different laws or actions of the governing body into a single
issue and use a single disclosure document if the bonds in the issue will have
the same security, or may use a single disclosure document for bonds authorized
by different laws or actions of the governing body if the bonds have different
security.
(b) Structure, market
and issue bonds in the manner that the public body determines is in the best
interest of the people served by the public body.
(c) Sell bonds at a
competitive sale or a negotiated sale or in any other manner determined by the
public body.
(d) Issue bonds the
interest on which is exempt from federal income taxes or is not exempt from
federal income taxes.
(e) Establish the
maturity dates for bonds to provide for short-term, interim or long-term
borrowing and establish the principal amounts, redemption provisions, optional
or mandatory tender provisions, interest rates or method for determining a
variable or adjustable interest rate, denominations and other terms and
conditions of the bonds.
(f) Determine the form
and content of bond disclosure documents.
(g) Enter into an
agreement with and retain the services of bond counsel and other providers of
bond-related services.
(h) Execute and deliver
indentures, bond purchase agreements, trust agreements, remarketing agreements,
auction agent agreements, broker dealer agreements, tender agent agreements,
escrow agreements and other contracts related to the sale, issuance, security
for or administration of the bonds.
(i) Enter into
agreements with bond trustees and deposit moneys with trustees for the benefit
of bond owners and the providers of credit enhancement devices for bonds.
(j) Enter into covenants
for the benefit of bond owners or the providers of credit enhancement devices
or agreements for exchange of interest rates, including but not limited to
covenants regarding the issuance of additional bonds and rate covenants.
(k) Enter into covenants
for the benefit of owners of bonds that are intended to allow bonds to bear
interest that is excludable from gross income under the federal Internal
Revenue Code or that is otherwise exempt from taxation by the United States.
(L) Take action to
comply with covenants.
(m) Establish bond debt
service reserves.
(n) Fund debt service
reserves out of bond proceeds or from other revenues.
(o) Specify the
individuals who may sign the bonds on behalf of the public body.
(2) When the Oregon
Constitution, a charter, a statute, an ordinance or a resolution authorizes a
public body to spend bond proceeds for a particular purpose, the public body
may also spend bond proceeds to finance costs of issuing, administering and
repaying the bonds, including costs of the services of bond counsel or other
providers of bond-related services, and to pay the costs of a credit
enhancement device or agreement for exchange of interest rates.
(3) When a public body
redeems bonds, the public body shall give notice of redemption in the manner
specified in the documents authorizing the bonds to be redeemed.
SECTION 49. A public body may delegate to an elected or
appointed official or an employee of the public body the authority to take an
action described in section 48 (1) of this 2007 Act.
SECTION 50. (1) As used in this section and section 50a
of this 2007 Act:
(a) “Obligation” means:
(A) A bond;
(B) The commitment of a
public body in connection with a credit enhancement device; or
(C) An agreement for
exchange of interest rates.
(b) “Property” means:
(A) Real or personal
property, tangible or intangible, whether owned when a pledge is made or
acquired subsequently to the time the pledge is made; and
(B) Revenues, contract
rights, receivables or securities.
(2) The Uniform
Commercial Code does not apply to the creation, perfection, priority or
enforcement of a lien of a pledge made by a public body.
(3) When otherwise
authorized by statute, charter, ordinance or resolution to issue bonds, a
public body may pledge as security for payment of obligations all or part of
the property of the public body expressly authorized to be pledged by the
governing body of the public body.
(4) The lien created by
a pledge is valid and binding from the time the pledge is made. Pledged
property is subject immediately to the lien of the pledge without physical
delivery, filing or any other act.
(5) Except as otherwise
expressly provided in an operative document, the lien of the pledge is superior
to and has priority over all other claims and liens.
(6) When property
subject to a pledge is acquired by a public body after the pledge is made:
(a) The property is
subject to the lien upon acquisition by the public body without physical delivery,
filing or any other act.
(b) The lien relates to
the time the pledge was originally made.
(7) A public body may
reserve a right to pledge a pledged property as security for bonds subsequently
issued by the public body. If the public body reserves the right, subject to
the terms of the operative document that created a previous pledge, the lien of
the subsequent pledge may be on a parity or pari passu basis with the lien of
the previous pledge, on a prior and superior basis with the lien of the previous
pledge or on a subordinate basis with the lien of the previous pledge, as
specified in the operative document creating the subsequent pledge. The lien of
the subsequent pledge:
(a) Has the priority
specified in the operative document creating the subsequent pledge; and
(b) Is superior to and
has priority over all other claims and liens except the lien of a pledge with
which the lien of the subsequent pledge is on a parity or subordinate basis, as
specified in the operative document.
(8) A pledgee may commence
an action in a court of competent jurisdiction to foreclose the lien of the
pledge and exercise rights and remedies available to the pledgee under the
operative document.
(9) When pledged
property consists of moneys or property that is in a fund for debt service
reserves or payments, a pledgee may foreclose the lien of the pledge by
applying the moneys or property in the fund to the payment of the bonds subject
to the terms, conditions and limitations in the operative document.
SECTION 50a. (1) A public body may pledge its full
faith and credit and taxing power when the public body issues:
(a) A general obligation
bond; or
(b) An obligation that
is secured by all lawfully available funds of the public body.
(2) When a public body
pledges its full faith and credit and taxing power to pay an obligation, the
pledge constitutes an enforceable promise or contract by the public body:
(a) To pay the
obligation out of lawfully available funds of the public body; and
(b) If lawfully
available funds are insufficient to pay when due the amounts owing on the
obligation, to levy, impose and collect a tax that is within the authority of
the public body to levy, impose and collect in an amount sufficient to pay the
amounts owing under the obligation, including past due amounts and penalties.
(3) If a public body
fails to pay when due an amount owing under an obligation secured by a pledge
of the full faith and credit and taxing power of the public body, the owner of
the obligation, or the trustee appointed to act on behalf of the owner, may
bring an action in the circuit court of the county in which the principal
offices of the public body are located to compel the public body:
(a) To appropriate and
expend sufficient lawfully available funds to pay the amounts owing on the
obligation; or
(b) If lawfully
available funds are insufficient to pay when due the amounts owing on the
obligation, to levy, impose and collect a tax that is within the authority of
the public body to levy, impose and collect in an amount sufficient to pay the
amounts owing under the obligation, including past due amounts and penalties.
(4) An owner of the
obligation, or a trustee appointed to act on behalf of the owner, may initiate
a proceeding to impose remedial sanctions under ORS 33.055 against members of
the governing body of a public body for failure to comply with an order of the
court under this section.
(5) A pledge of the full
faith and credit and taxing power authorized by this section does not, by
itself, create a lien on the revenues or property of the public body.
SECTION 51. (1) The Legislative Assembly finds that:
(a) It is a matter of
statewide concern that certain covenants made by public bodies regarding a
pledge of revenues to secure bonds not be impaired by subsequent initiative or
referendum measures.
(b) The covenants
described in paragraph (a) of this subsection usually are in the form of a
promise to charge and collect rates, fees, tolls, rentals or other charges
sufficient to produce moneys to maintain a specified level of debt service
coverage.
(c) The possibility that
the covenants described in paragraph (a) of this subsection might be rolled
back, frozen or otherwise subjected to subsequently imposed conditions or
restrictions negatively affects the ability of public bodies to market their
bonds, to obtain credit enhancement and to obtain satisfactory ratings on their
bonds.
(2) Therefore, the
Legislative Assembly declares that covenants are material to the security for
bonds and to investors’ expectations regarding timely payment of the bonds.
(3) An elector-approved
initiative or referendum measure that purports to change ordinances or
resolutions affecting rates, fees, tolls, rentals or other charges has no force
or effect if giving force and effect to the change would impair existing
covenants made with existing bond owners.
(4) A public body may
enter into rate covenants that obligate the public body to periodically set
rates and charges:
(a) That generate
pledged revenues at specific levels including, but not limited to, a specific
monetary charge for each unit of commodity or service provided or a schedule of
rates and charges that includes fixed and variable components;
(b) At levels sufficient
to maintain underlying credit ratings assigned to bonds by one or more
nationally recognized credit rating services without regard to improvement in
credit ratings due to the additional security provided for the bonds by a
credit enhancement device;
(c) That generate
pledged revenues each year in amounts at least equal to operations and
maintenance expenses of the system that produces the pledged revenues, plus
debt service on revenue bonds and other borrowings, plus an additional amount
that is reasonably required to obtain favorable terms for the revenue bonds and
other borrowings; or
(d) In accordance with a
formula established in the operative document governing revenue bonds or other
borrowings. The formula may provide for rates and charges to be determined by
reference to factors including, but not limited to:
(A) Historical operating
expenses;
(B) Projected future
operating expenses;
(C) The funding of
depreciation;
(D) The costs of capital
improvements;
(E) The costs of
complying with contractual obligations and covenants;
(F) The costs of complying
with regulatory requirements;
(G) Reports of
independent consultants regarding the level of pledged revenues required to
operate and maintain a utility in accordance with prudent utility practice;
(H) Debt service on the
revenue bonds or other borrowings bonds; and
(I) The moneys needed to
establish or maintain reserves required by law or contract and the moneys
needed to maintain an unencumbered carryforward fund balance or working capital
to meet unanticipated expenses or fluctuations in revenues that may arise.
(5) Without regard to
the date of execution of a rate covenant, a rate covenant authorized by this
section is a contract that binds the public body and is enforceable against the
public body in accordance with the terms of the rate covenant.
(Credit Enhancement)
SECTION 52. (1) A public body may obtain a credit
enhancement device and enter into related agreements.
(2) The public body may
pay the provider of the credit enhancement device from the same sources that
the public body may lawfully use to pay the related bonds or from any other
legally available source.
(3) The public body may
issue a bond to the provider of a credit enhancement device to secure the
obligations of the public body or to pay amounts due to the provider.
(Agreements for Exchange of Interest Rates)
SECTION 53. (1) As used in this section, “counterparty”
means an entity with whom a public body enters into an agreement for exchange
of interest rates.
(2) Upon a finding by a
public body that an agreement for exchange of interest rates benefits the
public body, the public body may enter into the agreement for exchange of
interest rates with a counterparty. An agreement for
exchange of interest rates may be made to manage payment, interest rate, spread
or similar exposure undertaken in connection with related bonds that:
(a)
Exist when the agreement for exchange of interest rates is executed;
(b) Are reasonably
expected to be executed when regularly scheduled payments are due from the
issuer under the agreement; or
(c) Are identified after
the agreement for exchange of interest rates is executed and substituted for
related bonds described in paragraph (a) or (b) of this subsection as a result
of prepayment, refunding, conversion, ratings changes, redemption, defeasance
or other similar event.
(3) Upon entering into
an agreement for exchange of interest rates under this section and continuing
until the agreement is satisfied, terminated or otherwise no longer in effect,
provided a payment default has not occurred, the public body may treat the
amount or rate of interest on the related bond as the amount or rate of
interest payable after giving effect to the agreement for exchange of interest
rates for the purpose of calculating:
(a) Tax levies to pay
regularly scheduled bond debt service; and
(b) Other amounts that
are based on the rate of interest of the bond.
(4) Subject to covenants
applicable to a related bond and the limitations of this section, payments
required under an agreement for exchange of interest rates may:
(a) Be treated as
interest payments on the related bond;
(b) Be made from
revenues or other moneys contributed to or legally available to pay the related
bond; and
(c) Rank in an order of
priority of payment relative to the payment of the related bond as the public
body determines.
(5) In connection with
entering into an agreement for exchange of interest rates, a public body may
obtain a credit enhancement device to secure the agreement for exchange of
interest rates.
(6) An agreement for
exchange of interest rates entered into under this section:
(a) Is not a debt or
other obligation of the issuer for purposes of any limitation upon the
indebtedness of the issuer.
(b) Is subject only to
the limitations of this section and is not subject to other limitations
applicable to the related borrowing.
(7) A termination
payment required to be paid by the public body under an agreement for exchange
of interest rates may not be paid from ad valorem property taxes levied outside
the limitations of section 11 or 11b, Article XI of the
(8) The Oregon Municipal
Debt Advisory Commission shall adopt administrative rules establishing required
terms, conditions, annual or periodic reporting requirements and other
requirements for an agreement for exchange of interest rates entered into by a
public body, if the commission determines those requirements are desirable to
protect the interests of the public body.
(9) A public body may
create reserves to pay amounts due under agreements for exchange of interest
rates and fund the reserves with moneys derived from the issuance and sale of
bonds or from revenues or other moneys described in subsection (4)(b) of this
section.
(Refunding Bonds)
SECTION 54. (1) In addition to any other authority to issue
refunding bonds, a public body may issue current refunding bonds to refund its
outstanding bonds pursuant to this section.
(2) A public body may
secure current refunding bonds with any of the revenues and covenants that the
public body could have used to secure the refunded bonds and with revenues and
covenants authorized by law when the refunding bonds are issued.
(3) A public body may
issue:
(a) General obligation
bonds to refund outstanding general obligation bonds without obtaining approval
of the electors of the public body.
(b) Revenue bonds to
refund revenue bonds that were issued in accordance with section 46 of this
2007 Act without complying with the procedures prescribed in section 46 of this
2007 Act.
(c) General obligation
bonds as current refunding bonds with a maturity date not more than 30 days
after the maturity date of the elector-approved general obligation bonds to be
refunded or the latest maturity date permitted in the elector-approved measure
authorizing the refunded bonds, whichever is later. If the total debt service
on the current refunding general obligation bonds does not exceed the total
debt service on the general obligation bonds to be refunded, the amounts
maturing on a given date may be changed, and the current refunding general
obligation bonds may mature earlier than the bonds to be refunded.
(4) A public body may
not issue current refunding bonds in an amount that, together with amounts on
deposit in sinking funds or other moneys pledged to payment of the principal,
exceeds the amount that the public body estimates is required to:
(a) Pay the refunded
bonds or pay a termination payment with respect to an agreement for exchange of
interest rates related to the refunded bonds;
(b) Fund reserves for
the current refunding bonds;
(c) Pay costs of issuing
the current refunding bonds and obtaining credit enhancement devices; and
(d) Pay other costs
related to the current refunding bonds.
SECTION 55. (1) The Legislative Assembly declares that
the issuance of advance refunding bonds and the authority to effect a forward
current refunding are matters of general statewide concern, and sections 54 to
59 of this 2007 Act preempt all local statutory or charter authority to issue
advance refunding bonds or to effect a forward current refunding.
(2) A public body may
issue advance refunding bonds or enter into forward current refundings in
compliance with:
(a) Sections 54 to 59 of
this 2007 Act; and
(b) Rules adopted by the
State Treasurer.
(3) A public body may
secure advance refunding bonds with any of the revenues and covenants that the
public body could have used to secure the refunded bonds and with revenues and
covenants authorized by law when the refunding bonds are issued.
SECTION 56. (1) The State Treasurer shall review the
plan of a public body to issue advance refunding bonds or to enter into a
forward current refunding to determine whether the plan complies with
applicable rules of the State Treasurer, as provided in this section.
(2) After adoption of an
ordinance or resolution approving a plan to issue advance refunding bonds or to
enter into a forward current refunding, a public body shall submit the
refunding plan to the State Treasurer for review and approval.
(3) After review of a
proposed refunding plan, the State Treasurer shall advise the public body, in
writing, whether the plan is approved. If the State Treasurer does not notify
the public body within 30 business days after receipt of the plan, the plan is
deemed approved. A public body may issue advance refunding bonds or enter into
a forward current refunding in accordance with a refunding plan approved by the
State Treasurer.
(4) The State Treasurer
may adopt rules to regulate forward current refunding and the issuance of
advance refunding bonds.
(5) The State Treasurer
may charge public bodies fees and expenses as provided
in section 5 of this 2007 Act in connection with the activities of this
section.
SECTION 57. (1) As used in this section, “government
obligations” means:
(a) Direct obligations
of the United States of America or obligations the principal of and interest on
which are unconditionally guaranteed by the United States of America and bank
certificates of deposit secured by the obligations;
(b) Bonds, debentures,
notes, certificates of participation or other obligations issued by a federal
agency or other instrumentality of the federal government; or
(c) Other debt
obligations determined by administrative rule of the State Treasurer to be
highly secured and widely accepted in the marketplace as obligations for a
defeasance escrow.
(2) A public body may
not issue advance refunding bonds in a principal amount in excess of the
minimum principal amount that is estimated at the time of sale to be necessary:
(a) To purchase a
principal amount of government obligations that is, together with the interest
earnings thereon, sufficient to pay the installments of principal, interest and
redemption premiums, if any, on the bonds being refunded when due in accordance
with the advance refunding plan; and
(b) To pay all costs in
connection with issuing the advance refunding bonds and obtaining credit
enhancement devices.
(3) If the public body
that issues advance refunding bonds receives an amount of proceeds that exceeds
the actual amount required under subsection (2) of this section, the public
body must use the excess amount of proceeds to pay interest on the advance
refunding bonds.
(4) Before applying
advance refunding bond proceeds to the purposes for which the refunding bonds
have been issued, a public body may invest advance refunding bond proceeds,
together with other moneys set aside for the payment of the bonds to be
refunded, only in government obligations.
(5) The public body
shall make investments pursuant to subsection (4) of this section at times and
in a manner required to provide funds sufficient to pay principal, interest and
redemption premiums, if any, in accordance with the advance refunding plan.
NOTE:
Section 58 was deleted by amendment. Subsequent sections were not renumbered.
SECTION 59. (1) Pursuant to section 67 of this 2007
Act, a public body shall levy taxes to pay the maturing interest and principal
of advance refunding bonds that are general obligation bonds.
(2) Notwithstanding
section 67 of this 2007 Act or any other provision of law, a public body may
not cause a tax to be levied to pay the maturing interest and principal of
general obligation bonds that have been defeased as described in section 64 (2)
of this 2007 Act, unless the amounts held to defease the bonds are
insufficient.
(
SECTION 60. ORS 287.030 is amended to read:
287.030. (1) [There is created] The Oregon Municipal
Debt Advisory Commission is hereby created, consisting of the followings
even members[, selected
as follows]:
(a) The State Treasurer
or [designate] the State Treasurer’s
designee.
(b) Three [local government] public body
finance officers[,]
appointed by the Governor[, one each
among persons]:
(A) One of whom is an
individual recommended by
the Association of Oregon Counties[,].
(B) One of whom is an
individual recommended by
the League of Oregon Cities[,].
(C) One
of whom is an individual recommended by the Oregon School Boards Association. [and]
(c) One
representative of special districts appointed by the Governor.
[(c)] (d) Two public members not
represented in the other categories of appointment, appointed by the Governor.
(2) The term of office
of an appointed member is four years, but appointed members serve at the
pleasure of the Governor. [Before the
expiration of the term of an appointed member, the Governor shall appoint a
successor to assume the duties of the member on July 1, next following.] A
member is eligible for reappointment for [not
to exceed] no more than one additional term.
(3) Before the
expiration of the term of an appointed member, the Governor shall appoint a
successor to assume the duties of the member on July 1 next following. In case of a vacancy for any cause, the
Governor shall make an appointment to become effective immediately for the
unexpired term.
[(3)] (4) The Governor shall designate one of the appointed
members [as chairperson] to serve a one-year
term [of one year] as chairperson,
subject to reappointment.
[(4)] (5) Appointed members of the commission [shall be] are entitled to
compensation and expenses as provided in ORS 292.495.
SECTION 61. ORS 287.032 is amended to read:
287.032. (1) The Oregon
Municipal Debt Advisory Commission shall meet:
(a) At the call of the
chairperson; or
(b) At the request of:
(A) A majority of the
members;
(B) The State Treasurer;
or
(C) The Governor.
(2) A majority of all
members of the advisory commission constitutes a quorum for the transaction of
business.
(3) [All] The
office of the State Treasurer shall provide the commission with
administrative and clerical assistance required by the [advisory] commission [shall
be furnished by the office of the State Treasurer].
SECTION 62. ORS 287.034 is amended to read:
287.034. (1) The
Oregon Municipal Debt Advisory Commission may:
[(1)] (a) Provide assistance and consultation, upon request
of the state or [of local government
units] a public body, to assist them in the planning, preparation,
marketing and sale of new bond issues to reduce the cost of the issuance to the
issuer and to assist in protecting the issuer’s credit.
