74th OREGON LEGISLATIVE ASSEMBLY--2007 Regular Session
NOTE: Matter within { + braces and plus signs + } in an
amended section is new. Matter within { - braces and minus
signs - } is existing law to be omitted. New sections are within
{ + braces and plus signs + } .
LC 743
Senate Bill 98
Printed pursuant to Senate Interim Rule 213.28 by order of the
President of the Senate in conformance with presession filing
rules, indicating neither advocacy nor opposition on the part
of the President (at the request of Governor Theodore R.
Kulongoski for State Forester Marvin D. Brown)
SUMMARY
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure as
introduced.
Allows State Forester to acquire property for establishment of
working forests. Directs State Forester to manage property
acquired for working forests for long-term revenue to provide
student assistance to persons attending institutions in Oregon
University System.
Allows State Treasurer to issue working forests revenue bonds.
Establishes Working Forests Higher Education Fund.
Continuously appropriates moneys to State Treasurer for student
assistance program.
Establishes Working Forests Revenue Fund. Continuously
appropriates moneys to State Forester.
Establishes Working Forests Revenue Bond Fund. Continuously
appropriates moneys to State Treasurer.
Establishes Working Forests Revenue Bond Administrative Fund.
Continuously appropriates moneys to Oregon Department of
Administrative Services.
Declares emergency, effective on passage.
A BILL FOR AN ACT
Relating to working forests; appropriating money; and declaring
an emergency.
Whereas working forests, which are forests that retain the
capacity for long-term timber management in concert with other
forest values, are extremely important to the people of rural
Oregon, providing an economic base, a source of recreation, fish
and wildlife habitat and watershed protection that help sustain
people in rural communities and contribute to the quality of
life; and
Whereas changing economic and ownership patterns are causing
concerns that land currently owned by the forest industry may be
sold to individuals or organizations that have less interest in
managing the land for sustained timber production, resulting in
conversion of forestland to nonforest uses or reductions in the
productive capacity of the forests due to such factors as
parcelization, unsustainable reductions in growing stock to
service debt or purchase by landowners with less interest in
maintaining a working forest; and
Whereas forestry-related jobs are an important part of
community stability and quality of life in rural Oregon, and
timber supply from federal lands has significantly declined due
to changes in management policies; and
Whereas Oregon lacks a stable funding source for higher
education; and
Whereas the Oregon University System is in danger of losing the
best and brightest students to other states because of increasing
tuition rates for students at Oregon's public universities; and
Whereas the state's experience with the Elliott, Tillamook, Sun
Pass and other state forests shows that state-owned forestlands
are a good investment that both maintains working forests and
produces funding for schools; and
Whereas in areas with high timber production capacity and land
values consistent with that productive capacity, state ownership
can produce both a strong financial return and other important
social and environmental benefits; and
Whereas as public lands, working forests are capable of
providing an increased level of wildlife habitat and accessible
recreation opportunities, as well as sustained timber volumes;
now, therefore,
Be It Enacted by the People of the State of Oregon:
SECTION 1. { + Sections 2 to 11 of this 2007 Act are added to
and made a part of ORS chapter 530. + }
SECTION 2. { + Definitions. As used in sections 2 to 11 of
this 2007 Act, unless the context requires otherwise:
(1) 'Appropriated funds' means any moneys, other than working
forests net revenues, that are specifically appropriated or
otherwise specifically made available by the Legislative Assembly
or the Emergency Board for a biennium to pay principal, interest
and premium, if any, and to replenish reserves established as
additional security, for working forests revenue bonds pursuant
to the authority granted in section 10 of this 2007 Act.
(2) 'Bond-related costs' means:
(a) The costs and expenses of issuing, administering and
maintaining working forests revenue bonds and the working forests
revenue bond program, including but not limited to paying or
redeeming working forests revenue bonds, paying amounts due in
connection with credit enhancement devices or any instruments
authorized by section 10 of this 2007 Act 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 working
forests revenue bonds or the working forests revenue bond
program;
(b) The costs of funding any working forests revenue bond
reserves;
(c) Capitalized interest for working forests revenue bonds;
(d) Rebates or penalties due to the United States in connection
with working forests revenue bonds; and
(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
working forests revenue bonds or maintaining the working forests
revenue bond program.
