Chapter 786
AN ACT
HB 3530
Relating to short-term borrowing; amending
ORS 288.165; and declaring an emergency.
Be It Enacted by the People of
the State of
SECTION 1. ORS 288.165 is amended to read:
288.165. (1) Subject to
any applicable limitations imposed by the Constitution or laws of the State of
Oregon or the charter, ordinance or resolution of a governmental unit, a
governmental unit or the State of Oregon, acting through the State Treasurer
pursuant to ORS 293.173, may borrow money by entering into a credit agreement,
or issuing notes, warrants, short-term promissory notes, commercial paper or
other obligations:
(a) In anticipation of
tax revenues or other income for purposes that include, but are not limited to,
the payment of current expenses;
(b) To provide interim
financing for capital assets to be undertaken by the governmental unit; or
(c) To refund
outstanding obligations.
(2) To secure
obligations authorized under this section, a governmental unit or the State
Treasurer, acting on behalf of the state, may:
(a) Pledge the
anticipated tax revenues or other income, the proceeds of any bonds or other
permanent financing, or any combination thereof;
(b) Segregate any
pledged funds in separate accounts that may be held by the governmental
unit, the State Treasurer or third parties;
(c) Enter into contracts
with third parties to obtain standby lines of credit or other financial
commitments designated to provide additional security for obligations
authorized by this section;
(d) Establish any
reserves deemed necessary for the payment of the obligations; and
(e) Adopt resolutions
and enter into agreements containing covenants and provisions for protection
and security of the owners of obligations, which shall constitute enforceable
contracts with such owners.
(3) Obligations
authorized by this section that are issued in anticipation of tax revenues or
other income, except grant income, and any obligations authorized by this
section that are issued to refund them may not be issued prior to the beginning
of, and shall mature not later than[,] the end of, the fiscal period
in which the governmental unit or the State Treasurer expects to receive the
tax revenues or other income. Obligations issued by a governmental unit or the
State Treasurer in anticipation of tax revenues or other income, except grant
income, may not be issued in an amount greater than 80 percent of the amount
budgeted to be received in the fiscal period in which the obligations are
issued.
(4) Obligations
authorized by this section that are issued in anticipation of grant income or
to provide interim financing for capital assets shall mature not later than
five years after the obligations are issued and may be redeemed beginning not
later than one year after the governmental unit or the State Treasurer expects
to receive the grant or the capital asset is projected to be completed.
(5) Notwithstanding
subsections (3) and (4) of this section:
(a) A school district,
education service district, community college district or community college
service district may issue obligations that are issued in anticipation of tax
revenues or other income to mature not later than 13 months after the date the
obligations were issued.
(b) A city that is
incorporated on or after January 1, 1990, [and
is within an urban growth boundary] may issue an obligation in anticipation
of tax revenues or other income prior to the beginning of the fiscal period in
which the city expects to receive the revenues or other income if the obligation:
(A) Matures not later
than 18 months after the obligation is issued; and
(B) Is issued in an
amount that does not exceed 80 percent of the amount of lawfully available
funds, as defined in ORS 288.162, that the
governmental unit reasonably expects to receive.
(6) Refunding
obligations issued pursuant to subsection (1)(c) of
this section shall mature not later than five years after the refunding
obligations are issued.
(7) The debt limitations
imposed by law or the charter of any governmental unit do not affect the right
of any governmental unit to issue obligations under authority of this section,
nor are any of the obligations to be taken into consideration in determining
the percentage or extent to which the governmental unit is indebted under the
debt limitation. Obligations issued to refund outstanding obligations are not
considered to be within any of such debt limitations.
(8) Except as provided
in this section, obligations authorized by this section may be in any form and
contain any terms, including provisions for redemption at the option of the
owner and provisions for the varying of interest rates in accordance with any
index, banker’s loan rate or other standard.
(9) The governing body
of an issuing governmental unit, in the ordinance or resolution authorizing the
issuance of obligations under this section, may delegate to any elected or
appointed official or employee of the governmental unit the authority to
determine maturity dates, principal amounts, redemption provisions, interest
rates or the method for determining a variable or adjustable interest rate,
denominations and other terms and conditions of such obligations that are not
appropriately determined at the time of enactment or adoption of the
authorizing ordinance or resolution, which delegated authority shall be
exercised subject to applicable requirements of law and such limitations and
criteria as may be set forth in such ordinance or resolution. Except to the
extent of any such delegation, the governmental unit or the State Treasurer
shall determine:
(a) The maximum
effective rate of interest the obligations shall bear;
(b) The manner of sale;
(c) The discount, if
any, the governmental unit may allow;
(d) The terms and
conditions by which the obligations may be redeemed prior to maturity;
(e) The maturities of
the obligations;
(f) The form and
denominations of the notes or other obligations; and
(g) All other terms and
conditions related to the sale of the obligations.
(10) The governmental
unit or the State Treasurer may contract with third parties to serve as
issuing, paying and authenticating agents for any obligations authorized by
this section.
(11) Obligations
authorized by this section may be sold at public or private sale upon such
terms as the governmental unit or the State Treasurer finds advantageous, with
such disclosure as the governmental unit or State Treasurer deems appropriate.
ORS 287.040 applies to obligations issued by governmental units under this
section.
(12) As used in this
section, “fiscal period” means:
(a) In the case of a
governmental unit, a fiscal year.
(b) In the case of the
State of
SECTION 2. This 2007 Act being necessary for the
immediate preservation of the public peace, health and safety, an emergency is
declared to exist, and this 2007 Act takes effect on its passage.
Approved by the Governor July 16, 2007
Filed in the office of Secretary of State July 17, 2007
Effective date July 16, 2007
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