[(2)] (b) Collect, maintain and provide financial, economic
and social data on [local government
units] public bodies pertinent to their ability to [assume and service bonded obligations]
issue and pay bonds.
[(3)] (c) Collect, maintain and provide information on bonds
sold and outstanding and serve as a clearinghouse for all local bond issues.
[(4)] (d) Maintain contact with municipal bond underwriters,
credit rating agencies, investors and others to improve the market for [local government] public body
bond issues.
[(5) Prepare, advertise and distribute, upon request of issuers,
preliminary official statements required by ORS 287.018 and notices of bond
sales required by ORS 287.022.]
[(6)] (e) Undertake or commission
studies on methods to reduce the costs of state and local bond issues.
[(7)] (f) Recommend changes in
state law and local practices to improve the sale and servicing of local bonds.
[(8)] (g) Perform any other
function required or authorized by law.
[(9)] (h) Pursuant to ORS chapter 183, adopt rules
necessary to carry out its duties.
(2) The commission
shall publish:
(a) A periodic
newsletter describing proposed bond issues, bond sales, refundings, credit
rating changes and other information relating to municipal bonds that is
pertinent to issuers, underwriters, investors and the public.
(b) An annual report
describing and evaluating the operations of the commission during the preceding
year.
(3) The commission may
charge reasonable fees for providing services under subsection (1) of this
section.
(4) The commission shall
transfer the amounts received under this section to the State Treasurer for
deposit in the Miscellaneous Receipts Account in the General Fund for the State
Treasurer described in ORS 286.025. The moneys deposited in the account
pursuant to this section are continuously appropriated to the State Treasurer
for payment of expenses of the State Treasurer in providing services to the
commission pursuant to ORS 287.032.
SECTION 63. ORS 287.040 is amended to read:
287.040. (1) The Oregon
Municipal Debt Advisory Commission [shall]
may, by rule, require a public body to provide the commission with
prior notice of proposed issuance of new bonds [by a public body to be made to the advisory commission in such form and
at such times as the advisory commission specifies] in a form and at
times specified by the commission.
[(2) As used in this section:]
[(a) “Bonds” means general obligation, revenue
or tax increment bonds, certificates of participation, special assessment
bonds, limited tax obligations or notes of a public body.]
[(b) “Public body” means the governing body or authorized board,
commission or person representing any political subdivision or municipal, quasi-municipal
or public corporation in this state authorized by law to issue bonds.]
(2) To assist the
commission in carrying out its duties, a public body shall verify, at the
request of the commission, the information maintained by the commission or the
State Treasurer on the public body’s outstanding bonds.
(Debt Limit Calculation)
SECTION 64. (1) When calculating compliance with a
constitutional or statutory debt limit for a public body:
(a) The amount of
interest to be paid on bonds, whether paid currently or deferred,
is not taken into account.
(b) For a zero coupon
bond or other original discount bond on which periodic interest payments are
not made, only the accreted value of the bond on the date the bond is issued is
taken into account.
(c) If a bond is issued
to a provider of a credit enhancement device for a bond that is subject to a
debt limit, the bond issued to the provider must be taken into account only to
the extent that the amount of the bond issued to the provider exceeds the amount
of the bond secured by the credit enhancement device.
(d) A public body may
deduct from the amount of outstanding indebtedness:
(A) The amount of money
and investments that the public body or a trustee of the public body or a
trustee or agent of the public body holds to pay bonds that have not been
defeased.
(B) The principal amount
of bonds that have been defeased.
(2) For purposes of this
section, a bond is defeased if:
(a) The public body has
set aside in an irrevocable escrow government obligations, as defined in
section 57 of this 2007 Act, the receipts from which have been calculated by a
certified public accountant or other experienced professional to be sufficient,
without reinvestment, to pay the principal, interest and premium, if any, due on
the bond at maturity or on prior redemption; or
(b) The public body has
complied with the provisions in the documents authorizing the bond that govern
payment or defeasance of the bond.
(Taxation)
SECTION 65. Interest on bonds of a public body is exempt
from personal income tax under ORS chapter 316.
(Remedies for Misspent Proceeds)
SECTION 66. (1) If a court of competent jurisdiction
determines that the proceeds of an issue of general obligation bonds have been
used by a public body for expenditures that are not capital construction or
capital improvements, the court may order the public body to:
(a) Replace the misspent
proceeds with interest, on a reasonable schedule determined by the court, from
moneys other than the tax revenues that the public body levies to pay the debt
service; and
(b) Use the replaced
moneys for capital construction or capital improvement expenditures or to pay
the debt service.
(2) If the public body
fails to comply with an order to replace the misspent proceeds or acknowledges
that the public body is unable to replace the misspent proceeds, the court may
determine that a portion of the future levies to pay the debt service is
subject to the limits of sections 11 and 11b, Article XI of the Oregon
Constitution, by calculating the amount of the tax revenues that are necessary
to pay the principal and interest on the bonds that is allocable to the
misspent proceeds.
(3) An action may not be
filed or maintained against a public body because of an alleged expenditure of
the bond proceeds of general obligation bonds for purposes other than capital
construction or capital improvements, if the misspent moneys are less than
$5,000.
(Tax Levy Authority)
SECTION 67. (1) In addition to other taxes imposed, a
public body shall levy annually an ad valorem property tax on the taxable
property within the boundaries of the public body in an amount that is
sufficient, when added to other amounts available, to pay the principal of and
interest on outstanding general obligation bonds issued by the public body.
(2) A public body may:
(a) Use the revenues
collected under this section and earnings on the revenues only to pay the
principal of and interest on general obligation bonds.
(b) Not use or divert
taxes levied under subsection (1) of this section for another purpose while
principal or interest remains unpaid on the bonds.
(c) If a surplus amount
remains after the principal of and interest on an issue of general obligation
bonds have been paid and the public body does not have other expenses related
to the bonds, transfer the surplus moneys to a fund designated by the governing
body of the public body.
(Authority Conveyed to Public Bodies)
SECTION 68. The powers conveyed to public bodies by
sections 42 to 59 and 64 to 70 of this 2007 Act are in addition to any other
powers possessed by public bodies and do not limit those other powers.
(Public Records)
SECTION 69. The records of registered bond ownership,
whether maintained by a public body or otherwise, are not public records within
the meaning of ORS 192.410 (4).
(Application to Refunding Bonds)
SECTION 70. (1) ORS 288.605 to 288.695 (2005 or earlier
edition) do not apply to or affect advance refunding bonds issued prior to
October 4, 1977.
(2) Sections 54 to 59 of
this 2007 Act do not apply to or affect refunding bonds issued prior to the
effective date of this 2007 Act.
MISCELLANEOUS
SECTION 71. ORS 190.080 is amended to read:
190.080. (1) An intergovernmental entity created by an intergovernmental
agreement under ORS 190.010 may, according to the terms of the agreement:
(a) Issue revenue bonds
under ORS [288.805 to 288.945] chapter
287 or enter into financing agreements authorized under ORS 271.390 to
accomplish the public purposes of the parties to the agreement, if after a
public hearing the governing body of each of the units of local government that
are parties to the agreement approves, by resolution or order, the issuance of
the revenue bonds or entering into the financing agreement;
(b) Enter into
agreements with vendors, trustees or escrow agents for the installment purchase
or lease, with option to purchase, of real or personal property if the period
of time allowed for payment under an agreement does not exceed 20 years; and
(c) Adopt all rules
necessary to carry out its powers and duties under the intergovernmental
agreement.
(2) Except as provided
in ORS 190.083, an intergovernmental entity may not levy taxes or issue general
obligation bonds.
(3) The debts,
liabilities and obligations of an intergovernmental entity shall be, jointly
and severally, the debts, liabilities and obligations of the parties to the
intergovernmental agreement that created the entity, unless the agreement
specifically provides otherwise.
(4) A party to an
intergovernmental agreement creating an intergovernmental entity may assume
responsibility for specific debts, liabilities or obligations of the
intergovernmental entity.
(5) Any moneys collected
by or credited to an intergovernmental entity shall not accrue to the benefit
of private persons. Upon dissolution of the entity, title to all assets of the
intergovernmental entity shall vest in the parties to the intergovernmental
agreement. The agreement creating the entity shall provide a procedure for:
(a) The disposition,
division and distribution of any assets acquired by the intergovernmental
entity; and
(b) The assumption of
any outstanding indebtedness or other liabilities of the entity by the parties
to the intergovernmental agreement that created the entity.
(6) An intergovernmental
entity created by intergovernmental agreement under ORS 190.010 may be
terminated at any time by unanimous vote of all the parties to the
intergovernmental agreement or as provided by the terms of the agreement.
SECTION 72. ORS 190.083 is amended to read:
190.083. (1) Before a
county enters into an intergovernmental agreement creating an intergovernmental
entity to operate, maintain, repair and modernize transportation facilities,
the county shall obtain approval of the terms and conditions of the agreement
from the governing bodies of a majority of the cities within the county.
(2) Subject to the
provisions of this section, an intergovernmental entity created to operate,
maintain, repair and modernize transportation facilities may issue general obligation
bonds and assess, levy and collect taxes in support of the purposes of the
entity.
(3)(a) To carry out the
purposes of an intergovernmental agreement under this section, and when
authorized at an election described in paragraph (b) of this subsection, an
intergovernmental entity created to operate, maintain, repair and modernize
transportation facilities may borrow moneys and sell and dispose of general
obligation bonds. Approval requires an affirmative vote of a majority of the
electors within the intergovernmental entity voting in the election.
(b) If the bonds are not
subject to the limitations under section 11 or 11b, Article XI of the Oregon
Constitution:
(A) The proposition
submitted to the electors shall provide that the intergovernmental entity shall
assess, levy and collect taxes each year on the assessed value of all taxable
property within the intergovernmental entity for the purposes of paying the
principal and interest on the general obligation bonds;
(B) The election must
comply with the voter participation requirements of section 11 (8), Article XI
of the Oregon Constitution; and
(C) Outstanding bonds
may never exceed in the aggregate two percent of the real market value of all
taxable property within the entity.
(4) The governing body
of an intergovernmental entity created to operate, maintain, repair and
modernize transportation facilities shall issue the bonds from time to time as
authorized by the electors of the entity. The governing body shall issue the
bonds according to the applicable provisions of ORS [chapters 287 and 288] chapter 287.
(5) The electors of an
intergovernmental entity created to operate, maintain, repair and modernize
transportation facilities may establish a permanent rate limit for ad valorem
property taxes for the entity pursuant to section 11 (3)(c), Article XI of the
Oregon Constitution.
(6) An intergovernmental
entity created to operate, maintain, repair and modernize transportation
facilities may exercise the powers necessary to carry out the purposes of the
intergovernmental agreement, including but not limited to the authority to
enter into agreements and to expend tax proceeds and other revenues the entity
receives.
(7) An intergovernmental
entity created to operate, maintain, repair and modernize transportation
facilities is not a district as defined in ORS 198.010 and is not subject to
the provisions of ORS chapter 451.
(8) An intergovernmental
entity described in this section is subject to ORS 294.305 to 294.565 for each
fiscal year or budget period in which the entity proposes to impose or imposes
ad valorem property taxes.
SECTION 73. ORS 190.265 is amended to read:
190.265. (1) Pursuant to
ORS 190.010, 190.020 and 190.085, counties may establish, by agreement ratified
by the governing body of each county as provided in ORS 190.085, an
intergovernmental corrections entity for the purposes of:
(a) Making application
under ORS 423.525 to provide local correctional facilities including, but not
limited to, facilities funded under ORS 423.525, including land, structures,
equipment, supplies and personnel necessary to acquire, develop, maintain and
operate the local correctional facilities; and
(b) Administering local
community corrections programs and services.
(2) An intergovernmental
corrections entity consists of the entire combined territories of the counties
establishing the entity. Notwithstanding any provision in ORS chapter 190 and
subject to the provisions of this section, an intergovernmental corrections
entity may issue general obligation bonds and assess, levy and collect taxes in
support of the purposes of the entity. An intergovernmental corrections entity
is not a district for purposes of ORS chapter 198 and is not subject to ORS
chapter 451.
(3) To carry out the
purposes for which the entity was established and when authorized at an
election properly called for that purpose, an intergovernmental corrections
entity may borrow money and sell and dispose of general obligation bonds.
Approval or denial of the proposition submitted to the electors of the
intergovernmental corrections entity shall be by a majority of the electors
voting in the election. The proposition submitted to the electors shall make
provision for the assessment, levy and collection each year of taxes on the
assessed value of all taxable property within the entity to be applied for the
purposes of paying the principal and interest on the general obligation bonds.
Outstanding bonds may never exceed in the aggregate two percent of the real
market value of all taxable property within the entity.
(4) The bonds shall be
issued from time to time by the governing body of the entity on behalf of the
entity as authorized by the electors of the entity. The bonds shall be issued
in accordance with the applicable provisions of ORS [chapters 287 and 288] chapter 287.
(5) An intergovernmental
corrections entity may impose operating taxes by establishing a permanent rate
limit under section 11 (3)(c), Article XI of the
Oregon Constitution, and the laws adopted thereunder. An intergovernmental
corrections entity may impose other ad valorem property taxes in the manner
provided by law.
(6) Local correctional
facilities provided by or furnished to a county under this section shall be
considered to be jail accommodations of the county for purposes of ORS 135.215,
137.140 and 137.330.
(7) An intergovernmental
corrections entity may exercise any of the powers granted by this section, any
of the powers of an intergovernmental entity created under ORS 190.010, 190.020
and 190.085 and any powers necessary to effectuate the purposes for which the
entity is formed. These powers include, but are not limited to, the authority
to contract or make agreements with third parties, governmental and private,
and the authority to expend, consistent with the purposes for which the entity
is formed, any tax proceeds, general obligation bond proceeds and other
revenues received by the entity. This section and the powers granted by it
shall be construed liberally to effectuate its purposes.
SECTION 74. ORS 223.235 is amended to read:
223.235. (1) When in any
local government a bond lien docket is made up, as provided in ORS 223.230, as
to the final assessments for any local improvement, the local government shall
by ordinance or resolution of the governing body authorize the issue of its
bonds pursuant to the applicable provisions of ORS chapter [288] 287 and in accordance with
this section.
(2) The bonds authorized
to be issued under this section must be issued in an amount that does not
exceed the unpaid balance of all final assessments for the related local
improvements, plus the amounts necessary to fund any debt service reserve and
to pay any other financing costs associated with the bonds.
(3)(a) If the question
of the issuance of the specific bonds has been approved by the electors of the
local government and the bonds are issued as general obligation bonds, the
local government shall each year assess, levy and collect a tax on all taxable
property within its boundaries. The amount of the tax must be sufficient to pay
all principal of and interest on the bonds that are due and payable in that
year and to replenish any debt service reserves required for the bonds. In
computing the amount of taxes to impose, the local government shall:
(A) Deduct from the
total amount otherwise required the amount of final installment payments that
are pledged to the payment of the bonds and that are due and payable in that
year; and
(B) Add to this net
amount the amount of reasonably anticipated delinquencies in the payments of
the installments or the taxes.
(b) The taxes must be
levied in each year and returned to the county officer whose duty it is to
extend the tax roll within the time and in the manner provided in ORS 310.060.
(c) The taxes become
payable at the same time and are collected by the same officer who collects
county taxes and must be turned over to the local government according to law.
(d) The county officer
whose duty it is to extend the county levy shall extend the levy of the local
government in the same manner as city taxes are extended. Property may be sold
for nonpayment of the taxes levied by a local government in like manner and
with like effect as in the case of county and state taxes.
[(4) If the question of the issuance of the specific bonds has not been
approved by the electors of the local government, the local government may
issue the bonds as limited tax bonds, as defined in ORS 288.150.]
[(5)(a)] (4)(a) All bonds issued
pursuant to this section, including general obligation bonds, are secured by
and payable from the installments of final assessments with respect to which
the bonds were issued.
(b) In the ordinance or
resolution authorizing the issuance of the bonds, the governing body of the
issuing local government may:
(A) Provide that
installments of final assessments levied with respect to two or more local
improvements shall secure a single issue of bonds.
(B) Reserve the right to
pledge, as security for any bonds thereafter issued pursuant to this section,
any installments of final assessments previously pledged as security for other
bonds issued pursuant to this section.
(c) All bonds must be
secured by a lien on the installments of final assessments with respect to
which they were issued. The lien is valid, binding and fully perfected from the
date of issuance of the bonds. The installments of final assessments are
immediately subject to the lien without the physical delivery thereof, the
filing of any notice or any further act. The lien is valid, binding and fully
perfected against all persons having claims of any kind against the local
government or the property assessed whether in tort, contract or otherwise, and
irrespective of whether the persons have notice of the lien.
[(6)] (5) As additional security for any bonds issued under
this section, including general obligation bonds, the governing body of the
issuing local government may pledge or mortgage, or grant security interests
in, its revenues, assets and properties, and otherwise secure and enter into [covenant] covenants with respect
to the bonds[,] as provided in ORS [288.155] chapter 287.
[(7)(a)] (6)(a) A local government
may, from time to time after the undertaking of a local improvement has been
authorized, borrow money and issue and sell notes for the purpose of providing
interim financing for the actual costs of the local improvement.
(b) Notes authorized
under this subsection may be issued in a single series for the purpose of
providing interim financing for two or more local improvements.
(c) Notes authorized
under this subsection may not mature later than one year after the date upon
which the issuing local government expects to issue bonds for the purpose of
providing permanent financing with respect to installment payments of the final
assessments for the local improvements.
(d) Any notes authorized
under this subsection may be refunded from time to time by the issuance of
additional notes or out of the proceeds of bonds issued pursuant to this
section. The notes may be made payable from the proceeds of any bonds to be
issued under this section to provide permanent financing or from any other
sources from which the bonds are payable.
(e) The governing body
of the issuing local government may pledge to the payment of the notes any
revenues that may be pledged to the payment of bonds authorized to be issued
under this section with respect to the local improvements for which the notes
provide interim financing.
SECTION 75. ORS 223.262 is amended to read:
223.262. (1) As used in ORS 223.205 and 223.210 to 223.295:
(a) “Assessment contract”
means the obligation to pay final assessments in installments that arise when a
property owner submits an application to pay assessments in installments under
ORS 223.210 or a similar provision of a local charter.
(b) “Assessment contract
rights” includes the right to receive installment payments of final
assessments, with interest, made under an assessment contract, and the right to
enforce the lien of the final assessment.
(2) Any local government
that receives or expects to receive assessment contracts may:
(a) Sell or assign to
third parties all or any portion of its assessment contract rights.
(b) Create corporations
or other business entities to factor assessment contract rights.
(c) Create grantor
trusts and transfer to the trusts assessment contract rights.
(d) Contract to service
assessment contracts and assessment liens for the owners of assessment contract
rights, or contract with third parties to service assessment contracts and
assessment liens for the owners of assessment contract rights.
(e) Serve as a trustee
for the owners of assessment contract rights.
(f) Enter into contracts
necessary to carry out the provisions of this section.
(3) Any trust created
under this section may fractionalize and sell assessment contract rights.
(4) Assessment contract
rights, any interests therein and any interests in trusts secured primarily by
assessment contract rights shall be exempt from registration under ORS 59.055.
(5) If assessment
contract rights that secure outstanding obligations of a local government are
sold or assigned under this section, an amount shall be placed irrevocably in
escrow that is calculated to be sufficient to pay all principal and interest on
the outstanding obligations as they mature or are irrevocably called for prior
redemption[, in accordance with ORS
288.677]. Any sale proceeds not required to fund the escrow may be placed
in the general fund of the local government. If only a portion of the contract
rights securing outstanding obligations is sold, then the amount of outstanding
obligations that must be defeased pursuant to this subsection shall be that
proportion of the principal amount of the outstanding obligations that the
principal amount of the contract rights that are sold represents to the total
principal amount of the contract rights that secure the outstanding
obligations.
NOTE:
Section 76 was deleted by amendment. Subsequent sections were not renumbered.
SECTION 77. ORS 238.692 is amended to read:
238.692. As used in ORS 238.692
to 238.698:
[(1) “Governmental unit” has the meaning given that term in ORS 288.150,
and includes an agency created by two or more political subdivisions pursuant
to ORS 190.003 to 190.130 or 190.265.]