(3) 'Refunding working forests revenue bonds' means any bonds
issued for the purpose of refunding any working forests revenue
bonds.
(4) 'Working forests' means real property, or interests
therein, managed primarily for timber production to produce
revenue over the long term for the benefit of higher education in
this state.
(5) 'Working forests net revenues' means any working forests
revenues remaining in the Working Forests Revenue Fund after
payment of the amounts described in section 6 (2) and (3) of this
2007 Act.
(6) 'Working forests revenue bond program' means the financing
program authorized by sections 2 to 11 of this 2007 Act.
(7) 'Working forests revenue bonds' means the revenue bonds
authorized under section 10 of this 2007 Act.
(8) 'Working forests revenues' means all proceeds generated
from the sale of timber and forest products and any other
revenues generated from any working forests acquired pursuant to
sections 2 to 11 of this 2007 Act, including but not limited to
the sale or lease of conservation easements, carbon credits,
permits and licenses and revenues generated in any other manner
not inconsistent with the purposes of sections 2 to 11 of this
2007 Act. + }
SECTION 3. { + Acquisition of working forests. The State
Forester may acquire, by purchase, exchange, gift, lease or
otherwise, real property or any interests therein to serve as
working forests for the purposes set forth in sections 2 to 11 of
this 2007 Act. For the purposes of this section, the State
Forester may receive and disburse gifts, grants, bequests and
endowments. Except as otherwise provided for the sale of forest
products, the State Forester shall acquire and manage working
forests under the authority and direction of the State Board of
Forestry. + }
SECTION 4. { + Management of working forests. (1) The State
Forester shall manage working forests acquired under section 3 of
this 2007 Act to generate long-term working forests net revenues
for the Working Forests Higher Education Fund. Working forests
revenues shall be generated by the sale of forest products, and
may be supplemented in any other manner not inconsistent with the
goal of a long-term revenue stream, including the sale or lease
of conservation easements, carbon credits, permits and licenses.
The State Forester may also manage working forests to provide
public services, including recreation, fish and wildlife habitat
and watershed protection consistent with the purposes of sections
2 to 11 of this 2007 Act.
(2) The State Forester may hold and manage working forests
alone or in cooperation with other entities.
(3) The State Forester may hold and manage working forests for
a reasonable period of time without generating revenue if
necessary to achieve longer term management objectives. However,
the State Forester shall sell property that cannot be managed to
achieve the purposes of sections 2 to 11 of this 2007 Act at fair
market value. The proceeds of such sales shall be deposited as
working forests revenues into the Working Forests Revenue
Fund. + }
SECTION 5. { + Working Forests Higher Education Fund. (1) The
Working Forests Higher Education Fund is established in the State
Treasury, separate and distinct from the General Fund. The State
Forester shall deposit working forests net revenues into the
Working Forests Higher Education Fund pursuant to section 6
(2)(b) of this 2007 Act at times and in amounts deemed
appropriate by the State Forester to fulfill the purposes of
sections 2 to 11 of this 2007 Act. The fund also may be credited
with other amounts, including but not limited to moneys
appropriated to the fund for that purpose, contract proceeds,
gifts, grants or donations from public and private sources and
returns on investments made from the fund. The provisions of ORS
293.140 and 293.751 do not apply to the fund. Moneys in the fund
may be invested as provided in ORS 293.701 to 293.820.
(2) The fund is continuously appropriated to the State
Treasurer for purposes specified in subsection (3) of this
section.
(3) The State Treasurer shall use the moneys in the fund to
provide student assistance to residents of this state who attend
institutions within the Oregon University System. The State
Treasurer may pay the expenses necessary to administer the
student assistance program from moneys in the fund. The State
Treasurer may adopt rules for the administration of this
subsection. + }
SECTION 6. { + Working Forests Revenue Fund. (1) The Working
Forests Revenue Fund is established in the State Treasury,
separate and distinct from the General Fund. The provisions of
ORS 293.140 and 293.751 do not apply to the Working Forests
Revenue Fund. All working forests revenues and the net proceeds
from the sale of working forests revenue bonds, after the
deduction of bond-related costs, shall be deposited in the
Working Forests Revenue Fund. The State Forester may establish
accounts as may be necessary to conveniently administer the fund.
Moneys in the fund are continuously appropriated to the State
Forester.
(2)(a) The State Forester may distribute from moneys in the
fund, in the following priority, amounts needed at any time each
fiscal year:
(A) For the actual cost of management and fire protection of
the working forests for the fiscal year.
(B) For payments in lieu of property taxes to the counties in
which the working forests are located for the fiscal year.
(C) For transfer to the Working Forests Revenue Bond Fund as
provided in section 7 of this 2007 Act.
(D) For transfer to the Working Forests Higher Education Fund
and to the counties in which the working forests are located.
(b) If moneys are available for the purposes specified in
paragraph (a)(D) of this subsection, 90 percent of those
available moneys shall be transferred to the Working Forests
Higher Education Fund and 10 percent shall be transferred to the
counties in which the working forests are located. Each county
shall receive a share of the 10 percent that is proportionate to
the amount of working forests revenues generated in the fiscal
year by any working forests located in the county.
(3) The State Forester may use net proceeds of the sale of
working forests revenue bonds in the Working Forests Revenue Fund
only to finance the acquisition of working forests as provided in
section 3 of this 2007 Act. If net proceeds of the sale of
working forests revenue bonds remain unexpended after such
financing, the unexpended net proceeds shall be transferred to
the Working Forests Revenue Bond Fund. + }
SECTION 7. { + Working Forests Revenue Bond Fund. (1) The
Working Forests Revenue Bond Fund is established in the State
Treasury, separate and distinct from the General Fund. The State
Forester shall transfer any working forests net revenues
available under section 6 of this 2007 Act to the Working Forests
Revenue Bond Fund after receipt of the certification described in
section 9 of this 2007 Act. The State Treasurer may establish
reserves for working forests revenue bonds as provided in section
10 of this 2007 Act. The reserves shall be credited to an account
in the Working Forests Revenue Bond Fund designated by the State
Treasurer. The provisions of ORS 293.140 and 293.751 do not apply
to the fund. Moneys in the fund may be invested as provided in
ORS 293.701 to 293.820.
(2) The Working Forests Revenue Bond Fund is continuously
appropriated to the State Treasurer for the purposes of:
(a) Paying, when due, the principal of and the interest and
premium, if any, on outstanding working forests revenue bonds;
(b) Funding working forests revenue bond reserves; and
(c) Paying amounts due under credit enhancement devices or any
instruments authorized by section 10 of this 2007 Act. + }
SECTION 8. { + Working Forests Revenue Bond Administrative
Fund. The Working Forests Revenue Bond Administrative Fund is
established in the State Treasury, separate and distinct from the
General Fund. The Working Forests Revenue Bond Administrative
Fund is continuously appropriated to the Oregon Department of
Administrative Services only for payment of bond-related costs.
Amounts in the Working Forests Revenue Bond Administrative Fund
shall be disbursed upon the written request of the Director of
the Oregon Department of Administrative Services. The provisions
of ORS 293.140 and 293.751 do not apply to the fund. Moneys in
the fund may be invested as provided in ORS 293.701 to
293.820. + }
SECTION 9. { + Allocation of working forests net revenues for
working forests revenue bonds. (1) In each fiscal year in which
working forests revenue bonds are outstanding, the Oregon
Department of Administrative Services shall certify to the State
Forester the amounts needed for the fiscal year to:
(a) Pay the bond principal, interest or premium, if any,
scheduled to be paid for working forests revenue bonds in that
year;
(b) Fulfill any reserve requirements in connection with any
outstanding working forests revenue bonds;
(c) Restore the balance in any reserve account for working
forests revenue bonds to the level the state has covenanted to
maintain in the account under agreement with bond holders or
otherwise, including any amounts due under a credit enhancement
device or any instrument authorized by section 10 of this 2007
Act; and
(d) Pay bond-related costs incurred during that fiscal year.