[(2)] (1) “Pension liability” means:
(a) Monetary obligations
of a participating public employer for which the employer is or will be
required to transmit amounts to the Public Employees Retirement Board under the
provisions of ORS 238.225, including any obligations arising out of an
integration contract under ORS 238.680, or any other liability of a [governmental unit] public body
that is attributable to an obligation to pay pensions or other retirement
benefits to officers or employees of the [governmental
unit] public body, whether active or retired; and
(b) Monetary obligations
of a public employer arising out of an integration
contract under ORS 238.680 for which the employer is required to transmit
amounts to the Public Employees Retirement Board.
(2) “Public body” has
the meaning given that term in section 42 of this 2007 Act.
(3) “State agency” means
any officer, board, commission, department, division or institution in the
administrative branch of state government.
SECTION 78. ORS 238.694 is amended to read:
238.694. (1) The
Legislative Assembly finds that authorizing issuance of [limited tax bonds or] revenue bonds to finance pension liabilities
may reduce the cost of public pensions to taxpayers and that the reduction of
those costs to taxpayers is a matter of statewide concern.
(2) Notwithstanding the
limitation on indebtedness in [ORS
287.053] section 45 of this 2007 Act or any other limitation on
indebtedness or borrowing under state or local law, for the purpose of
obtaining funds to pay the pension liability of a [governmental unit] public body, the governing body of a [governmental unit] public body
may authorize and cause the issuance of [limited
tax bonds as defined in ORS 288.150,] revenue bonds [authorized by charter or pursuant to ORS 288.805 to 288.945, or any
combination of those bonds] under ORS chapter 287.
(3) The governing body
of a [governmental unit] public body
may pledge the full faith and credit and taxing power of the [governmental unit] public body to
the payment of the principal and interest on bonds issued under ORS 238.692 to
238.698, and any premium on those bonds.
[(4) Except as otherwise provided in this section, limited tax bonds
authorized under this section must be issued in the manner prescribed by the
applicable provisions of ORS chapters 287 and 288 for the issuance of limited
tax bonds.]
[(5)] (4) Unless the charter of a county provides a lower
limit, a county may issue [limited tax]
revenue bonds to finance pension liabilities in an amount that does not
exceed five percent of the real market value of the taxable property within the
boundaries of the county.
[(6)] (5) Revenue bonds authorized under this section need
not comply with the procedure specified in [ORS
288.815] section 46 of this 2007 Act.
[(7)] (6) A [governmental
unit] public body that issues [limited
tax bonds or] revenue bonds under this section may also issue [limited tax bonds or] revenue bonds for
the purpose of refunding the bonds.
[(8)] (7) A [governmental
unit] public body may enter into indentures or other agreements with
trustees or escrow agents for the issuance, administration or payment of bonds
authorized under this section.
SECTION 79. ORS 238.695 is amended to read:
238.695. (1) [Governmental units] Public bodies
may enter into intergovernmental agreements for the collective issuance,
administration or payment of bonds authorized under ORS 238.694. An agreement
for collective issuance, administration or payment of bonds under this
subsection may provide for the contribution and pooling of the assets of the [governmental units] public bodies
as security for the bonds, and may make provisions for such other matters as
the [governmental units] public
bodies determine convenient. Notwithstanding ORS 190.080, any
intergovernmental entity created by [governmental
units] public bodies under this section shall have the power to
issue bonds as described in ORS 238.694. The bonds may be issued and sold as
parity bonds, issued and sold individually or issued and sold in such
combinations or forms as determined to be appropriate by the [governmental units] public bodies.
(2) Proceeds of bonds
sold under an intergovernmental agreement entered into under this section, and
any other funds or assets of a [governmental
unit] public body, together with interest or earnings on the
proceeds, funds and assets, may be consolidated into one or more funds or
accounts and may be pledged to the holders of the bonds.
(3) [Governmental units] Public bodies
may enter into indentures or other agreements with trustees or escrow agents
for the issuance, administration or payment of bonds pursuant to an
intergovernmental agreement entered into under this section.
(4) The State Treasurer
may cooperate with, assist and provide recommendations to [governmental units] public bodies, and any intergovernmental
entity created by [governmental units]
public bodies under this section, relating to all matters involved in
the issuance, administration and payment of bonds. Any expenses incurred by the
State Treasurer in providing assistance to [governmental
units] public bodies under this section may be paid as an
administrative expense of the [governmental
unit] public body from the proceeds of the bonds issued with the
assistance of the State Treasurer.
SECTION 80. ORS 238.696 is amended to read:
238.696. (1) A [governmental unit] public body,
or a group of [governmental units]
public bodies that enter into an intergovernmental agreement under ORS
238.695, may establish a debt service trust fund for the purpose of paying the
principal and interest on bonds issued under ORS 238.692 to 238.698. The
trustee of the debt service trust fund shall hold the moneys paid into the
trust fund solely for the purpose of paying the principal and interest on bonds
issued under ORS 238.692 to 238.698 and for paying the administrative costs of
the trust fund.
(2) Moneys held in a
debt service trust fund are subject to the limitations on investment imposed by
ORS 294.033 and 294.035.
(3) A [governmental unit] public body,
or a group of [governmental units]
public bodies that enter into an intergovernmental agreement under ORS
238.695, that has established a debt service trust fund under this section may
not divert or pledge any moneys paid into the trust fund for any purpose other
than the purpose specified in subsection (1) of this section until the total
amount of principal and interest on bonds issued by the [governmental unit] public body or under the
intergovernmental agreement, and any premium on those bonds, is paid.
SECTION 81. ORS 238.698 is amended to read:
238.698. (1) A [governmental unit] public body,
or a group of [governmental units] public
bodies that enter into an intergovernmental agreement under ORS 238.695,
that receives funds from any state agency may enter into a funds diversion
agreement with the state agency for the purpose of paying the principal and
interest on bonds issued under ORS 238.692 to 238.698, and any premium on those
bonds. A diversion agreement entered into under this section must provide that:
(a) Moneys payable to
the [governmental unit or governmental
units] public body or group of public bodies by the state agency
from appropriations from the General Fund or any other source of moneys will be
paid directly to a debt service trust fund established under ORS 238.696 in
amounts equal to the debt service owed by the [governmental unit or governmental units] public body or group of
public bodies;
(b) The state agency
must pay the amounts required under the funds diversion agreement to the debt
service trust fund established under ORS 238.696 pursuant to the schedule
specified in the agreement before paying any other amounts to the [governmental unit or governmental units]
public body or group of public bodies;
(c) The agreement is
irrevocable; and
(d) The agreement will
remain in effect until all the bonds issued by the [governmental unit] public body or under the
intergovernmental agreement are mature or redeemed.
(2) If for any reason a
state agency that has entered into a funds diversion agreement is not able to
pay moneys to a debt service trust fund as contemplated by the agreement, the
state agency shall give notice to the [governmental
unit or governmental units] public body or group of public bodies
within 30 days after the state agency is aware that the moneys will not be
paid.
(3) Nothing in this
section, or in any funds diversion agreement entered into by a state agency
under this section, may in any manner obligate the state or any state agency:
(a) To pay any amount [to a governmental unit that the governmental
unit] that a public body is not otherwise entitled to receive under
law; or
(b) To pay any principal
or interest on bonds issued under ORS 238.692 to 238.698.
SECTION 82. ORS 261.371 is amended to read:
261.371. [(1)] Notwithstanding any other provision
of law, revenue bonds issued and sold under this chapter may be [sold by any district at public or private
sale upon the terms and conditions, at the rates of interest, for the prices
and at the discount or premium that the board of directors considers most
advantageous to the district, with or without public bidding] issued and
sold as prescribed in ORS chapter 287.
[(2) All legally authorized and issued general obligation bonds shall be
sold by public bidding, except that general obligation bonds may be sold to a
state or to the United States or any agency, corporation or instrumentality of
a state or of the United States at private sale in such blocks as the board of
directors may determine.]
[(3) All revenue or general obligation bonds to be sold by public
bidding shall be advertised and sold in the manner prescribed in ORS 287.014 to
287.022.]
SECTION 83. ORS 266.512 is amended to read:
266.512. (1) Whenever
authorized by the electors, the district board may issue general obligation
bonds of the district, not exceeding [in
value the] the principal amount stated in the notice of election and
for the purpose therein named[, bearing interest at a rate determined by the board, payable
semiannually, redeemable at such time or times as the board may, at the time of
providing for the issuance thereof, determine, but due and payable not to
exceed 30 years from date].
(2) The aggregate amount
of general obligation bonds issued and outstanding at any one time shall in no
case exceed two and one-half percent of the real market value of all taxable
property of the district, computed in accordance with ORS 308.207.
(3) General obligation
or revenue bonds must recite that they are issued under this chapter. All bonds
shall be signed by the president of the district board[,] and attested by the secretary
[and registered by the county treasurer].
The interest coupons thereto annexed shall be signed by the president and
secretary, by their original or engraved facsimile signatures.
(4) All general
obligation and revenue bonds issued, including refunding bonds, shall be [advertised and sold in the manner prescribed
by ORS 287.014 to 287.022 for the sale of bonds of cities of this state]
issued as prescribed in ORS chapter 287.
SECTION 84. ORS 267.345 is amended to read:
267.345. All general
obligation and revenue bonds, including refunding bonds, issued under ORS
267.330 to 267.345 shall be [advertised
and sold in the manner prescribed by ORS 287.014 to 287.022 for the sale of
bonds of cities of this state] issued as prescribed in ORS chapter 287.
SECTION 85. ORS 267.400 is amended to read:
267.400. (1) A district
may borrow moneys by issuing notes, warrants or other obligations:
(a) In anticipation of
taxes or other revenues, including but not limited to grants awarded by the
state or federal government; or
(b) To refund
obligations authorized under this section.
(2) To secure
obligations authorized under this section a district may:
(a) Pledge as primary
security for the obligations the taxes and other revenues in anticipation of
which the obligations are issued, including but not limited to grants from the
state or federal government;
(b) Pledge as secondary
security for the obligations the taxes and other revenues of the district other
than those in anticipation of which the obligations are issued;
(c) Segregate any
pledged funds in separate accounts which may be held by the district or third
parties;
(d) Establish any
reserves deemed necessary by the district for the payment of the obligations;
and
(e) Adopt resolutions
containing covenants and provisions for protection and security of the holders
of obligations, which shall constitute enforceable contracts with such holders.
(3) Each issue of
obligations authorized by this section:
(a) If issued in
anticipation of taxes, shall not be issued prior to, and shall mature not later
than the end of, the fiscal year in which the taxes are expected to be
received;
(b) If issued in
anticipation of other revenues, including grants for operating purposes from
the state or federal government, shall not be issued more than one year prior
to the time at which the district expects to receive the last installment of
the revenues or grants in anticipation of which the obligations are issued, and
shall mature not more than one year after the date of issue;
(c) If issued in
anticipation of capital improvement grants from the state or federal
government, shall not be issued more than 30 months prior to the time at which
the district expects to receive the last installment of the capital improvement
grant in anticipation of which the obligations are issued, and shall mature no
later than 30 months after the date of issue or six months after the time at
which the district expects to receive the last installment of the capital
improvement grant in anticipation of which the obligations are issued,
whichever is earlier;
(d) If issued in
anticipation of taxes or revenues other than grants from the state or federal
government, shall not be issued in an amount greater than 80 percent of the
amount of taxes or such other revenues budgeted to be received by the district
and in anticipation of which such obligations are issued; and
(e) If issued in
anticipation of grants from the state or federal government, shall not be
issued in an amount greater than 80 percent of the amount of such grants.
(4) Except as this
section otherwise specifically provides, obligations authorized by this section
may be in any form and contain any terms, including provisions for the varying
of interest rates in accordance with any index, bankers’ loan rate or other
standard. A district may issue and sell as part of a single offering
obligations in anticipation of two or more grants from the state or federal
government, in which event the obligations constituting a part of the offering
shall be issued as separate series with one series corresponding to each grant
in anticipation of which the obligations are issued. A district may only pledge
as primary security for a series of obligations constituting part of a single
offering the grant in anticipation of which such series is issued. For purposes
of subsection (3) of this section, each series of obligations constituting part
of a single offering shall be a separate issue of obligations.
(5) When the taxes or
other revenues, including grants from the state or federal government, in
anticipation of which the obligations authorized by this section are issued are
not received by the district at such time or in such amounts as will enable the
district to pay the obligations at maturity, the district shall, to the extent
available, first apply to the payment of the obligations the taxes or other
revenues in anticipation of which such obligations were issued, and the
district may pay the balance owing under such obligations out of any other
taxes or revenues available for such purpose.
(6) The district may
contract with third parties to serve as issuing, paying and authenticating
agents for any obligations authorized by this section.
(7) Obligations
authorized by this section [may be sold
at public or private sale upon such terms as the district finds advantageous,
with such disclosure as the district deems appropriate. ORS 287.014 to 287.022
shall not apply to obligations authorized by this section. ORS 287.040 shall
apply to obligations authorized under this section] shall be issued as
prescribed in ORS chapter 287.
(8) Any pledge made
pursuant to subsection (2) of this section shall be valid and binding from and
after the date of issue of the obligations secured by such pledge and the taxes
or other revenues pledged shall be immediately subject to the lien of such
pledge without the physical delivery thereof, the filing of any notice or any
further act. The lien of any pledge made pursuant to subsection (2) of this
section shall be valid and binding against all persons having claims of any
kind against the district whether in tort, contract or otherwise, irrespective
of whether such persons have notice thereof.
(9) The district shall
deposit, when received, a portion of the taxes or other revenues in
anticipation of which the obligations authorized by this section are issued in
a separate account. Deposits to the account shall be made according to a
schedule which requires that not less than 100 percent of such taxes or other
revenues received by the district after the estimated date of the district’s
maximum cumulative cash flow deficit be placed in the account until sufficient
amounts are in the account to pay principal and interest due on the obligations
at maturity. The schedule shall be established by the district in its
proceedings to issue the obligations. Moneys in the account shall be used only
to pay principal and interest on the obligations, and may be pledged by the
district for such purpose.
SECTION 86.
ORS 267.630 is amended to read:
267.630. (1) For the
purpose of performing any service that the district has power to perform, the
district, when authorized at any properly called election held for such
purpose, shall have the power to borrow money by the issuance and sale of general
obligation bonds. Such bonds shall never exceed in the aggregate 10 percent of
the real market value of all taxable property within the district computed in
accordance with ORS 308.207. The bonds shall be so conditioned that the
district shall promise and agree therein to pay the bearer at a place named
therein payable semiannually in accordance with the tenor and terms of the
interest coupons attached. The bonds shall mature serially not to exceed 30
years from the date of issue.
(2) For the purpose of
performing any of the powers conferred by ORS 267.510 to 267.650 a district,
when authorized at any properly called election held for such purpose, shall
have the power to borrow money by the issuance and sale also of revenue bonds
and to pledge as security therefor, all or any part of the unobligated net
income or revenue of the district. The revenue bonds shall be issued in the
same manner and form as are general obligation bonds of the district but they
shall be payable both as to principal and interest from revenues only. The
revenue bonds shall not be subject to the percentage limitation applicable to
general obligation bonds and shall not be a lien on any of the taxable property
within the corporate limits of the district and shall be payable solely from
such part of revenues of the corporation as remains after the payment of
obligations having a priority and of all expenses of operation and maintenance
of the corporation. All revenue bonds shall contain a provision that both the
principal and interest are payable solely from the operating revenues of the
district remaining after paying such obligations and expenses.
(3) All general
obligation bonds and revenue bonds shall be [advertised for sale and sold in the manner prescribed in ORS 287.014 to
287.022 for the sale of bonds of cities] issued as prescribed in ORS
chapter 287.
SECTION 87. ORS 268.520 is amended to read:
268.520. (1) For the
purpose of performing any service that the district has power to perform, the
district, when authorized at any properly called election held for such
purpose, shall have the power to borrow money by the issuance and sale of
general obligation bonds. Such bonds shall never exceed in the aggregate 10
percent of the real market value of all taxable property within the district
computed in accordance with ORS 308.207. The bonds shall be so conditioned that
the district shall promise and agree therein to pay the bearer at a place named
therein, the principal sum with interest at a rate named therein payable semiannually
in accordance with the tenor and terms of the interest coupons attached. The
bonds shall mature serially not to exceed 30 years from the date of issue.
(2) All general
obligation bonds shall be [advertised for
sale and sold in the manner prescribed in ORS 287.014 to 287.022 for the sale
of bonds of cities] issued as prescribed in ORS chapter 287.
SECTION 88. ORS 268.620 is amended to read:
268.620. The revenue
bonds [issued and sold under]
authorized by ORS 268.600 to 268.660 shall be issued as prescribed in
ORS chapter 287.[:]
[(1) Shall be deemed to be for all purposes negotiable instruments,
subject only to the provisions of the bonds for registration, and need not
comply with requirements of the Uniform Commercial Code.]
[(2) May be issued in one or more series, bear such date or dates,
mature at such times and in such amounts, be in such denomination or
denominations, be payable at a designated place or places within or without the
State of Oregon or at the fiscal agency of the State of Oregon, be equally and
ratably secured without priority or be entitled or subject to such priorities
on all or any portion of the revenues of the district and, notwithstanding any
other provision of law to the contrary, bear such rate or rates of interest, including
a variable rate of interest to be determined at such times, in such manner and
by such agent appointed for such purpose or according to such formula as the
governing body may determine, and contain such other terms, conditions and
covenants, all as the governing body may determine.]
[(3) Shall contain a recital that principal of and interest on and
premium, if any, on the revenue bonds are payable solely out of revenues and
property of the district pledged to the payment thereof by the ordinance of the
governing body authorizing the issue of which the bonds are a part.]
[(4) May be in coupon form with or without privilege of registration or
may be in registered form, or both, with the privilege of converting and
reconverting from one form to another.]
[(5) May contain covenants of the district to protect and safeguard the
security and rights of holders of any such bonds and such other terms and
conditions, in conforming with ORS 268.600 to 268.660 which the governing body
in its discretion determines are necessary or desirable to protect the district
or increase the marketability of the bonds. ORS 268.600 to 268.660 and any such
ordinance which constitutes a contract with the holders of the bonds and the
provisions thereof shall be enforceable by any holder or any number of holders
of the bonds, as the governing body may determine.]
[(6) Shall be in the form prescribed by the governing body and the bonds
and the coupons, if any, attached to the bonds shall be signed by the presiding
officer of the governing body and by the executive officer of the district,
either manually or by means of their printed, engraved or lithographed
signature, with the seal of the district or a facsimile thereof printed,
engraved or lithographed thereon or affixed thereto. However, in the event the
bonds are to be signed by means of the printed, engraved or lithographed
facsimile signatures of both the presiding officer of the governing body and
the executive officer of the district, the ordinance authorizing the issuance of
such bonds shall provide that no bond shall be valid or obligatory for any
purpose or be entitled to the benefits of or security provided by the ordinance
unless and until such bond has been authenticated by means of the manual
signature of a duly authorized officer of the bond trustee, paying agent,
registrar or other agent appointed for such purpose. Pending the preparation
and delivery of definitive bonds, a district may issue interim certificates or
temporary bonds, exchangeable for definitive bonds when such bonds shall have
been executed and are available for delivery. Such interim certificates or
temporary bonds may contain such terms and conditions as the governing body may
determine.]
[(7) May be issued with the right reserved to the governing body to
redeem the bonds at par or at par plus a premium, in such order, and at such
time or times prior to the final maturity date or dates of the bonds, as the
ordinance may provide or as otherwise determined by the governing body. Notice
of redemption shall be given in the manner specified in the bonds, as provided
in ORS 288.520. Newspaper publication of notice of redemption is not required
for bonds that are in registered form.]
SECTION 89. ORS 271.390 is amended to read:
271.390. (1) As used in this section:
(a) “Council of
governments” means a council of governments or other similar entity created
prior to the enactment of ORS 190.010 (5) on September 29, 1991.
(b) [“Governmental unit”] “Public body”
has the meaning given that term in [ORS
288.150] section 42 of this 2007 Act.
(c) “Real or personal
property” means land, improvements to land, structures, fixtures, personal
property, including furnishings, equipment and computer software purchases and
licenses, and any costs that may be capitalized under generally accepted
accounting principles and treated as costs of personal property.