(2) The State Forester shall transfer an amount of working
forests net revenues necessary to pay the certified amounts
described in subsection (1) of this section to the Working
Forests Revenue Bond Fund and the Working Forests Revenue Bond
Administrative Fund in the following priority:
(a) First, there shall be transferred to the Working Forests
Revenue Bond Fund an amount of working forests net revenues that,
when added to any amounts credited to the Working Forests Revenue
Bond Fund that are available for such purpose, will be sufficient
to pay all amounts of working forests revenue bond principal,
interest and premium, if any, scheduled to be paid in that fiscal
year;
(b) Second, if the balances in any reserve accounts for working
forests revenue bonds are less than the amounts the state has
covenanted to maintain in those reserve accounts, there shall be
transferred to the Working Forests Revenue Bond Fund for credit
to those reserve accounts amounts of working forests net revenues
sufficient to restore the balances in those reserve accounts to
the levels the state has covenanted to maintain; and
(c) Third, there shall be transferred to the Working Forests
Revenue Bond Administrative Fund an amount necessary to pay
bond-related costs for that fiscal year. + }
SECTION 10. { + Issuance of working forests revenue bonds. (1)
In accordance with any applicable provisions of ORS chapters 286
and 288, at the request of the State Forester, the State
Treasurer from time to time may issue working forests revenue
bonds to:
(a) Finance the acquisition and management of real property and
interests therein for the purpose of maintaining working forests;
(b) Pay the costs of issuing working forests revenue bonds and
administering the working forests revenue bond program; and
(c) Pay the State Treasurer and the Oregon Department of
Administrative Services for all bond-related costs incurred by
the treasurer and the department.
(2) The State Treasurer may, at the request of the State
Forester, issue one or more series of refunding working forests
revenue bonds. The refunding working forests revenue bonds shall
be structured so that the amount required to pay those bonds in
each fiscal year does not exceed the anticipated amount of
working forests net revenues that could have been committed to
pay the working forests revenue bonds that are refunded.
Refunding working forests revenue bonds shall be issued in
amounts that the State Treasurer determines are necessary and
appropriate in order to:
(a) Pay or defease the principal of and the interest and
premium, if any, on the bonds to be refunded; and
(b) Pay any bond-related costs related to the refunding working
forests revenue bonds.
(3) All working forests revenue bonds issued under this section
shall be payable from:
(a) The amount pledged for payment under subsection (6) of this
section; and
(b) Any appropriated funds.
(4) Working forests revenue bonds may not be general
obligations of the State of Oregon and may 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 is not under any legal compulsion
or obligation to provide any appropriated funds and is not liable
to any party for any failure to provide appropriated funds. All
working forests revenue bonds issued under this section shall
contain a statement that the state is not obligated to pay
working forests revenue bond principal or 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 is not pledged
to the payment of working forests revenue bond principal,
interest or premium.
(5) The State Treasurer may establish reserves for working
forests revenue 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 Oregon, may covenant to
maintain the reserves at particular levels, but solely from the
amounts that may be pledged to pay working forests revenue bonds
under subsection (6) of this section. If there are insufficient
working forests net revenues to pay the principal, interest and
premium, if any, due on any outstanding working forests revenue
bonds in the fiscal year or if reserves are drawn down below the
level that this state has covenanted to maintain, the Director of
the Oregon Department of Administrative Services shall promptly
certify to the Legislative Assembly or, if the Legislative
Assembly is not then in session, to the Emergency Board, the
amount needed to pay the principal, interest and premium, if any,
or to restore the reserves to their required level. The
Legislative Assembly or the Emergency Board may provide
appropriated funds in the amount certified by the Director of the
Oregon Department of Administrative Services. Any appropriated
funds so provided shall be immediately transferred to the Working
Forests Revenue Bond Fund for the payment of principal, interest
and premium, if any, or to restore the balance in the established
reserves. The State of Oregon may enter into covenants with the
owners of the working forests revenue bonds that specify the
timing and content of the director's certification. By enacting
this subsection, the Legislative Assembly acknowledges its
current intent to provide appropriated funds in the amount
certified by the director under this subsection. However, the
Legislative Assembly or the Emergency Board does not have any
legal obligation to provide any appropriated funds.