(2) A [governmental unit] public body or
a council of governments may enter into contracts for the leasing, rental or
financing of any real or personal property that the governing body of the [governmental unit] public body or
council of governments determines is needed, including contracts for rental,
long term leases under an optional contract for purchase, financing agreements
with vendors, financial institutions or others, or for purchase of any
property. Contracts made by a [governmental
unit] public body or a council of governments are subject to the
terms of its charter, intergovernmental agreement or other organizing document,
if applicable. If authorized by the governing body, the contracts may:
(a) Provide that the
obligations of the [governmental unit]
public body or council of governments under the contract is secured by a
mortgage on or other security interest in the property to be leased, rented,
purchased or financed under the contract.
(b) Provide that the
obligations of the [governmental unit]
public body or council of governments under the contract are payable out
of all or any portion of [the]
lawfully available funds[, as defined in ORS 288.162, of the governmental unit] of the
public body or council of governments, and lawfully available funds may be
pledged to the payment of those obligations.
(c) If authorized by the
charter, intergovernmental agreement or other organizing document of the [governmental unit] public body or
council of governments, contain a covenant on the part of the [governmental unit] public body or
council of governments to budget and appropriate in each fiscal year, in
accordance with law, sums sufficient to pay when due the amounts owing under
the contract.
(d) Provide for the
issuance of certificates of participation in the payment obligations of the [governmental unit] public body or
council of governments under the contract and contain other covenants,
agreements and provisions determined to be necessary or appropriate in order to
better secure the obligations of the [governmental
unit] public body or council of governments.
(3) The lien of the
pledge, mortgage or security interest is valid and binding from the time of
entering into the contract. The revenue or property is immediately subject to
the lien without physical delivery, filing or other act, and the lien is
superior to all other claims and liens of any kind whatsoever. Subject to the
terms, provisions and limitations of the contract, the lien may be foreclosed
by a proceeding brought in the circuit court of the county in which the [governmental unit] public body,
or the greater part thereof, or the main office of the council of governments
is located, and any tangible real or personal property subject to the lien may
be sold upon the order of the court. The proceeds of the sale must be applied
first to the payment of the costs of foreclosure and then to the amounts owing
under the contract, with any balance being paid to the [governmental unit] public body or council of governments.
The authority granted by this section is in addition to, and not in lieu of,
any other statutory or charter authority.
(4) A [governmental unit] public body or
council of governments that has entered into a lease purchase or installment
purchase agreement may enter into a financing agreement to refinance the
obligations of the [governmental unit]
public body or council of governments under the lease purchase or
installment purchase agreement.
(5) The estimated
weighted average life of a financing contract executed under this section may
not exceed the estimated dollar weighted average life of the real or personal
property that is financed with the contract.
SECTION 90. ORS 276.429 is amended to read:
276.429. (1) The Oregon
Department of Administrative Services may enter into, as appropriate, leases,
including lease with option to purchase, installment purchases and rental
agreements, as lessee, for office quarters for state agencies. In determining
which method of acquiring office quarters is most appropriate under the
circumstances, the department shall consider cost and the long-term best
interests of the state. It is the policy of the state, in fulfilling the
objectives set forth in ORS 276.426, to acquire office quarters in the most
cost-effective manner feasible.
(2) The costs to the
department incurred for the purpose of making such office space ready for
occupancy, including professional services, remodeling, equipment acquisition and
other similar costs paid to others or incurred by the department, may be
advanced out of the Oregon Department of Administrative Services Operating
Fund. The fund shall be reimbursed for costs so advanced from charges paid to
the department by the agency leasing the space as a tenant. Where more than one
agency occupies the space, the charges shall be assessed and collected from the
agencies in the manner determined by the department.
(3) Immediately
following each monthly rental period, the department shall bill each state
agency occupying office quarters leased under subsection (1) of this section, a
sum equal to such part of the total amount required for the rent of such
quarters as the rental value of the space occupied by each of the state agencies
bears to the whole amount of the rental value of such space so leased by the
state. Such sums and rental values shall be determined by the department.
Moneys collected therefor shall be placed in the Oregon Department of
Administrative Services Operating Fund established in ORS 283.076 and used for
the payment of the rental and operating expenses of such office quarters.
(4) Prior to entering
into any lease purchase or installment purchase agreement or before exercising
any purchase option in agreements made under subsection (1) of this section,
the department shall report to the legislative review agency established in ORS
291.371. However, the department shall not enter into any lease purchase or
installment purchase agreement in excess of $100,000 under any provision
of law other than ORS 283.085 to 283.092[,
286.515 and 286.525].
(5) The title to
properties acquired through lease-purchase options authorized in subsection (1)
of this section shall vest automatically in the Oregon Department of Administrative
Services in the name of the state. Properties so acquired shall be operated as
office buildings as provided in ORS 276.004.
SECTION 91. ORS 279A.025 is amended to read:
279A.025. (1) Except as
provided in subsections (2) to (4) of this section, the Public Contracting Code
applies to all public contracting.
(2) The Public
Contracting Code does not apply to:
(a) Contracts between
contracting agencies or between contracting agencies and the federal
government;
(b) Insurance and
service contracts as provided for under ORS 414.115, 414.125, 414.135 and
414.145 for purposes of source selection;
(c) Grants;
(d) Contracts for
professional or expert witnesses or consultants to provide services or
testimony relating to existing or potential litigation or legal matters in
which a public body is or may become interested;
(e) Acquisitions or
disposals of real property or interest in real property;
(f) Sole-source
expenditures when rates are set by law or ordinance for purposes of source
selection;
(g) Contracts for the
procurement or distribution of textbooks;
(h) Procurements by a
contracting agency from an Oregon Corrections Enterprises program;
(i) The procurement,
transportation or distribution of distilled liquor, as defined in ORS 471.001,
or the appointment of agents under ORS 471.750 by the Oregon Liquor Control
Commission;
(j) Contracts entered
into under ORS chapter 180 between the Attorney General and private counsel or
special legal assistants;
(k) Contracts for the
sale of timber from lands owned or managed by the State Board of Forestry and
the State Forestry Department;
(L) Contracts for forest
protection or forest related activities, as described in ORS 477.406, by the
State Forester or the State Board of Forestry;
(m) Sponsorship agreements
entered into by the State Parks and Recreation Director in accordance with ORS
565.080 (4);
(n) Contracts entered
into by the Housing and Community Services Department in exercising the
department’s duties prescribed in ORS chapters 456 and 458, except that the
department’s public contracting for goods and services, as defined in ORS
279B.005, is subject to ORS chapter 279B;
(o) Contracts entered
into by the State Treasurer in exercising the powers of that office prescribed
in ORS chapters 178, 286, 287, [288,]
289, 293, 294 and 295, including but not limited to investment contracts and
agreements, banking services, clearing house services and collateralization
agreements, bond documents, certificates of participation and other debt
repayment agreements, and any associated contracts, agreements and documents,
regardless of whether the obligations that the contracts, agreements or
documents establish are general, special or limited, except that the State
Treasurer’s public contracting for goods and services, as defined in ORS
279B.005, is subject to ORS chapter 279B;
(p) Contracts,
agreements or other documents entered into, issued or established in connection
with:
(A) The [incurring of debt by] issuance of
obligations, as defined in sections 17 and 50 of this 2007 Act, of a public
body[, including
but not limited to the issuance of bonds, certificates of participation and
other debt repayment obligations, and any associated contracts, agreements or
other documents, regardless of whether the obligations that the contracts,
agreements or other documents establish are general, special or limited];
(B) The making of
program loans and similar extensions or advances of funds, aid or assistance by
a public body to a public or private body for the purpose of carrying out,
promoting or sustaining activities or programs authorized by law; or
(C) The investment of
funds by a public body as authorized by law, and other financial transactions
of a public body that by their character cannot practically be established
under the competitive contractor selection procedures of ORS 279B.050 to
279B.085;
(q) Contracts for
employee benefit plans as provided in ORS 243.105 (1), 243.125 (4), 243.221,
243.275, 243.291, 243.303 and 243.565; or
(r) Any other public
contracting of a public body specifically exempted from the code by another
provision of law.
(3) The Public
Contracting Code does not apply to the public contracting activities of:
(a) The
(b) The Oregon
University System and member institutions, except as provided in ORS 351.086;
(c) The legislative
department;
(d) The judicial
department;
(e) Semi-independent
state agencies listed in ORS 182.451 and 182.454, except as provided in ORS
279.835 to 279.855 and 279A.250 to 279A.290;
(f)
(g) The
(h) The Travel
Information Council, except as provided in ORS 279A.250 to 279A.290;
(i) The
(j) The
(k) Any other public
body specifically exempted from the code by another provision of law.
(4) ORS 279A.200 to
279A.225 and 279B.050 to 279B.085 do not apply to contracts made with qualified
nonprofit agencies providing employment opportunities for disabled individuals
under ORS 279.835 to 279.855.
SECTION 92. ORS 280.075 is amended to read:
280.075. (1)
Notwithstanding any other law and when not inconsistent with or otherwise
provided for in the Oregon Constitution, whenever a proposed local option tax
is submitted to a vote of the people by any subdivision, the statement in the
ballot title for the measure that explains the chief purpose of the measure and
gives reasons for the measure shall state the total amount of money to be
raised by the proposed local option tax, in dollars and cents. If the statement
in the ballot title for the measure submitted includes an estimated tax impact,
it shall be based on the most current estimate of assessed value from the
county assessor. The measure shall bear the statement: “The estimated tax cost
for this measure is an ESTIMATE ONLY based on the best information available
from the county assessor at the time of estimate.”
(2) Subsection (1) of
this section does not apply to a local option tax described in ORS 280.060 (1)(b). For a levy described in ORS 280.060 (1)(b), an estimate of the total amount of money to be raised
for each year of the proposed local option tax shall be stated in dollars and
cents. If the levy described in ORS 280.060 (1)(b)
raises more money than estimated, the excess collections above that estimate
shall be considered a budget resource for the levy fund in the next fiscal year
of the subdivision. This section [has no
application to elections and levies with respect to bonds, for which provision
is made in ORS 287.004 to 287.022 and 287.052 to 287.488 or other laws]
does not apply to an election authorizing general obligation bonds or the tax
levies to repay general obligation bonds.
(3) The statement or
statements required by subsections (1) and (2) of this section shall be added
to and made a part of the 175-word statement required by ORS 250.035. The
number of words contained in the statements described in subsections (1) and
(2) of this section shall not be included in the 175-word limitation.
SECTION 93. ORS 280.450 is amended to read:
280.450. Bonds
authorized under ORS 280.410 to 280.485 shall be issued in accordance with the
provisions of the charter of the city relating to bonds payable from income of
revenue producing facilities. Bond issues may mature at any time within 40
years from the date of issue[, may be sold at public or private sale and shall be sold in accordance
with the provisions of ORS 288.515 to 288.600]. Bonds shall be issued as
prescribed in ORS chapter 287.
SECTION 94. ORS 283.085 is amended to read:
283.085. As used in ORS
283.085 to 283.092[, 286.515 and 286.525]:
(1) “Available funds”
means funds appropriated or otherwise made available by the Legislative
Assembly to pay amounts due under a financing agreement for the fiscal period
in which the payments are due, together with any unexpended proceeds of the
financing agreement, and any reserves or other amounts which have been
deposited in trust to pay amounts due under the financing agreement.
(2) “Credit enhancement
agreement” means any agreement or contractual relationship between the state
and any bank, trust company, insurance company, surety bonding company, pension
fund or other financial institution providing additional credit on or security
for a financing agreement or certificates of participation authorized by ORS
283.085 to 283.092[, 286.515 and 286.525].
(3) “Director” means the
Director of the Oregon Department of Administrative Services.
(4)(a) “Financing
agreement” means a lease purchase agreement, an installment sale agreement, a
loan agreement or any other agreement:
(A) To finance real or
personal property that is or will be owned and operated by the state or any of
its agencies;
(B) To finance
infrastructure related to a facility that is owned and operated by the state;
(C) To finance
infrastructure components that are owned or operated by a local government
agency of this state if the director determines that financing the
infrastructure will facilitate the construction or operation of an adult or
juvenile corrections facility or a public safety training facility owned and
operated by the state or any of its agencies;
(D) To finance all or a
portion of the state’s pension liabilities for retirement, health care or
disability benefits, in an amount that produces net proceeds that do not exceed
the State Treasurer’s estimate of those liabilities based on information
provided to the State Treasurer by the Public Employees Retirement System; or
(E) To refinance
previously executed financing agreements.
(b) As used in this
subsection, “infrastructure” includes, but is not limited to, sewer and water
systems and road improvements.
(5) “Personal property”
means tangible personal property, software and fixtures.
(6) “Property rights”
means, with respect to personal property, the rights of a secured party under
ORS chapter 79, and, with respect to real property, the rights of a trustee or
lender under a lease authorized by ORS 283.089 [(5)] (1)(e).
(7) “Software” means
software and training and maintenance contracts related to the operation of
computing equipment.
(8) “Treasurer” means
the State Treasurer.
SECTION 95. ORS 283.087 is amended to read:
283.087. With the
approval of the State Treasurer, the Director of the Oregon Department of
Administrative Services may enter into financing agreements in accordance with
ORS 283.085 to 283.092[, 286.515 and
286.525], and may exercise the powers granted to a related agency, as
defined in section 2 of this 2007 Act, by ORS chapter 286 for bonds in
connection with those financing agreements upon such terms as the director
and the treasurer find to be advantageous to the state. Financing agreements
shall be subject to the following limitations:
(1) Amounts payable by
the state under a financing agreement shall be limited to available funds. In
no circumstance shall the state be obligated to pay amounts due under a
financing agreement from any source other than available funds. If there are
insufficient available funds to pay amounts due under a financing agreement,
the lender may exercise any property rights which the state has granted to it
in the financing agreement, against the property which was purchased with the
proceeds of the financing agreement, and apply the amounts so received toward
payments scheduled to be made by the state under the financing agreement.
(2) No property rights
may be granted in property unless the property is being acquired, substantially
improved or refinanced with the proceeds of a financing agreement, or is land
on which such property is located.
(3) [For periods after June 30, 1989,] The
principal amount of financing agreements entered into by the state pursuant to
ORS 283.085 to 283.092[, 286.515 and
286.525] shall be treated as an amount of bonds and [shall be] is subject to [the
provisions of ORS 286.505 to 286.545] section 9 of this 2007 Act.
(4) The limitations of
subsection (3) of this section shall not apply to financing agreements which
are used to refinance previously executed financing agreements. The expenditure
of funds used to finance previously executed financing agreements and pay the
costs incurred to issue the new financing agreements shall be recorded using administrative
budget limitations.
(5) The state or any
state agency shall not enter into financing agreements under any provision of
law other than ORS 283.085 to 283.092[,
286.515 and 286.525] if the principal amount of the financing agreement,
together with the principal amount of any financing agreement previously issued
by the state or a state agency for the same project, exceeds $100,000.
(6) Upon the request and
with the approval of the Chief Justice of the Supreme Court or the State Court
Administrator, the Director of the Oregon Department of Administrative Services
may enter into financing agreements in accordance with ORS 283.085 to 283.092[, 286.515 and 286.525], on behalf of the
Judicial Department.
[(7) Financing agreements may bear interest that is includable in, or is
excludable from, gross income under the Internal Revenue Code.]
SECTION 95a. ORS 283.089 is amended to read:
283.089. (1) With the approval of the State Treasurer, the Director of
the Oregon Department of Administrative Services may:
[(1)] (a) Enter into agreements with trustees to hold
financing agreement proceeds, payments and reserves as security for lenders,
and to issue certificates of participation in the right to receive payments due
from the state under a financing agreement. Amounts held with a trustee shall
be invested by the trustee at the direction of the State Treasurer.
Interest earned on any investments held by a trustee as security for a
financing agreement may, at the option of the director, be credited to the
accounts held by the trustee and applied in payment of sums due under a
financing agreement.
[(2)] (b) Enter into credit enhancement agreements for
financing agreements or certificates of participation, provided that such
credit enhancement agreements shall be payable solely from available funds and
amounts received from the exercise of property rights granted under such
financing agreements.
[(3)] (c) Use the gross proceeds of financing agreements for
the purposes described in ORS 283.085 (4) and to pay the costs of reserves,
credit enhancements and other costs associated with issuing, administering and
maintaining the financing.
[(4)] (d) Use a single financing
agreement to finance property to be used by multiple state agencies.
[(5)] (e) Subject to ORS 283.087
(2), grant leases of real property with a trustee or lender. Such leases
may be for a term which ends on the date on which all amounts due under a
financing agreement have been paid or provision for payment has been made, or
10 years after the last scheduled payment under a financing agreement,
whichever is later. Such leases may grant the trustee or lender the right to
evict the state and exclude it from possession of the real property for the
term of the lease if the state fails to pay when due the amounts scheduled to
be paid under a financing agreement or otherwise defaults under a financing
agreement. Upon default, the trustee or lender may sublease the land to third
parties and apply any rentals toward payments scheduled to be made under a financing
agreement.
[(6)] (f) Subject to ORS 283.087
(2), grant security interests in personal property to trustees or lenders.
Such security interests shall attach and be perfected on the date the state
takes possession of the personal property, or the date the lender advances
money under a financing agreement, whichever is later. A security interest
authorized by this section shall have priority over all other liens and claims.
Upon default, the secured party shall have the rights and remedies available to
a secured party under ORS chapter 79 for a first, perfected security interest
in goods and fixtures. No later than 10 days after a security interest
authorized by this section attaches, the state shall cause a financing
statement for the security interest to be filed with the Secretary of State in
the same manner as financing statements are filed for goods; however, failure
to file such a statement shall not affect the perfection of the security
interest.
[(7)] (g) Pledge for the benefit
of trustees and lenders any amounts which are deposited with a trustee in
accordance with a financing agreement. The pledge shall be valid and
binding from the time it is made, the amounts so pledged shall immediately be
subject to the lien of the pledge without filing, physical delivery or other
act, and the lien of the pledge shall be superior to all other claims and liens
of any kind whatsoever.
[(8)] (h) Bill any state agency that benefits from a
financing agreement for an appropriate share of the financing costs[, including debt service,] on a monthly
or other periodic basis, and deposit payments received in connection with [such] the billings with a trustee
as security for a financing agreement. Any state agency receiving such a bill
shall pay the amounts billed from the first amounts legally available to it.
The director shall allocate in appropriate shares the financing costs of a
financing agreement entered into for the purpose described in ORS 283.085
(4)(a)(D) among all state agencies based on their payroll costs. [As used in this subsection, “state agency”
has the meaning given that term in ORS 286.730.]
[(9)] (i) Purchase fire and extended coverage or other
casualty insurance for property which is acquired or refinanced with proceeds
of a financing agreement, assign the proceeds thereof to a lender or trustee to
the extent of their interest, and covenant to maintain such insurance while the
financing agreement is unpaid, so long as available funds are sufficient to
purchase such insurance.
(2) As used in this section:
(a) “Financing costs”
means the 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 entering into financing agreements and maintaining
the certificate of participation program, including but not limited to paying:
(A) Amounts due under
financing agreements;
(B) Costs and
obligations the state incurs in connection with the exercise of a power granted
by this section; and
(C) Amounts due in
connection with the investment of proceeds of financing agreements.
(b) “State agency” has
the meaning given that term in ORS 286.730.
SECTION 96. ORS 283.092 is amended to read:
283.092. A lease or
financing agreement authorized by ORS 283.085 to 283.092[, 286.515 and 286.525] shall not cause property to be subject to
property taxation and shall be disregarded in determining whether property is
exempt from taxation under ORS chapter 307.
SECTION 97. ORS 285B.323 is amended to read:
285B.323. As used in ORS 285B.320 to 285B.371, unless the context
requires otherwise:
(1) “Bond” or “revenue
bond” means [any evidence of
indebtedness, including but not limited to any bond, note, obligation, loan
agreement, financing agreement, contracts for leasing, rental or financing of
real or personal property, including contracts for rental, long term leases
under an optional contract for purchase, financing agreements with vendors,
financial institutions or others or for purchase of any property secured by
revenues or from other financing sources as provided in ORS 285B.320 to
285B.371. A bond, as defined in this subsection and issued under ORS 285B.320
to 285B.371, shall be considered a revenue bond for purposes of ORS 286.031]
a revenue bond, as defined in section 2 of this 2007 Act.
(2) “Economic
development project” includes any properties, real or personal, used or useful
in connection with a revenue producing enterprise [or any solid waste disposal facilities], an exempt facility or a
nonprofit entity, and [related]
vehicles, rolling stock or equipment related to an enterprise, facility or
entity. “Economic development project” shall not include any facility or
facilities designed primarily for the generation, transmission, sale or
distribution of electrical energy.
(3) “Eligible project”
means an economic development project found by the Oregon Economic and
Community Development Commission to meet standards of the commission adopted
under ORS 285A.110. The commission may treat as a single eligible project for
bonding purposes any number of economic development projects determined to be
eligible projects.
(4) “Exempt facility”
means any facility described under section 142(a) of the Internal Revenue Code.
(5) “Nonprofit entity”
means an institution, organization or entity exempt from taxation under section
501(c)(3) of the Internal Revenue Code.
SECTION 97a. ORS 285B.326 is amended to read:
285B.326. (1) Upon
determining an economic development project an “eligible project,” the Oregon
Economic and Community Development Commission shall [forward the application to] request that the State Treasurer[, who shall
determine whether to] issue the bonds.
(2) The commission shall
collect [the] fees [set forth in subsection (3) of this section
from an applicant that seeks to have an economic development project declared
eligible for financing. The fee may be collected even though the project has
not been determined to be eligible for financing] in accordance with
rules adopted by the commission. Moneys collected under this subsection
shall be deposited in the Oregon Community Development Fund created under ORS
285A.227 and are continuously appropriated to the commission for the purpose of
administration or funding of any program it is authorized to operate.
(3) [The fees described in subsection (2) of this
section are as follows:]
[(a) $250 for an application of not to exceed
$500,000.]
[(b) $500 for an application of more than
$500,000.]
[(c) A closing fee of not to exceed one-half of one percent of the total
bond issue for the project, as determined by the commission] The
commission shall establish by rule fees sufficient to reimburse the commission
for administrative expenses incurred in connection with the initial review of
an eligible project and matters arising from the issuance of the bonds.
SECTION 98. ORS 285B.335 is amended to read:
285B.335. (1) In
addition to any other powers granted by law or by charter, [in relation to an eligible project, the
state, acting through the State Treasurer or a designee thereof,] the
Economic and Community Development Department may:
[(1)] (a) Enter into agreements to finance the costs of an
eligible project by loaning or otherwise making available the proceeds of bonds
authorized by ORS 285B.344 to [any
person, firm or public or private corporation or federal or state governmental
subdivision or agency] a person, an agency of the federal government or
state government, as defined in ORS 174.111, under [such] terms and with [such]
security [as the state may approve] approved
by the department;
[(2)] (b) Lease and sublease eligible projects to [any person, firm or public or private
corporation or federal or state governmental subdivision or agency in such
manner that rents to be charged for the use of such projects shall be
established, and revised from time to time as necessary, so as to produce
income and revenue sufficient to provide for the prompt payment of principal of
and interest on all bonds issued under this section when due, and the lease or
financing agreement shall also provide that the lessee, borrower or financing
party shall be required to pay all expenses of the operation and maintenance of
the project including, but without limitation, adequate insurance thereon and
insurance against all liability for injury to persons or property arising from
the operation thereof, and all taxes and special assessments levied upon or
with respect to the leased premises and payable during the term of the lease,
during which term ad valorem taxes in the same amount and to the same extent as
though the lessee were the owner of all real and personal property comprising
the project] a person, an agency of the federal government or state
government, as defined in ORS 174.111, subject to subsection (2) of this
section;
[(3) Pledge and assign to the holders of such bonds or a trustee
therefor all or any part of the revenues of one or more eligible projects owned
or to be acquired by the state, and define and segregate such revenues or
provide for the payment thereof to a trustee;]
(c) Pledge or assign
all or part of the revenues of one or more eligible projects owned or to be
acquired by the state to the holders of bonds issued under this section or to a
trustee for the holders, and segregate the revenues or provide for payment of
the revenues to the trustee.
[(4)] (d) Mortgage or otherwise encumber eligible projects in
favor of the holders of [such bonds or in
favor of any escrow agent, vendor, lender, other financing party or trustee
therefor. However, in creating any such mortgages or encumbrances the state can
not obligate itself] bonds issued under this section, a trustee for the
holders of the bonds, or an escrow agent, vendor, lender, other financing party
or trustee for the bonds without obligating the state except with respect
to the project;
[(5) Make all contracts, execute and deliver all instruments, and do all
things necessary or convenient in the exercise of the powers granted by this
section, or in the performance of its covenants or duties, or in order to secure
the payment of its bonds; including a contract entered into prior to the
construction, acquisition and installation of the eligible project authorizing
the lessee, borrower or other financing party, subject to such terms and
conditions as the state shall find necessary or desirable and proper, to
provide for the construction, acquisition and installation of the buildings,
improvements and equipment to be included in the project by any means available
to the lessee, borrower or other financing party, and in the manner determined
by the lessee, borrower or other financing party, and without advertisement for
bids as may be required for the construction, acquisition or installation of
other public facilities;]
(e) Make contracts,
execute instruments and do what is necessary or desirable to exercise the
powers granted by this section, to perform the covenants or duties of this
state or to secure the payment of bonds issued under this section. Contracts
that may be made by the state include, but are not limited to, contracts
entered into prior to construction, acquisition or installation of an eligible
project that authorize, subject to terms and conditions the state finds
necessary or desirable, a lessee to provide for construction, acquisition or
installation of buildings, improvements or equipment to be included in the
project.
[(6) Enter into and perform such contracts and agreements with political
subdivisions and state agencies as the respective governing bodies of the same
may consider proper and feasible for or concerning the planning, construction,
installation, lease, or other acquisition, and the financing of such
facilities, which contracts and agreements may establish a board, commission or
such other body as may be deemed proper for the supervision and general
management of the facilities of the eligible project;]
(f) Enter into and
perform contracts and agreements with participating institutions for the
planning, construction, installation, acquisition, leasing or financing of
facilities of an eligible project, including a contract or agreement that
establishes a body for the supervision and general management of the
facilities.
[(7) Accept from any authorized agency of the state or federal
government loans or grants for the planning, construction, acquisition,
leasing, or other provision of any eligible project, and enter into agreements
with such agency respecting such loans or grants; and]
(g) Accept loans or
grants for the planning, construction, installation, acquisition, leasing or
other provision of an eligible project from an authorized agency of the federal
government, and enter into agreements with the agency respecting the loans or
grants.
[(8)] (h) Acquire, own, sell, assign or otherwise hold legal
or equitable title to or an interest in eligible projects or hold federal tax
ownership of eligible projects.
(2) A lease or
sublease entered into under subsection (1)(b) of this
section must provide that:
(a) Rents charged for
the use of the project are established and revised as necessary to produce
sufficient revenue to allow for payment of the principal of and interest on
bonds issued under this chapter when due; and
(b) The lessee or
sublessee is required to pay:
(A) The expenses of the
operation and maintenance of the project including, but not limited to,
adequate insurance on the project and insurance against liability for injury to
persons or property arising from the operation of the project; and
(B) The taxes and
special assessments levied upon the leased or subleased premises and payable
during the term of the lease or sublease.
(3) During the term of a
lease or sublease entered into under subsection (1)(b)
of this section, ad valorem taxes must be imposed on the real and personal
property of the eligible project in the same manner as the taxes would be
imposed if the lessee or sublessee were the owner of the eligible project.
SECTION 99. ORS 285B.344 is amended to read:
285B.344. [(1) If the State Treasurer determines that
bonds should be issued:]
[(a)] (1) At the request of the Economic and Community
Development Department, the State Treasurer may [authorize and issue in the name of the State of Oregon] issue
under ORS 285B.320 to 285B.371 and ORS chapter 286 bonds secured by
revenues from eligible economic development projects or from other financing
sources to finance or refinance in whole or part the cost of acquisition,
construction, reconstruction, improvement or extension of projects. The bonds
shall be identified by project.[and issued in the manner prescribed by ORS 286.010,
286.020 and 286.105 to 286.135, and] Refunding bonds may be issued to
refinance such bonds.
[(b)] (2) [The State
Treasurer shall designate the underwriter, vendor, lender or other financing
party, if any, and enter into appropriate agreements with each to carry out the
provisions of ORS 285B.320 to 285B.371. The Economic and Community Development
Department, with the approval of the State Treasurer, shall designate the
trustee and enter into appropriate agreements with the trustee to carry out the
provisions of ORS 285B.320 to 285B.371.] The department or the State
Treasurer may appoint bond counsel as [authorized
by ORS 288.523, or the State Treasurer may enter into an agreement with bond
counsel if the services provided under the agreement comply with the provisions
of ORS 288.523 and the appointment is approved by the Attorney General as
required by ORS 288.523. The department may not make an appointment or enter
into an agreement under this paragraph unless the State Treasurer has reviewed
and approved the terms and conditions of the appointment or agreement. ORS
279A.140 does not apply to any appointment or agreement described in this
paragraph] prescribed under section 20 of this 2007 Act.
[(2)] (3) Any escrow agent, bond registrar, paying agent or
trustee, if any, designated [by the State
Treasurer] to carry out all or part of the powers specified in ORS 285B.335
must agree to furnish financial statements and audit reports for each bond
issue.
SECTION 100. ORS 285B.350 is amended to read:
285B.350. Bonds
authorized under ORS 285B.320 to 285B.371 shall be issued in accordance with
the provisions of ORS [288.515 to 288.550]
chapter 286.
SECTION 101. ORS 285B.362 is amended to read:
285B.362. The official
action authorizing the issuance of bonds under ORS 285B.320 to 285B.371 to
finance or refinance in whole or in part, the acquisition, construction,
installation, reconstruction, improvement, betterment or extension of any
eligible project may contain covenants, notwithstanding that such covenants may
limit the exercises of powers conferred by ORS 285B.320 to 285B.371 in the
following respects and in such other respects as the [state, acting through the State Treasurer, or the designee of the
treasurer] Economic and Community Development Department may decide:
(1) The rents to be
charged for the use of properties acquired, constructed, installed,
reconstructed, improved, bettered or extended under the authority of ORS
285B.320 to 285B.371;
(2) The use and
disposition of the revenues of such projects;
(3) The creation and
maintenance of sinking funds and the regulation, use and disposition thereof;
(4) The creation and
maintenance of funds to provide for maintaining the eligible project and
replacement of properties depreciated, damaged, destroyed or condemned;
(5) The purpose or
purposes to which the proceeds of sale of bonds may be applied and the use and
disposition of such proceeds;
(6) The nature of
mortgages or other encumbrances on the eligible project made in favor of the
holder or holders of such bonds or in favor of any escrow agent, vendor,
lender, other financing party or trustee therefor;
(7) The events of
default and the rights and liabilities arising thereon and the terms and
conditions upon which the holders of any bonds may bring any suit or action on
such bonds or on any coupons appurtenant thereto;
(8) The issuance of
other or additional bonds or instruments payable from or constituting a charge
against the revenue of the eligible project;
(9) The insurance to be
carried upon the eligible project and the use and disposition of insurance
moneys;
(10) The keeping of
books of account and the inspection and audit thereof;
(11) The terms and
conditions upon which any or all of the bonds shall become or may be declared
due before maturity and the terms and conditions upon which such declaration
and its consequences may be waived;
(12) The rights,
liabilities, powers and duties arising upon the breach by the municipality or
redevelopment agency of any covenants, conditions or obligations;
(13) The appointing of
and vesting in a trustee or trustees of the right to enforce any covenants made
to secure or to pay the bonds; the powers and duties of such trustee or
trustees, and the limitation of their liabilities;
(14) The terms and
conditions upon which the holder or holders of the bonds, or the holders of any
proportion or percentage of them, may enforce any covenants made under ORS
285B.320 to 285B.371;
(15) A procedure by
which the terms of any official action authorizing bonds or of any other
contract with bondholders, including but not limited to an indenture of trust
or similar instrument, may be amended or abrogated, and the amount of bonds the
holders of which may consent thereto, and the manner in which such consent may be
given; and
(16) The subordination
of the security of any bonds issued under ORS 285B.320 to 285B.371 and the
payment of principal and interest thereof, to the extent deemed feasible and
desirable by the state, to other bonds or obligations of the state issued to
finance the eligible project or that may be outstanding when the bonds thus
subordinated are issued and delivered.
SECTION 102. ORS 285B.371 is amended to read:
285B.371. The state,
acting through [the State Treasurer and]
the Oregon Economic and Community Development Commission[, or either of them,] may loan the
proceeds of the bonds authorized by ORS 285B.320 to 285B.371 for eligible
projects without the necessity of the state having any ownership or leasehold
interest in the eligible projects. Loans made pursuant to this section shall be
secured, if at all, to the extent deemed necessary or desirable by the [State Treasurer and the] Oregon Economic
and Community Development Commission.
SECTION 102a. ORS 285B.455 is amended to read:
285B.455. (1) There is
created the Special Public Works Fund, separate and distinct from the General
Fund. All moneys credited to the Special Public Works Fund are appropriated
continuously to the Economic and Community Development Department.
(2) The fund shall consist
of all moneys credited to the fund, including:
(a) Moneys appropriated
to the fund by the Legislative Assembly or transferred to the fund by the
Oregon Economic and Community Development Commission;
(b) Earnings on the
fund;
(c) Repayment of financial
assistance, including interest;
(d) Moneys received from
the federal government, other state agencies or local governments;
(e) Bond proceeds as
authorized under ORS 285B.410 to 285B.482 or other law; and
(f) Moneys from any
other source, including but not limited to grants and gifts.
(3) Moneys in the
Special Public Works Fund[, with the
approval of the State Treasurer,] may be invested as provided by ORS
293.701 to 293.820 and the earnings from the investments shall be credited to
the account in the Special Public Works Fund designated by the department.
(4) The department shall
administer the Special Public Works Fund.
(5) The department may
establish other accounts within the Special Public Works Fund for the payment
of project costs, reserves, debt service payments, credit enhancement,
administrative costs and operation expenses or any other purpose necessary to
carry out ORS 285B.410 to 285B.482.
(6) The department may
grant, expend or loan moneys in the fund to:
(a) Provide financial or
other assistance to municipalities for projects determined by the department to
be appropriate.
(b) Purchase goods or
services related to a project on behalf of the municipality.
(c) Provide state funds
as a match for federal funds available for the administration of the Community
Development Block Grant program.
(d) Finance
administrative costs of the department pursuant to ORS 285B.410 to 285B.482.
(e) Provide annual
grants on behalf of a municipality in the form of partial repayment to
bondholders of amounts owed.
(f) Cover contracts that
are issued to guaranty any portion of the obligation of a municipality to
finance a development project and that are not sold to the State of
(7) As used in this
section, “administrative costs” includes the department’s direct and indirect
costs for investigating and processing an application, developing a contract,
monitoring the use of funds by a municipality, investigating and resolving
budget discrepancies, closing a project and providing financial or other
assistance to a municipality.
SECTION 103. ORS 285B.470 is amended to read:
285B.470. In addition to
any other powers granted by law in relation to a development project, the
Economic and Community Development Department[, acting through the State Treasurer or
designee] may:
(1) Make all contracts,
execute all instruments and do all things necessary or convenient in the
exercise of the powers granted by this section, or in the performance of its covenants
or duties, or in order to secure the payment of its bonds;
(2) Enter into and
perform contracts and agreements with municipalities as the department may
consider proper and feasible for or concerning the planning, construction,
installation, lease or other acquisition, and the financing of projects; and
(3) Enter into covenants
for the benefit of bond owners regarding the use and expenditure of moneys in
the Special Public Works Fund.
SECTION 104. ORS 285B.473 is amended to read:
285B.473. [If the State Treasurer determines that
revenue bonds should be issued:]
(1) At the request of
the Economic and Community Development Department, the State Treasurer may
[authorize and issue in the name of the
State of Oregon] issue under ORS 285B.467 to 285B.479 and ORS chapter
286 revenue bonds secured by moneys paid to the Special Public Works Fund
pledged therefor to finance or refinance in whole or part the cost of
acquisition, construction, reconstruction, improvement or extension of
development projects. [The bonds shall be
issued in the manner prescribed by ORS chapter 286, and] Refunding bonds
may be issued to refinance the revenue bonds.
[(2) The State Treasurer shall designate the underwriter and enter into
appropriate agreements with the underwriter to carry out the provisions of ORS
285B.467 to 285B.479. The Economic and Community Development Department, with
the approval of the State Treasurer, shall designate the trustee and enter into
appropriate agreements with the trustee to carry out the provisions of ORS
285B.467 to 285B.479. The department may appoint bond counsel as authorized by
ORS 288.523, or the State Treasurer may enter into an agreement with bond
counsel if the services provided under the agreement comply with the provisions
of ORS 288.523 and the appointment is approved by the Attorney General as
required by ORS 288.523. The department may not make an appointment or enter
into an agreement under this subsection unless the State Treasurer has reviewed
and approved the terms and conditions of the appointment or agreement. ORS
279A.140 does not apply to any appointment or agreement described in this
subsection.]
(2) The department or
the State Treasurer may appoint bond counsel as prescribed in section 20 of
this 2007 Act.
SECTION 105. ORS 285B.479 is amended to read:
285B.479. (1) Revenue
bonds issued under ORS 285B.467 to 285B.479:
(a) [Shall] May not be payable from
nor charged upon any funds other than the revenue pledged to the payment
thereof, except as provided in this section, nor shall the state be subject to
any liability thereon. No holder or holders of such bonds shall ever have the
right to compel any exercise of the taxing power of the state to pay any such
bonds or the interest thereon, nor to enforce payment thereof against any
property of the state except those moneys pledged therefor in the Special
Public Works Fund, under the provisions of ORS 285B.467 to 285B.479.
(b) [Shall] May not constitute a
charge, lien or encumbrance, legal or equitable, upon any property of the
state, except those moneys paid to the Special Public Works Fund.
(2) A revenue
bond [shall] issued under ORS
285B.467 to 285B.479 does not constitute a debt of the State of Oregon
or a lending of the credit of [the]
this state within the meaning of any constitutional or statutory
limitation.
SECTION 105a. ORS 285B.533 is amended to read:
285B.533. (1)
Infrastructure lottery bonds shall be issued under ORS 286.560 to 286.580 [and 348.716] only at the request of the
Director of the Economic and Community Development Department. Infrastructure
lottery bonds may be issued in an amount sufficient to provide no more than $6
million of net proceeds to pay costs of infrastructure projects, plus the
amounts required to pay bond-related costs.
(2) The net proceeds
from the sale of the infrastructure lottery bonds shall be allocated to the
Economic and Community Development Department for the State of
(3) The net proceeds
from the sale of the infrastructure lottery bonds that are available to pay
costs of infrastructure projects shall be credited to the Water Fund created by
ORS 285B.563. All such net proceeds are appropriated continuously to the
Economic and Community Development Department only for payment of costs of
infrastructure projects described in subsection (2) of this section and for
payment of bond-related costs that are allocable to infrastructure lottery
bonds.
(4) The Economic and
Community Development Department and any municipality receiving proceeds of
infrastructure lottery bonds shall, if so directed by the Oregon Department of
Administrative Services, take any action specified by the Oregon Department of
Administrative Services that is necessary to maintain the excludability of
lottery bond interest from gross income under the United States Internal
Revenue Code.
SECTION 106. ORS 285B.548 is amended to read:
285B.548. [(1) Notwithstanding ORS 286.505 to 286.545,
infrastructure lottery bonds may be issued during the 1997-1999 biennium in an
aggregate principal amount that produces net proceeds for infrastructure
projects that shall not exceed $6 million, plus an amount that the State
Treasurer estimates will be required to pay bond-related costs.]
[(2) In future biennial periods, The amount of
infrastructure lottery bonds that may be issued shall be authorized under ORS
286.505 to 286.545.]
Infrastructure
lottery bonds may not be issued in excess of the amounts permitted by section 9
of this 2007 Act.
SECTION 106a. Section 4, chapter 756, Oregon Laws 2005, is
amended to read:
Sec.
4. (1)(a) For the biennium beginning July 1, 2005, the State
Treasurer is authorized to issue lottery bonds pursuant to ORS 286.560 to
286.580 [and 348.716] in the amount
of $6 million for payment of grants to the Coos County Airport District related
to the construction of a passenger terminal facility at the North Bend Airport,
plus an additional amount estimated by the State Treasurer for payment of
bond-related costs of the Economic and Community Development Department and the
State Treasurer.
(b) For the biennium
beginning July 1, 2007, the State Treasurer is authorized to issue lottery
bonds pursuant to ORS 286.560 to 286.580 [and
348.716] in the amount of $4 million for payment of grants to the Coos
County Airport District related to the construction of a passenger terminal
facility at the North Bend Airport, plus an additional amount estimated by the
State Treasurer for payment of bond-related costs of the Economic and Community
Development Department and the State Treasurer.
(2)(a) Net proceeds of
lottery bonds issued under subsection (1)(a) of this
section, in the amount of $6 million, shall be deposited in the North Bend
Airport Improvement Fund established by section 3, chapter 756,
(b) Net proceeds of
lottery bonds issued under subsection (1)(b) of this section, in the amount of
$4 million, shall be deposited in the North Bend Airport Improvement Fund
established by section 3, chapter 756, Oregon Laws 2005, [of this 2005 Act] not later than
December 15, 2007.
SECTION 107. 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 Water Fund are continuously appropriated to
the Economic and Community Development Department for the purposes 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 the charges, the per capita income of the
municipality and any 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 the 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 Water 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
Water 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 active service connections from 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 provides a continuing source of financing consistent with ORS
285B.413.
(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 when the department:
(A) Finds that without 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) The department
may charge administrative costs to the fund, but not to moneys segregated in
the account created by subsection (11) of this section, to pay for
administrative costs incurred by the department.
(b) To the extent
permitted by federal law, administrative costs of the department may be paid
from bond proceeds.
(10) 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 costs and operating expenses or any other
purpose necessary to carry out ORS 285B.560 to 285B.599.
(11) 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) 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 the moneys, shall be credited to the Water Development
Administration and Bond Sinking Fund created by ORS 541.830.
(12) As used in this
section, “administrative costs” include the department’s direct and indirect
costs for investigating and processing an application, developing a contract,
monitoring the use of funds by a municipality, investigating and resolving a
budget discrepancy, closing a project and providing financial and other
assistance to a municipality.
SECTION 108. ORS 285B.575 is amended to read:
285B.575. [If the State Treasurer determines that
revenue bonds shall be issued:]
(1) At the request of
the Economic and Community Development Department, the State Treasurer may
[authorize and] issue in the name of
the State of Oregon revenue bonds secured by moneys paid to the Water Fund and
pledged to finance or refinance in whole or in part the cost of a water
project. The revenue bonds issued under this section shall be issued in the
manner prescribed by ORS chapter 286, and refunding bonds may be issued to
refinance the revenue bonds.
[(2) The State Treasurer shall designate and enter into agreements with
the underwriter to carry out the provisions of ORS 285B.560 to 285B.599. The
Economic and Community Development Department, with the approval of the State
Treasurer, shall designate the trustee and enter into appropriate agreements
with the trustee to carry out the provisions of ORS 285B.560 to 285B.599. The
department may appoint bond counsel as authorized by ORS 288.523, or the State
Treasurer may enter into an agreement with bond counsel if the services
provided under the agreement comply with the provisions of ORS 288.523 and the
appointment is approved by the Attorney General as required by ORS 288.523. The
department may not make an appointment or enter into an agreement under this
subsection unless the State Treasurer has reviewed and approved the terms and
conditions of the appointment or agreement. ORS 279A.140 does not apply to any
appointment or agreement described in this subsection.]
(2) The department or
the State Treasurer may appoint bond counsel as prescribed under section 20 of
this 2007 Act.
SECTION 109. ORS 285B.584 is amended to read:
285B.584. In addition to
any other powers granted by law in relation to a water project, the Economic
and Community Development Department[, acting through the State Treasurer or the
State Treasurer’s designee,] may:
(1) Make all contracts,
execute all instruments and do all things necessary or convenient for the exercise
of the powers granted by this section, or for the performance of its covenants
or duties, or in order to secure the payment of its bonds;
(2) Enter into and
perform such contracts and agreements with municipalities as the department may
consider proper and feasible for or concerning the planning, construction,
installation, lease or other acquisition, and the financing of water projects;
and
(3) Enter into covenants
for the benefit of bond owners regarding the use and expenditure of moneys in
the Water Fund.
SECTION 109a. ORS 286.025 is amended to read:
286.025. All moneys
received under [ORS 286.020] ORS
287.034 and section 5 of this 2007 Act shall be deposited in the
Miscellaneous Receipts Account established in the General Fund for the State Treasurer.
The State Treasurer may [draw warrants in
payment of vouchers and drawn against the account in payment of costs] use
moneys in the account for payment of expenses of the State Treasurer [or of costs of the financial institution
appointed registrar as provided for in ORS 286.010 for printing, postage,
postal insurance, and for all other expenses connected with the registration,
reregistration or conversion to bearer form of] in connection with
bonds of the State of Oregon or a public body as defined in section 42 of
this 2007 Act.
SECTION 109b. ORS 286.063 is amended to read:
286.063. (1)
Notwithstanding any law limiting expenditures of a state agency, for the
purpose of repaying [or refinancing debt]
obligations of the state [in order]
to obtain savings in total or periodic debt service payments, a law limiting
expenditures does not apply to payments approved by the State Treasurer for
administrative expenses, debt service or financing costs that are
necessary or appropriate for the retirement or refunding of bonds[, certificates of participation or financing
agreements as defined in ORS 283.085] unless the law limiting expenditures
creates a specific exception to this section.
(2) The Oregon
Department of Administrative Services may establish administrative limitations
on the payment and recording of expenditures made pursuant to subsection (1) of
this section.
(3) The Oregon
Department of Administrative Services shall report incurred expenses and debt
service savings resulting from actions taken under subsection (1) of this
section that affect administrative expenses, debt service or financing costs
paid with moneys out of the General Fund or lottery funds, within 90 days of
taking action, to the Joint Committee on Ways and Means if the Legislative
Assembly is in session or to the Emergency Board during the interim between
legislative sessions.
SECTION 110. ORS 286.750 is amended to read:
286.750. (1) In
accordance with the applicable provisions of this chapter [and ORS chapter 288], the State Treasurer, after consulting with
the Director of the Oregon Department of Administrative Services, may issue
Article XI-O bonds from time to time for the purposes described in ORS 286.735
(2).
(2) Article XI-O bonds
may be issued and sold as provided in this chapter.[:]
[(a) Be sold at a competitive or negotiated
sale;]
[(b) Bear interest that is includable in or excludable from gross income
under the Internal Revenue Code; and]
[(c) Be sold on terms approved by the State Treasurer, including terms
related to the time of sale, the issuance of bonds in series, the maturity of
each series and the interest borne by each series of bonds.]
[(3) Subject to the approval of the State Treasurer, the Director of the
[(a) Acquire municipal bond insurance, a letter of credit, a line of
credit, surety bonds or another credit enhancement device for Article XI-O
bonds; and]
[(b) Enter into related agreements.]
[(4)] (3) Subject to the approval of the State Treasurer, the
Director of the Oregon Department of Administrative Services may:
(a) Enter into
agreements with a trustee or escrow agent regarding the use and application of
the amounts held in the Article XI-O Bond Fund or the Article XI-O Bond
Administration Fund; and
(b) Transfer amounts
credited to the bond fund or the bond administration fund to a trustee or
escrow agent.
SECTION 111. ORS 286.762 is amended to read:
286.762. (1) Article
XI-M bonds are a general obligation of the State of Oregon and must contain a
direct promise on behalf of the State of Oregon to pay the principal of, the
interest on and the premium, if any, on the Article XI-M bonds. The State of
(2) The State Treasurer,
with the concurrence of the Director of the Oregon Department of Administrative
Services, may issue Article XI-M bonds[:]
[(a)] as provided in this chapter, subject to the limit on
bond issuance established for the particular biennium [in ORS 286.505 to 286.545] pursuant to section 9 of this 2007
Act and at the request of the Director of the Office of Emergency
Management, for the purpose of financing all or a portion of the state share of
costs to plan and implement seismic rehabilitation of public education
buildings in the amount of the state share of costs, plus an amount determined
by the State Treasurer to pay estimated bond-related costs.
[(b) To refund Article XI-M bonds. The amount
of Article XI-M bonds issued under this paragraph may not exceed the estimated
costs of paying, redeeming or defeasing the refunded bonds, plus an amount
determined by the State Treasurer to pay estimated bond-related costs.]
(3) The State Treasurer
shall transfer the net proceeds of Article XI-M bonds issued for the purpose
described in subsection (2)(a) of this section to the Office of Emergency
Management for deposit in the Education Seismic Fund established under ORS
286.768.
SECTION 111a. ORS 286.768 is amended to read:
286.768. (1) The
Education Seismic Fund is established in the State Treasury, separate and
distinct from the General Fund. Amounts in the seismic fund may be invested as
provided in ORS 293.701 to 293.820, and interest earned on the seismic fund
must be credited to the seismic fund. Amounts credited to the seismic fund are
continuously appropriated to the Office of Emergency Management for the purpose
described in ORS 286.762 (2)[(a)] and for the purpose of paying bond-related costs. The office
shall deposit in the seismic fund:
(a) The net proceeds of
Article XI-M bonds transferred pursuant to ORS 286.762 (3);
(b) Amounts appropriated
or otherwise provided by the Legislative Assembly for deposit in the seismic
fund;
(c) Gifts, grants or
contributions received by the office for the purpose described in ORS 286.762
(2)[(a)];
and
(d) Moneys received as
repayment of, as a return on or in exchange for the grant or loan of net
proceeds of Article XI-M bonds.
(2) The office may
create separate accounts in the seismic fund as appropriate for the management
of moneys in the seismic fund.
(3) The office and any
other state agency or other entity receiving or holding net proceeds of Article
XI-M bonds shall, at the direction of the Oregon Department of Administrative
Services, take action necessary to maintain the excludability of interest on
Article XI-M bonds from gross income under the Internal Revenue Code.
(4) The office shall
transfer to the Article XI-M Bond Administration Fund the unexpended and
uncommitted amounts remaining in the seismic fund if:
(a) Unexpended funds
that are not contractually committed to a particular purpose remain in the
seismic fund on the last day of the biennium; and
(b) Article XI-M bonds
will be outstanding in the next biennium.
(5) The office may adopt
rules to carry out this section including, but not limited to, establishing:
(a) Required
contributions from applicants;
(b) Fees;
(c) Standards, terms and
conditions under which moneys in the seismic fund may be granted, loaned or
otherwise made available; and
(d) Procedures for
distributing and monitoring the use of moneys from the seismic fund.
SECTION 112. ORS 286.782 is amended to read:
286.782. (1) Article
XI-N bonds are a general obligation of the State of Oregon and must contain a
direct promise on behalf of the State of Oregon to pay the principal of, the
interest on and the premium, if any, on the Article XI-N bonds. The State of
(2) The State Treasurer,
with the concurrence of the Director of the Oregon Department of Administrative
Services, may issue Article XI-N bonds[:]
[(a)] as provided in this chapter, subject to the limit on
bond issuance established for the particular biennium [in ORS 286.505 to 286.545] pursuant to section 9 of this 2007
Act and at the request of the Director of the Office of Emergency
Management, for the purpose of financing all or a portion of the state share of
costs to plan and implement seismic rehabilitation of emergency services
buildings in the amount of the state share of costs, plus an amount determined
by the State Treasurer to pay estimated bond-related costs.
[(b) To refund Article XI-N bonds. The amount
of Article XI-N bonds issued under this paragraph may not exceed the estimated
costs of paying, redeeming or defeasing the refunded bonds, plus an amount
determined by the State Treasurer to pay estimated bond-related costs.]
(3) The State Treasurer
shall transfer the net proceeds of Article XI-N bonds issued for the purpose
described in subsection (2)(a) of this section to the Office of Emergency
Management for deposit in the Emergency Services Seismic Fund established under
ORS 286.788.
SECTION 112a. ORS 286.788 is amended to read:
286.788. (1) The
Emergency Services Seismic Fund is established in the State Treasury, separate
and distinct from the General Fund. Amounts in the seismic fund may be invested
as provided in ORS 293.701 to 293.820, and interest earned on the seismic fund
must be credited to the seismic fund. Amounts credited to the seismic fund are
continuously appropriated to the Office of Emergency Management for the purpose
described in ORS 286.782 (2)[(a)] and for the purpose of paying bond-related costs. The office
shall deposit in the seismic fund:
(a) The net proceeds of
Article XI-N bonds transferred pursuant to ORS 286.782 (3);
(b) Amounts appropriated
or otherwise provided by the Legislative Assembly for deposit in the seismic
fund;
(c) Gifts, grants or
contributions received by the office for the purpose described in ORS 286.782
(2)[(a)];
and
(d) Moneys received as
repayment of, as a return on or in exchange for the grant or loan of net
proceeds of Article XI-N bonds.
(2) The office may
create separate accounts in the seismic fund as appropriate for the management
of moneys in the seismic fund.
(3) The office and any
other state agency or other entity receiving or holding net proceeds of Article
XI-N bonds shall, at the direction of the Oregon Department of Administrative
Services, take action necessary to maintain the excludability of interest on
Article XI-N bonds from gross income under the Internal Revenue Code.
(4) The office shall
transfer to the Article XI-N Bond Administration Fund the unexpended and
uncommitted amounts remaining in the seismic fund if:
(a) Unexpended funds
that are not contractually committed to a particular purpose remain in the
seismic fund on the last day of the biennium; and
(b) Article XI-N bonds
will be outstanding in the next biennium.
(5) The office may adopt
rules to carry out this section including, but not limited to, establishing:
(a) Required
contributions from applicants;
(b) Fees;
(c) Standards, terms and
conditions under which moneys in the seismic fund may be granted, loaned or
otherwise made available; and
(d) Procedures for
distributing and monitoring the use of moneys from the seismic fund.
SECTION 113. ORS 289.005 is amended to read:
289.005. As used in this
chapter, unless the context requires otherwise:
(1) “Authority” means
the Oregon Facilities Authority created by this chapter.
(2) “Bonds” or “revenue
bonds” means [revenue bonds, notes, bond
anticipation notes and any other evidence of indebtedness of the authority
issued under the provisions of this chapter, including revenue refunding bonds,
notwithstanding that the same may be secured by any federally guaranteed
security, whether acquired by the authority or by a participating institution,
or by mortgage, the full faith and credit or by any other lawfully pledged
security of one or more participating institutions] revenue bonds, as
defined in section 2 of this 2007 Act.
(3) “Cost” means the
cost of:
(a) Construction,
acquisition, alteration, enlargement, reconstruction and remodeling of a
project, including all lands, structures, real or personal property, rights,
rights of way, air rights, franchises, easements and interests acquired or used
for or in connection with a project;
(b) Demolishing or
removing any buildings or structures on land as acquired, including the cost of
acquiring any lands to which such buildings or structures may be moved;
(c) All machinery and
equipment;
(d) Financing charges,
interest prior to, during and for a period after completion of construction and
acquisition, reasonably required amounts to make the project operational, provisions
for reserves for principal and interest and for extensions, enlargements,
additions, replacements, renovations and improvements;
(e) Architectural,
actuarial engineering, financial and legal services, plans specifications,
studies, surveys, estimates of costs and of revenues, administrative expenses,
expenses necessary or incident to determining the feasibility or practicability
of constructing the project; and
(f) Such other expenses
as may be necessary or incident to a project, the financing of such project and
the placing of the project in operation.
(4) “Cultural
institution” means a public or nonprofit institution within this state which
engages in the cultural, intellectual, scientific, environmental, educational
or artistic enrichment of the people of this state. “Cultural institution”
includes, without limitation, aquaria, botanical societies, historical
societies, land conservation organizations, libraries, museums, performing arts
associations or societies, scientific societies, wildlife conservation
organizations and zoological societies. “Cultural institution” does not mean
any school or any institution primarily engaged in religious or sectarian
activities.
(5) “Health care
institution” means a public or nonprofit organization that provides health care
and related services, including but not limited to the provision of inpatient
and outpatient care, diagnostic or therapeutic services, laboratory services,
medicinal drugs, nursing care, assisted living, elderly care and housing, including
retirement communities, and equipment used or useful for the provision of
health care and related services.
(6) “Housing institution”
means a public or nonprofit organization that provides decent, affordable
housing to low income persons.
(7) “Institution” means
an institution for housing, higher education or prekindergarten through grade
12 education, a school for the handicapped, a health care institution or a
cultural institution within this state.
(8) “Institution for
higher education” means a public or nonprofit educational institution within
this state authorized by law to provide a program of education beyond the high
school level, including community colleges and associate degree granting
institutions. “Institution for higher education” does not mean any school or
any institution primarily engaged in religious or sectarian activities.
(9) “Institution for
prekindergarten through grade 12 education” means an Oregon prekindergarten as
defined in ORS 329.170, a public educational institution within this state
authorized by law to provide a program of education for kindergarten through
grade 12 or a nonprofit educational institution within this state registered as
a private school under ORS 345.545 that provides a program of education for
prekindergarten through grade 12. “Institution for prekindergarten through
grade 12 education” does not mean a school or institution primarily engaged in
religious or sectarian activities.
(10) “Nonprofit” means
an institution, organization or entity exempt from taxation under section 501(c)(3) of the Internal Revenue Code as amended and in effect
on the effective date of this chapter.
(11) “Participating
institution” means a participating institution for health care, housing, higher
education, a participating school for the handicapped or a participating
cultural institution.
(12)(a) “Project” means
the financing or refinancing, including without limitation, acquisition,
construction, enlargement, remodeling, renovation, improvement, furnishing or
equipping, of the following:
(A) In the case of a
participating institution that is an institution for higher education, an
institution for prekindergarten through grade 12 education or a school for the
handicapped, a structure or structures suitable for use as a dormitory or other
multiunit housing facility for students, faculty, officers or employees, or a
dining hall, student union, administration building, academic building,
library, laboratory, research facility, classroom, athletic facility, health
care facility, maintenance, storage or utility facility and other structures or
facilities related to any of the structures required or used for the
instruction of students, the conducting of research or the operation of an
institution for higher education, an institution for prekindergarten through
grade 12 education or a school for the handicapped. It shall also include
landscaping, site preparation, furniture, equipment and machinery and other
similar items necessary or convenient for the operation of a particular facility
or structure in the manner for which its use is intended and shall further
include any furnishings, equipment, machinery and other similar items necessary
or convenient for the operation of an institution of higher education, an
institution for prekindergarten through grade 12 education or a school for the
handicapped, whether or not such items are related to a particular facility or
structure financed under this chapter;
(B) In the case of a
participating institution that is a housing institution, a structure or
structures suitable for use as housing, including residences or multiunit
housing facilities, administration buildings, maintenance, storage or utility
facilities and other structures or facilities related to any of the structures
required or used for the operation of the housing, including parking and other
facilities or structures essential or convenient for the orderly provision of
such housing. It shall also include landscaping, site preparation, furniture,
equipment and machinery and other similar items necessary or convenient for the
particular housing facility or structure in the manner for which its use is
intended and shall further include any furnishings, equipment, machinery and
other similar items necessary or convenient for the provision of housing,
whether or not such items are related to a particular facility or structure
financed under this chapter;
(C) In the case of a
participating institution that is a cultural institution, a structure or
structures suitable for its purposes, whether or not to be used to provide
educational services, or research resources, including use as or in connection
with an administrative facility, aquarium, assembly hall, auditorium, botanical
garden, exhibition hall, gallery, greenhouse, library, museum, scientific
laboratory, theater or zoological facility. It shall also include supporting
facilities, landscaping, site preparation, furniture, equipment, machinery and
other similar items necessary or convenient for the operation of a cultural
institution, whether or not such items are related to a particular facility or
structure financed under this chapter, including books, works of art or other
items for display or exhibition; and
(D) In the case of a
participating institution that is a health care institution, a structure or
structures suitable for its purposes, including hospital facilities, inpatient
and outpatient clinics, doctors’ offices, administration buildings, parking,
maintenance, storage or utility facilities, nursing care or assisted living facilities,
elderly care and housing facilities, including retirement communities, and
other structures or facilities related to any of the structures required or
used for the operation of the health care institution, including other
facilities or structures essential or convenient for the orderly provision of
such health care. It shall also include landscaping, site preparation,
furniture, equipment and machinery and other similar items necessary or
convenient for the particular health care facility or structure in the manner
for which its use is intended and shall further include any working capital,
furnishings, equipment, machinery and other similar items necessary or
convenient for the provision of health care, whether or not such items are
related to a particular facility or structure financed under this chapter,
including borrowings needed to alleviate interim cash flow deficits of a health
care institution.
(b) “Project” also
includes any combination of one or more of the projects undertaken jointly by
one or more participating institutions with each other or with other parties.
(c) “Project” does not
include any facility used or to be used for sectarian instruction or as a place
of religious worship or any facility which is used or to be used primarily in
connection with any part of the program of a school or department of divinity
for any religious denomination.
(13) “School for the
handicapped” means a public or nonprofit primary, secondary or post-secondary
school within this state which serves students at least 70 percent of whom are
handicapped as determined by one or more appropriate education, rehabilitation,
medical or mental health authorities; is accredited by a recognized accrediting
body; and is determined by the authority to be a major resource of benefit to
the handicapped. “School for the handicapped” does not mean any school or any
institution primarily engaged in religious or sectarian activities.
SECTION 114. ORS 289.200 is amended to read:
289.200. (1) If the State Treasurer determines that revenue bonds should
be issued:
(a) The State Treasurer
may authorize and issue in the name of the State of Oregon revenue bonds
secured by revenues from eligible projects to finance or refinance in whole or
part the cost of acquisition, purchase, construction, reconstruction,
installations improvement, betterment or extension of projects. The bonds shall
be identified by project and issued in the manner prescribed by ORS [286.010, 286.020 and 286.105 to 286.135, and
refunding bonds may be issued to refinance such revenue bonds] chapter
286.
(b) The State Treasurer
shall designate the [underwriter,]
trustee, financial advisor and bond counsel, if any, and enter into
appropriate agreements with each to carry out the provisions of this chapter. An
agreement with bond counsel designated by the State Treasurer under this
section is subject to the provisions related to services provided by bond
counsel under [ORS 288.523, and the
appointment must be approved by the Attorney General as required by ORS 288.523]
section 20 of this 2007 Act. The powers conferred on a related agency under ORS
chapter 286 do not apply to the
(2) Any trustee
designated by the State Treasurer to carry out all or part of the powers
specified in ORS 289.110 must agree to furnish financial statements and audit
reports for each bond issue.
(3) The State Treasurer
shall be the applicable elected representative for purposes of approving the
issuance of revenue bonds under this chapter as to the extent such approval is
required under section 147(f) of the Internal Revenue Code [of 1986, as amended, or any successor
provision thereto].
(4) The State Treasurer
shall collect data from the [Oregon
Facilities] authority regarding the amount and nature of bonded
indebtedness in
SECTION 115. ORS 289.205 is amended to read:
289.205. [(1) In determining
whether to issue revenue bonds under this chapter, the State Treasurer shall
consider:]
[(a) The bond market for the types of bonds
proposed for issuance.]
[(b) The terms and conditions of the proposed
issue.]
[(c) Such other relevant factors as the State Treasurer considers
necessary to protect the financial integrity of the state.]
[(2) Bonds authorized under this chapter shall be issued in accordance
with the provisions of ORS 288.515 to 288.550.]
[(3)] Reasonable administrative expenses of the State Treasurer shall
be charged against bond proceeds or project revenues.
SECTION 116. ORS 293.824 is amended to read:
293.824. (1) As used in this section:
(a) “Council” means the
Oregon Investment Council.
[(b) “Governmental unit” has the meaning given the term under ORS
288.150.]
[(c)] (b) “Investor” means an entity which deposits proceeds
with the State Treasurer for investment in a pool.
[(d)] (c) “Pool” means a fund or account established by the
State Treasurer for the investment of proceeds for one or more investors,
pursuant to this section.
(d) “Public body” has
the meaning given that term in section 42 of this 2007 Act.
(e) “Proceeds” means
funds obtained from the sale of tax-exempt obligations, and other funds which
secure, or are held to pay debt service on, tax-exempt obligations.
(f) “Tax-exempt
obligations” means bonds, notes, certificates or other obligations, the
interest on which is excluded from gross income under the United States
Internal Revenue Code.
(2) In addition to the
other powers granted to the State Treasurer, the State Treasurer may create one
or more pools for the investment of proceeds. The pools shall be separate and
distinct from the General Fund. Amounts in a pool shall be invested under the
standards for investment of state funds which are provided in ORS 293.701 to
293.820. However, the investment objective for the pools shall be to make the
amounts therein as productive to the investor as is administratively
reasonable, taking into account restrictions imposed by the
(3) The State Treasurer
or the council may contract for trust, investment management, legal,
accounting, financial advisory and other services with respect to the funds
invested in a pool. Costs of the services may be paid from earnings on proceeds
invested in a pool, from fees charged to investors or from any other legally
available funds. The State Treasurer may charge investors fees for deposit or
withdrawal of amounts from a pool. The fees shall not exceed the State
Treasurer’s reasonable estimate of the costs of creating and operating the
pool.
(4) The State Treasurer
shall establish policies and procedures for the allocation of pool expenses,
earnings and losses among investors in a pool, and for the deposit and
withdrawal of amounts in a pool. Net earnings on amounts in pools shall be
distributed among investors in accordance with the policies and procedures
established by the State Treasurer.
(5) The State of
SECTION 117. ORS 294.052 is amended to read:
294.052. (1) As used in this section:
(a) “Bond” has the
meaning given that term in [ORS 288.605]
section 42 of this 2007 Act.
[(b) “Certificate of participation” has the meaning given that term in
ORS 288.605.]
[(c)] (b) “Municipality” means a unit of local government
within
(2) Notwithstanding ORS
294.135 or 294.145 or any other law or charter provision, a municipality may
invest proceeds of bonds [or certificates
of participation] and amounts held in a bond [or certificate of participation] payment[,] reserve or proceeds fund or account
in float agreements, debt service deposit agreements, forward investment
agreements, guaranteed investment contracts or other investment agreements if
the agreements or contracts:
(a) Produce a guaranteed
rate of return;
(b) Are fully
collateralized by direct obligations of, or obligations guaranteed by, the
(c) Require that the
collateral be held by the municipality, an agent of the municipality or a
third-party safekeeping agent.
SECTION 118. ORS 294.326 is amended to read:
294.326. (1) Except as
provided in subsections (3) to (11) of this section, it is unlawful for any
municipal corporation to expend money or to certify to the assessor an ad
valorem tax rate or estimated amount of ad valorem taxes to be imposed in any
year unless the municipal corporation has complied with ORS 294.305 to 294.565.
(2) To the extent that
any of subsections (3) to (11) of this section apply
in a given case, the municipal corporation need not comply with ORS 294.305 to
294.565.
(3) Subsection (1) of
this section does not apply to the expenditure in the year of receipt of
grants, gifts, bequests or devises transferred to a municipal corporation in
trust for specific purposes or to other special purpose trust funds at the
disposal of municipal corporations. However, subsection (1) of this section does
apply to the expenditure of grants, gifts, bequests or devises transferred to a
municipal corporation for undesignated general purposes or to the expenditure
of grants, gifts, bequests or devises transferred to a municipal corporation in
trust for specific purposes which were received in a prior year. Expenditure of
grants, gifts, bequests and devises exempt from subsection (1) of this section
by this subsection is lawful only after enactment by the governing body of the
municipal corporation of appropriation ordinances or resolutions authorizing
the expenditure.
(4) Subsection (1) of
this section does not apply whenever the governing body of a municipal
corporation has declared the existence of an unforeseen occurrence or condition
which could not have been foreseen at the time of the preparation of the budget
for the current year or current budget period or could not have foreseen a
pressing necessity for the expenditure or has received a request for services
or facilities, the cost of which is supplied by a private individual,
corporation or company or by another governmental unit necessitating a greater
expenditure of public money for any specific purpose or purposes than the
amount budgeted in order to provide the services for which the governing body of
the municipal corporation was responsible. The governing body may make excess
expenditures for the specific purpose or purposes beyond the amount budgeted
and appropriated to the extent that maintenance, repair or self-insurance
reserves authorized by ORS 294.366 or nontax funds are available or may be made
available. The expenditures are lawful only after the enactment of appropriate
appropriation ordinances or resolutions authorizing the expenditures. The
ordinance or resolution must state the need for the expenditure, the purpose
for the expenditure and the amount appropriated.
(5) Subsection (1) of
this section does not apply to the expenditure during the current year or
current budget period of the proceeds of the sale of the following bonds [or other obligations], as defined in
section 42 of this 2007 Act, or to the expenditure during the current year
or current budget period of other funds to pay debt service on [the following] those bonds [or other obligations]:
(a) Bonds that are
issued under [the Uniform Revenue Bond
Act, ORS 288.805 to 288.945,] section 46 of this 2007 Act and for
which the referral period described in [ORS
288.815] section 46 of this 2007 Act ended after the preparation of
the budget of the current year or current budget period;
(b) Bonds [or other obligations] that were approved
by the electors during the current year or current budget period; or
(c) Bonds [or other obligations] issued during the
current year or current budget period to refund previously issued bonds or
obligations.
(6) Subsection (1) of
this section does not apply to:
(a) Expenditures of
funds received from the sale of conduit revenue bonds or other borrowings
issued for private business entities or nonprofit corporations by [cities, counties, county service districts,
port districts, special districts, the Port of Portland] public bodies,
as defined in section 42 of this 2007 Act, or the State of Oregon or to pay
debt service on the bonds;
(b) Expenditures of
funds that have been irrevocably placed in escrow for the purpose of defeasing
and paying bonds [or other borrowings];
(c) Expenditures of
assessments or other revenues to redeem bonds [or other obligations] that are payable from the assessments or
other revenues, when the assessments or other revenues are received as a result
of prepayments or other unforeseen circumstances; or
(d) Expenditures of
funds that are held as debt service reserves for bonds [or other borrowings] if the expenditures are made to:
(A) Pay debt service on
the bonds [or other borrowings];
(B) Redeem the bonds [or other borrowings]; or
(C) Fund an escrow or
trust account to defease or pay the bonds [or
other borrowings].
(7) Subsection (1) of
this section does not apply to expenditures of funds received from assessments
against benefited property for local improvements as defined in ORS 223.001 to
the extent that the cost of the improvements is to be paid by owners of
benefited property.
(8) Subsection (1) of
this section does not apply to the expenditure of funds accumulated to pay
deferred employee compensation.
(9) Subsection (1) of
this section does not apply to refunds or the interest on refunds granted by
counties under ORS 311.806.
(10) Subsection (1) of
this section does not apply to refunds received by a municipal corporation when
purchased items are returned after an expenditure has
been made. Expenditure of refunded amounts to which this subsection applies is
lawful only after the governing body of the municipal corporation has enacted,
after public hearing, appropriate appropriation ordinances or resolutions
authorizing the expenditure.
(11) Subsection (1) of
this section does not apply to a newly formed municipal corporation during the
fiscal year in which it was formed. If a new municipal corporation is formed between
March 1 and June 30, subsection (1) of this section does not apply to the
municipal corporation during the fiscal year immediately following the fiscal
year in which it was formed.
SECTION 119. ORS 294.386 is amended to read:
294.386. Each municipal
corporation shall prepare a financial summary. The financial summary shall
include:
(1) A summary statement
by funds showing the estimate of budget resources and the estimate of
expenditures;
(2) A classified
statement of outstanding indebtedness, but not including indebtedness that has
been defeased [and is no longer
considered to be outstanding] as provided in [ORS 288.675] section 64 of this 2007 Act;
(3) A classified
statement of all indebtedness authorized but not incurred; and
(4) A summary statement
of the estimate of ad valorem property taxes, stated
in dollars and cents and also stated as an estimated tax rate per thousand
dollars of assessed value.
SECTION 120. ORS 294.443 is amended to read:
294.443. In the exercise
of the authority granted by ORS [288.165,]
328.565 and 341.715 and section 47 of this 2007 Act, specific provision
for interest must be contained in duly adopted budgets. However, reporting of
anticipated loan proceeds and related principal repayments within a particular
fiscal year or budget period may be accomplished in narrative form or by
footnoted schedules to the duly adopted budget and need not be included as a
budgetary resource or requirement. Such narrative or footnoted disclosure must
indicate that principal repayments are a liability of the applicable fund from
which they are made.
SECTION 121. ORS 294.483 is amended to read:
294.483. [(1) A municipal corporation that has
outstanding limited tax bonds, as defined in ORS 288.150, that were issued
pursuant to ORS 287.049 shall budget and appropriate, subject to any applicable
covenants or agreements that limit payment of certain obligations to particular
sources of funds, amounts sufficient to pay, in each succeeding fiscal year or
budget period, debt service on the bonds. However, this section does not
require the municipal corporation to adopt a supplemental budget to pay the
principal and interest coming due on limited tax bonds in the fiscal year or
budget period in which the bonds are authorized and issued.]
[(2)] A municipal corporation is not
required to adopt a supplemental budget to:
[(a)] (1) Expend during the current
year or current budget period proceeds of the sale of the following bonds or
other obligations:
[(A)] (a) Bonds that are issued under [the Uniform Revenue Bond Act, ORS 288.805 to 288.945,] section
46 of this 2007 Act and for which the referral period described in [ORS 288.815] section 46 of this 2007
Act ended after the preparation of the budget for the current year or
current budget period.
[(B)] (b) Bonds or other
obligations that were approved by the electors during the current year or
current budget period.
[(C)] (c) Bonds or other obligations issued during the
current year or current budget period to refund previously issued bonds or obligations.
[(b)] (2) Expend during the current year or current budget
period other funds to pay the principal and interest coming due on bonds or
other obligations listed in [paragraph
(a) of this] subsection (1) of this section.
[(c)] (3) Expend assessments or other revenues to redeem
bonds or other obligations that are payable from the assessments or other
revenues, when the assessments or other revenues are received as a result of
prepayments or other unforeseen circumstances.
SECTION 122. ORS 294.820 is amended to read:
294.820. If the State
Treasurer and the Oregon Investment Council terminate the operation of all
investment pools created under ORS 293.824, [governmental units, as defined in ORS 288.150,] public bodies,
as defined in section 42 of this 2007 Act, may establish by written
agreement under ORS chapter 190 one or more pools for the investment of
proceeds for the purposes identified in ORS 293.822. In establishing one or
more such pools, the participating [governmental
units] public bodies may exercise those powers conferred on the
State Treasurer and the Oregon Investment Council by ORS 293.824.
SECTION 122a. ORS 294.840 is amended to read:
294.840. Subject to the
objective set forth in ORS 294.831 and the standards set forth in ORS 294.835,
the Oregon Investment Council shall formulate policies for the investment and
reinvestment of moneys in the investment pool and the acquisition, retention,
management and disposition of investments of the investment pool. The council,
from time to time, shall review those policies and make changes therein as it
considers necessary or desirable. The council may formulate separate policies
for any funds from any single [governmental
unit] public body included in the investment pool.
SECTION 122b. ORS 294.870 is amended to read:
294.870. (1) The
investment officer shall keep, for each [governmental
unit] public body with funds in the investment pool, a separate
account, which shall record the individual amounts and the totals of all
investments of its moneys in the investment pool.
(2) The investment
officer shall report monthly to the local government official of a [governmental unit] public body
with funds in the investment pool the changes in its account made during the
preceding month for the investment pool. The investment officer shall also
furnish a financial report monthly to each participating governmental unit
investor in the local government investment pool. The financial report shall
include, but not be limited to, such comparative data for the preceding six
months operation of the investment pool as will provide a basis for analyzing
trends and comparing operating results and financial position. A monthly
statement shall be distributed within 30 days after the end of that month.
SECTION 122c. ORS 294.880 is amended to read:
294.880. An examination
and audit of the investment pool shall be made separately from the audit of the
treasurer for submission to the Oregon Investment Council, local [governmental units which] public
bodies that are investors in the pool, the Legislative Assembly and the
board at least once a year and at other times as the council may require. An
audit report shall be submitted to the individuals and [units] public bodies specified within 60 days after the end
of the fiscal year or as soon as practical. The report shall include a
statement prepared by the State Treasurer of the investment rules governing
investments authorized by the council.
SECTION 123. ORS 295.005 is amended to read:
295.005. As used in ORS
295.005 to 295.165, unless the context requires otherwise:
(1) “Certificate of
participation” or “certificate” means a nonnegotiable document issued by a pool
manager to a public official.
(2) “Custodian bank” or “custodian”
means the following institutions designated by the depository bank for its own
account:
(a) The Federal Reserve
Bank designated to serve this state, or any branch of that bank;
(b) The Federal Home
Loan Bank designated to serve this state, or any branch of that bank;
(c) Any insured institution
or trust company, as those terms are defined in ORS 706.008, that is authorized
to accept deposits or transact trust business in this state and that complies
with ORS 295.008; and
(d) The fiscal agency of
the State of
(3) “Custodian’s receipt”
or “receipt” means a document issued by a custodian bank to a pool manager
describing the securities deposited with it by a depository bank to secure
public fund deposits.
(4) “Depository bank” or
“depository” means an insured institution or trust company, as those terms are
defined in ORS 706.008, a credit union, as defined in ORS 723.006, the shares
and deposits of which are insured by the National Credit Union Share Insurance
Fund, or a federal credit union, if the institution, trust company or credit
union:
(a) Maintains a head
office or a branch in this state in the capacity of an insured institution,
trust company, credit union or federal credit union; and
(b) In the case of an
insured institution or trust company, complies with ORS 295.008.
(5) “Pool manager”
means:
(a) The State Treasurer;
(b) Any insured
institution or trust company, as those terms are defined in ORS 706.008, a credit
union, as defined in ORS 723.006, the shares and deposits of which are insured
by the National Credit Union Share Insurance Fund, or a federal credit union,
if the institution, trust company or credit union:
(A) Is authorized to
accept deposits or transact trust business in this state; and
(B) In the case of an
insured institution or trust company, complies with ORS 295.008;
(c) The Federal Reserve
Bank designated to serve this state, or any branch of that bank; or
(d) The Federal Home
Loan Bank designated to serve this state, or any branch of that bank.
(6) “Public funds” or “funds” means funds under the control or in the custody of a
public official by virtue of office.
(7) “Security” or “securities”
means:
(a) Obligations of the
(b) Obligations of the
International Bank for Reconstruction and Development;
(c) Bonds of any state
of the
(A) That are rated in
one of the four highest grades by a recognized investment service organization
that has been engaged regularly and continuously for a period of not less than
10 years in rating state and municipal bonds; or
(B) Having once been so
rated are ruled to be eligible securities for the
purposes of ORS 295.005 to 295.165, notwithstanding the loss of such rating;
(d) Bonds of any county,
city, school district, port district or other public body in the United States
payable from ad valorem taxes levied generally on substantially all property
within the issuing body and that meet the rating requirement or are ruled to be
eligible securities as provided in paragraph (c) of this subsection;
(e) Bonds of any county,
city, school district, port district or other public body issued pursuant to
the Constitution or statutes of the State of Oregon or the charter or
ordinances of any county or city within the State of Oregon, if the issuing
body has not been in default with respect to the payment of principal or
interest on any of its bonds within the preceding 10 years or during the period
of its existence if that is less than 10 years;
(f) Bond anticipation
notes issued, sold or assumed by an authority under ORS 441.560;
(g) One-family to
four-family housing mortgage loan notes related to property situated in the
State of Oregon, which are owned by a depository bank, no payment on which is
more than 90 days past due, and which are eligible collateral for loans from
the Federal Reserve Bank of San Francisco under section 10(b) of the Federal
Reserve Act and regulations thereunder;
(h) Bonds, notes,
letters of credit or other securities or evidence of indebtedness constituting
the direct and general obligation of a federal home loan bank or Federal
Reserve bank;
(i) Debt obligations of
domestic corporations that are rated in one of the three highest grades by a
recognized investment service organization that has been engaged regularly and
continuously for a period of not less than 10 years in rating corporate debt
obligations;
(j) Collateralized
mortgage obligations and real estate mortgage investment conduits that are
rated in one of the two highest grades by a recognized investment service
organization that has been engaged regularly and continuously for a period of
not less than 10 years in rating corporate debt obligations; and
(k) One-family to
four-family housing mortgages that have been secured by means of a guarantee as
to full repayment of principal and interest by an agency of the United States
Government, including the Government National Mortgage Association, the Federal
National Mortgage Association and the Federal Home Loan Mortgage Corporation.
(8) “Public official”
means each officer or employee of this state or any agency, political
subdivision or public or municipal corporation thereof
who by law is made the custodian of or has control of any public funds.
(9) “Value” means the
current market value of securities.
SECTION 124. ORS 295.011 is amended to read:
295.011. (1) The following public funds are not subject to the provisions
of ORS 295.005 to 295.165:
(a) Funds that are
deposited for the purpose of paying principal, interest or premium, if any, on
bonds, [like borrowings] as
defined in sections 2 and 42 of this 2007 Act, and related costs or
securing a borrowing related to an agreement for exchange of interest rates
entered into under [ORS 287.025] section
10 or 53 of this 2007 Act.
(b) Funds that are
invested in authorized investments under provisions of law other than ORS
295.005 to 295.165. Funds invested under ORS 293.701 to 293.820 are invested in
authorized investments for purposes of this subsection from the time the funds
are transferred by the State Treasurer to a third party under the terms of a
contract for investment or administration of the funds that requires such a
transfer until the time the funds are returned to the treasurer or paid to
another party under the terms of the contract.
(c) Negotiable
certificates of deposit purchased by the State Treasurer under ORS 293.736 or
by an investment manager under ORS 293.741.
(2) Notwithstanding
subsection (1) of this section, funds deposited by a custodial officer under
ORS 294.035 (3)(d) are subject to the provisions of
ORS 295.005 to 295.165.
SECTION 125. ORS 310.140 is amended to read:
310.140. The Legislative
Assembly finds that section 11b, Article XI of the Oregon Constitution, was
drafted by citizens and placed before the voters of the State of
(1) “Actual cost” means
all direct or indirect costs incurred by a government unit in order to deliver
goods or services or to undertake a capital construction project. The “actual
cost” of providing goods or services to a property or property owner includes
the average cost or an allocated portion of the total amount of the actual cost
of making a good or service available to the property or property owner,
whether stated as a minimum, fixed or variable amount. “Actual cost” includes,
but is not limited to, the costs of labor, materials, supplies, equipment
rental, property acquisition, permits, engineering, financing, reasonable
program delinquencies, return on investment, required fees, insurance,
administration, accounting, depreciation, amortization, operation, maintenance,
repair or replacement and debt service, including debt service payments or
payments into reserve accounts for debt service and payment of amounts
necessary to meet debt service coverage requirements.
(2) “Assessment for
local improvement” means any tax, fee, charge or assessment that does not
exceed the actual cost incurred by a unit of government for design,
construction and financing of a local improvement.
(3) “Bonded indebtedness”
means any formally executed written agreement representing a promise by a unit
of government to pay to another a specified sum of money, at a specified date
or dates at least one year in the future.
(4) “Capital
construction”:
(a) For bonded
indebtedness issued prior to December 5, 1996, and for the proceeds of any
bonded indebtedness approved by electors prior to December 5, 1996, that were
spent or contractually obligated to be spent prior to June 20, 1997, means the
construction, modification, replacement, repair, remodeling or renovation of a
structure, or addition to a structure, that is expected to have a useful life
of more than one year, and includes, but is not limited to:
(A) Acquisition of land,
or a legal interest in land, in conjunction with the capital construction of a
structure.
(B) Acquisition,
installation of machinery or equipment, furnishings or materials that will
become an integral part of a structure.
(C) Activities related
to the capital construction, including planning, design, authorizing, issuing,
carrying or repaying interim or permanent financing, research, land use and
environmental impact studies, acquisition of permits or licenses or other
services connected with the construction.
(D) Acquisition of
existing structures, or legal interests in structures, in conjunction with the
capital construction.
(b) For bonded
indebtedness issued on or after December 5, 1996, except for the proceeds of
any bonded indebtedness approved by electors prior to December 5, 1996, that
were spent or contractually obligated to be spent before June 20, 1997, has the
meaning given that term in paragraph (a) of this subsection, except that “capital
construction”:
(A) Includes public
safety and law enforcement vehicles with a projected useful life of five years
or more; and
(B) Does not include:
(i) Maintenance and
repairs, the need for which could be reasonably anticipated;
(ii) Supplies and
equipment that are not intrinsic to the structure; or
(iii) Furnishings,
unless the furnishings are acquired in connection with the acquisition,
construction, remodeling or renovation of a structure, or the repair of a
structure that is required because of damage or destruction of the structure.
(5) “Capital
improvements”:
(a) For bonded
indebtedness issued prior to December 5, 1996, and for the proceeds of any
bonded indebtedness approved by electors before December 5, 1996, that were
spent or contractually obligated to be spent before June 20, 1997, means land,
structures, facilities, personal property that is functionally related and
subordinate to real property, [as
that term is defined in ORS 288.805,] machinery, equipment or furnishings
having a useful life longer than one year.
(b) For bonded
indebtedness issued on or after December 5, 1996, except for the proceeds of
any bonded indebtedness approved by electors prior to December 5, 1996, that
were spent or contractually obligated to be spent before June 20, 1997, has the
meaning given that term in paragraph (a) of this subsection, except that “capital
improvements”:
(A) Includes public
safety and law enforcement vehicles with a projected useful life of five years
or more; and
(B) Does not include:
(i) Maintenance and
repairs, the need for which could be reasonably anticipated;
(ii) Supplies and
equipment that are not intrinsic to the structure; or
(iii) Furnishings,
unless the furnishings are acquired in connection with the acquisition,
construction, remodeling or renovation of a structure, or the repair of a
structure that is required because of damage or destruction of the structure.
(6) “Direct consequence
of ownership” means that the obligation of the owner of property to pay a tax
arises solely because that person is the owner of the property, and the
obligation to pay the tax arises as an immediate and necessary result of that
ownership without respect to any other intervening transaction, condition or
event.
(7)(a) “Exempt bonded
indebtedness” means:
(A) Bonded indebtedness
authorized by a specific provision of the Oregon Constitution;
(B) Bonded indebtedness
incurred or to be incurred for capital construction or capital improvements
that was issued as a general obligation of the issuing governmental unit on or
before November 6, 1990;
(C) Bonded indebtedness
incurred or to be incurred for capital construction or capital improvements
that was issued as a general obligation of the issuing governmental unit after
November 6, 1990, with the approval of the electors of the issuing governmental
unit; or
(D) Bonded indebtedness
incurred or to be incurred for capital construction or capital improvements, if
the issuance of the bonds is approved by voters on or after December 5, 1996,
in an election that is in compliance with the voter participation requirements
of section 11 (8), Article XI of the Oregon Constitution.
(b) “Exempt bonded
indebtedness” includes bonded indebtedness issued to refund or refinance any
bonded indebtedness described in paragraph (a) of this subsection.
(8)(a) “Incurred charge”
means a charge imposed by a unit of government on property or upon a property
owner that does not exceed the actual cost of providing goods or services and
that can be controlled or avoided by the property owner because:
(A) The charge is based
on the quantity of the goods or services used, and the owner has direct control
over the quantity;
(B) The goods or
services are provided only on the specific request of the property owner; or
(C) The goods or
services are provided by the government unit only after the individual property
owner has failed to meet routine obligations of ownership of the affected
property, and such action is deemed necessary by an appropriate government unit
to enforce regulations pertaining to health or safety.
(b) For purposes of this
subsection, an owner of property may control or avoid an incurred charge if the
owner is capable of taking action to affect the amount of a charge that is or
will be imposed or to avoid imposition of a charge even if the owner must incur
expense in so doing.
(c) For purposes of
paragraph (a)(A) of this subsection, an owner of property has direct control
over the quantity of goods or services if the owner of property has the
ability, whether or not that ability is exercised, to determine the quantity of
goods or services provided or to be provided.
(9)(a) “Local improvement”
means a capital construction project, or part thereof, undertaken by a local
government, pursuant to ORS 223.387 to 223.399, or pursuant to a local
ordinance or resolution prescribing the procedure to be followed in making
local assessments for benefits from a local improvement upon the lots that have
been benefited by all or a part of the improvement:
(A) That provides a
special benefit only to specific properties or rectifies a problem caused by
specific properties;
(B) The costs of which
are assessed against those properties in a single assessment upon the
completion of the project; and
(C) For which the
property owner may elect to make payment of the assessment plus appropriate
interest over a period of at least 10 years.
(b) For purposes of
paragraph (a) of this subsection, the status of a capital construction project
as a local improvement is not affected by the accrual of a general benefit to
property other than the property receiving the special benefit.
(10) “Maintenance and
repairs, the need for which could be reasonably anticipated”:
(a) Means activities,
the type of which may be deducted as an expense under the provisions of the
federal Internal Revenue Code, as amended and in effect on December 31, 2004,
that keep the property in ordinarily efficient operating condition and that do
not add materially to the value of the property nor appreciably prolong the
life of the property;
(b) Does not include
maintenance and repair of property that is required by damage, destruction or
defect in design, or that was otherwise not reasonably expected at the time the
property was constructed or acquired, or the addition of material that is in
the nature of the replacement of property and that arrests the deterioration or
appreciably prolongs the useful life of the property; and
(c) Does not include
street and highway construction, overlay and reconstruction.
(11) “Projected useful
life” means the useful life, as reasonably estimated by the unit of government
undertaking the capital construction or capital improvement project, beginning
with the date the property was acquired, constructed or reconstructed and based
on the property’s condition at the time the property was acquired, constructed
or reconstructed.
(12) “Routine
obligations of ownership” means a standard of operation, maintenance, use or
care of property established by law, or if established by custom or common law,
a standard that is reasonable for the type of property affected.
(13) “Single assessment”
means the complete assessment process, including preassessment, assessment or
reassessment, for any local improvement authorized by ORS 223.387 to 223.399,
or a local ordinance or resolution that provides the procedure to be followed
in making local assessments for benefits from a local improvement upon lots
that have been benefited by all or part of the improvement.
(14) “Special benefit
only to specific properties” shall have the same meaning as “special and
peculiar benefit” as that term is used in ORS 223.389.
(15) “Specific request”
means:
(a) An affirmative act
by a property owner to seek or obtain delivery of goods or services;
(b) An affirmative act
by a property owner, the legal consequence of which is to cause the delivery of
goods or services to the property owner; or
(c) Failure of an owner
of property to change a request for goods or services made by a prior owner of
the property.
(16) “Structure” means
any temporary or permanent building or improvement to real property of any kind
that is constructed on or attached to real property, whether above, on or
beneath the surface.
(17) “Supplies and
equipment intrinsic to a structure” means the supplies and equipment that are
necessary to permit a structure to perform the functions for which the
structure was constructed, or that will, upon installation, constitute fixtures
considered to be part of the real property that is comprised, in whole or part,
of the structure and land supporting the structure.
(18) “Tax on property”
means any tax, fee, charge or assessment imposed by any government unit upon
property or upon a property owner as a direct consequence of ownership of that
property, but does not include incurred charges or assessments for local
improvements. As used in this subsection, “property” means real or tangible personal
property, and intangible property that is part of a unit of real or tangible
personal property to the extent that such intangible property is subject to a
tax on property.
SECTION 126. ORS 316.056 is amended to read:
316.056. In addition to
the modifications to federal taxable income contained in this chapter, there
shall be subtracted from federal taxable income the interest or dividends on
obligations of [counties, cities,
districts, ports or other public or municipal corporations or political subdivisions
of this state] the State of Oregon or a public body, as defined in
section 42 of this 2007 Act, to the extent includable in gross income for
federal income tax purposes. However, the amount subtracted under this section
shall be reduced by any interest on indebtedness incurred to carry the
obligations or securities described in this section, and by any expenses
incurred in the production of interest or dividend income described in this
section.
SECTION 127. ORS 327.705 is amended to read:
327.705. The Legislative
Assembly declares that the purpose of ORS 327.700 to 327.711 is to authorize
lottery bonds for state education projects. The lottery bonds authorized by ORS
327.700 to 327.711 shall be issued pursuant to ORS 286.560 to 286.580 [and 348.716]. The obligation of the
State of Oregon with respect to the lottery bonds and with respect to any grant
agreement or other commitment authorized by ORS 327.700 to 327.711, 327.731,
348.696 and 777.277 shall at all times be restricted to the availability of
unobligated net lottery proceeds, proceeds of lottery bonds and any other
amounts specifically committed by ORS 286.560 to 286.580 [and 348.716]. Neither the faith and credit
of the State of
SECTION 128. ORS 328.230 is amended to read:
328.230. If the electors
of the district approve the contracting of bonded indebtedness, the [board of directors, without further vote of
the electors, shall issue negotiable coupon bonds of the district, at such time
or times as the board directs] bonds shall be issued as prescribed in
ORS chapter 287.
SECTION 129. ORS 328.280 is amended to read:
328.280. (1) Whenever
any school district has any outstanding negotiable interest-bearing warrant
indebtedness or bonded indebtedness incurred in building or furnishing any
schoolhouse, or for the purchase of any schoolhouse site, or in refunding
bonded indebtedness, or in funding warrant indebtedness, which is due or
subject at the option of the school district to be paid or redeemed, the school
district, by and through its district school board, may:
(a) Issue and exchange,
for any such indebtedness, its bonds bearing interest at a rate determined by
the district school board; or
(b) Issue and sell such
bonds and apply the proceeds of such sale in payment of the indebtedness for
the payment of which the refunding bonds are proposed to be issued.
(2) Refunding bonds
issued under subsection (1) of this section shall in all respects conform to,
and be governed, as to their issue, by the provisions of [ORS 287.008, 328.210 and 328.230 to 328.250] ORS chapter 287.
(3) [The refunding of indebtedness and issuing of
bonds for such purpose shall not require an election, but may be done by
resolution of the district school board at any legally called board meeting.]
The debt limitations imposed by law shall not affect the right of any school
district to issue refunding bonds under authority of this section. The validity
of any bonds so issued, or of the indebtedness thereby refunded, shall not
thereafter be open to contest by the school district or by any person for any
reason [whatever].
SECTION 130. ORS 328.295 is amended to read:
328.295. All school
bonds, including funding and refunding bonds, notes and negotiable
interest-bearing warrants which have been specifically authorized by vote of
the electors, shall be [advertised for
sale and sold in the manner prescribed in ORS 287.014 to 287.022] issued
as prescribed in ORS chapter 287.
SECTION 131. ORS 328.321 is amended to read:
328.321. As used in ORS
328.321 to 328.356:
(1) “Common School Fund”
means the state school fund described in section 2, Article VIII, Oregon
Constitution.
(2) “General obligation
bond” has the meaning given that term in [ORS
288.150] section 42 of this 2007 Act.
(3) “Paying agent” means
the corporate paying agent selected by the school district board for a school
bond issue who is:
(a) Duly qualified; and
(b) Acceptable to the
State Treasurer.
(4) “School bond” means
any general obligation bond issued by a school district.
(5) “School district”
means a common or union high school district, an education service district or
a community college district.
(6) “State bonds” means
those general obligation bonds issued by the State of
(7) “State guaranty”
means the pledge of the full faith and credit and taxing power of the State of
Oregon to guarantee payment of eligible school bonds as set forth in ORS
328.321 to 328.356.
SECTION 132. ORS 328.351 is amended to read:
328.351. (1) If, at the
time the state is required to make a debt service payment under the state
guaranty on behalf of a school district, sufficient moneys of the state are not
on hand and available for that purpose, the State Treasurer may, singly or in
any combination:
(a) Obtain from the
Common School Fund or from any other state funds that qualify to make a loan
under ORS 293.205 to 293.225, if the loan would satisfy the requirements of ORS
293.205 to 293.225, a loan sufficient to make the required payment.
(b) Borrow money, if
economical and convenient, as [authorized
by ORS 288.165] provided in section 11 of this 2007 Act.
(c) Issue state bonds as
provided in subsection (2) of this section.
(d) With the approval of
the Legislative Assembly, or the Emergency Board if emergency funds are
lawfully available for making the required payment in the interim between
sessions of the Legislative Assembly, pay moneys from the General Fund or any
other funds lawfully available for the purpose or from emergency funds amounts
sufficient to make the required payment.
(2) The State Treasurer
may issue state bonds to meet the state guaranty obligations under ORS 328.321
to 328.356, pursuant to Article XI-K of the Oregon Constitution. The issuance
of [such] state bonds [shall be] is at the determination
of the State Treasurer and is exempt from [ORS
286.505 to 286.545] section 9 of this 2007 Act.
(3) Before issuing or
selling any state bonds, the State Treasurer shall prepare a written plan of
financing that shall provide for:
(a) The terms and
conditions under which the state bonds will be issued,
sold and delivered, in accordance with any applicable provisions of ORS [chapters 286 and 288] chapter 286;
(b) The taxes or
revenues to be anticipated;
(c) The maximum amount
of [such] state bonds that may be
outstanding at any one time under the plan of financing;
(d) The sources of
payment of the state bonds;
(e) The rate or rates of
interest, if any, on the state bonds or a method, formula or index under which
the interest rate or rates on the state bonds may be determined during the time
the state bonds are outstanding; and
(f) Any other details
relating to the issuance, sale and delivery of the state bonds, as may be
required by the applicable provisions of ORS [chapters 286 and 288] chapter 286. For purposes of ORS [chapters 286 and 288] chapter 286,
the office of the State Treasurer [shall
be deemed] is the [relevant
state] related agency authorizing the issuance of bonds and for
whose benefit the bonds are issued.
(4) In identifying the
taxes or revenues to be anticipated and the sources of payment of the state
bonds in the financing plan, the State Treasurer may include:
(a) The intercepted
revenues authorized by ORS 328.346; or
(b) Any other source of
repayment or lawfully available funds and any combination of this paragraph and
paragraph (a) of this subsection.
(5) The State Treasurer
may include in the plan of financing the terms and conditions of arrangements
entered into by the State Treasurer on behalf of the state with financial and
other institutions for letters of credit, standby letters of credit,
reimbursement agreements and remarketing, indexing and tender agent agreements
to secure the state bonds, including payment from any legally available source
of fees, charges or other amounts coming due under the agreements entered into
by the State Treasurer.
(6)(a) When issuing the
state bonds, the State Treasurer [shall
establish the interest, form, manner of execution, payment, manner of sale,
prices at, above or below the face value and all details of issuance of the
state bonds in accordance with any applicable provisions of ORS chapters 286
and 288] may exercise the powers granted by ORS chapter 286.
(b) Each state bond
shall recite that it is a valid obligation of the state and that the full
faith, credit and resources of the state are pledged for the payment of the
principal of and interest on the state bond from the taxes or revenues
identified in accordance with its terms and the Oregon Constitution and other
laws of this state.
(7) Upon the completion
of any sale of the state bonds, the State Treasurer shall credit the proceeds
of the sale, other than accrued interest and amounts required to pay costs of
issuance of the state bonds, to the fund or account established by the State
Treasurer to be applied to the purpose for which the state bonds were issued.
SECTION 133. ORS 328.565 is amended to read:
328.565. (1) As used in this section, “qualified zone academy bond” has
the meaning given the term in [26 U.S.C.]
section 1397E of the Internal Revenue Code, as amended and in
effect on January 1, 2002.
(2) A district school
board may contract indebtedness as provided under [ORS 288.165] section 47 of this 2007 Act.
(3) A district school
board may issue qualified zone academy bonds or similar tax credit bonds authorized
by resolution of the district school board. Unless the bond issue has been
approved by electors under ORS 328.205 to 328.304, the district school board
must issue the bonds [as limited tax
bonds under ORS 288.155 or] as revenue bonds under [ORS 288.805 to 288.945] section 46 of this 2007 Act.
SECTION 134. ORS 341.616 is amended to read:
341.616. (1) The
district board shall ascertain and levy annually, in addition to all other
taxes, a direct ad valorem tax on all the taxable property within the territory
of a service area sufficient to pay promptly, when and as such payments become
due, the maturing interest and principal of all bonds outstanding for the
specific benefit of such service area that have been approved at an election
held pursuant to ORS 341.678 within such service area. The amount of the tax
may be increased by an amount sufficient to retire any bonds that may be
callable.
(2) Funds derived from a
tax levy within a service area specifically for the purpose of paying bonded
indebtedness shall be applied solely to the payment of the bonds for which such
taxes were levied and shall not be applied to the payment of any other
indebtedness of the district.
(3) Bonds authorized
pursuant to the terms [hereof] of
this section, and any bonds refunding such bonds, shall be [advertised and sold in accordance with the
procedures set forth in ORS 287.028 or 341.702, as determined by the district
board] issued as prescribed in ORS chapter 287.
SECTION 135. ORS 341.681 is amended to read:
341.681. [(1)] If the electors of the district
voting on the question of contracting bonded indebtedness approve the question,
the board of the district may issue [negotiable
coupon] bonds of the district.
[