(6) Notwithstanding any other provision of law, the State
Treasurer may pledge all or any portion of the working forests
net revenues deposited in the Working Forests Revenue Bond Fund
and any unexpended net proceeds of the sale of working forests
revenue bonds to refund working forests revenue bonds and to pay
amounts due in connection with any credit enhancement devices or
any instruments authorized by subsection (5) or (9) of this
section. The lien of such pledge shall be valid and binding
immediately upon delivery by the state of the working forests
revenue 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 transfer to the Working
Forests Revenue Bond Fund or the Working Forests Revenue Bond
Administrative Fund, regardless of whether there was physical
delivery, filing or another 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 working forests revenue bonds may be issued in
different series and that each series may be secured by a lien
on, and pledge of, the working forests net revenues that is
superior to, subordinate to or on a parity with the lien of the
pledge securing other series of working forests revenue bonds.
Nothing in this section shall be construed to limit the powers
granted in any other subsection of this section.
(7) Any covenants made under this section for the benefit of
owners of working forests revenue bonds shall constitute
contracts between the State of Oregon and the owners of working
forests revenue bonds. The State Treasurer, or the Director of
the Oregon Department of Administrative Services with the consent
of the State Treasurer, may, on behalf of the State of Oregon and
in addition to the covenants authorized by subsection (5) of this
section, make the following covenants for the benefit of the
owners of working forests revenue bonds and any providers of
credit enhancement devices or any instruments authorized by
subsection (5) or (9) of this section:
(a) Except as permitted by a pledge made under subsection (6)
of this section, the state shall not create any lien or
encumbrance on the working forests net revenues that is superior
to the liens of the pledges authorized by subsection (6) of this
section.
(b) Subject only to the availability of working forests net
revenues, the State of Oregon shall budget and provide
expenditure limitation or appropriation authority in each fiscal
year for an amount of working forests net revenues that, when
added to other funds lawfully budgeted and available for the
purpose, will be sufficient:
(A) To pay in full the principal, interest and premium, if any,
due and to become due on all outstanding working forests revenue
bonds in the fiscal year;
(B) To maintain the required balance in any reserves
established for working forests revenue bonds; and
(C) To pay amounts due to the providers of credit enhancement
devices for working forests revenue bonds under subsection (9) of
this section or any instruments authorized by subsection (5) of
this section.
(c) The state shall apply the working forests net revenues and
any other amounts so budgeted and appropriated for the purposes
described in paragraph (b) of this subsection.
(d) The state shall continue to operate the working forests
until all working forests revenue bonds are paid or defeased.
(8) In connection with the issuance of any working forests
revenue bonds, the State Treasurer may establish such accounts
and subaccounts within the Working Forests Revenue 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 the
state, enter into any agreements that the State Treasurer or the
director determines are necessary or appropriate to issue working
forests revenue bonds and carry out the provisions of sections 2
to 11 of this 2007 Act.
(9) 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 working forests revenue
bonds, and may enter into any related agreements.
(10) The State Treasurer may provide that all or any portion of
the Working Forests Revenue Bond Fund, the Working Forests
Revenue 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 11. { + Authority to adopt rules. The State Board of
Forestry may adopt rules appropriate for the implementation of
sections 3, 4, 5, 6 and 9 of this 2007 Act. + }
SECTION 12. { + 2007-2009 biennium bonds. Notwithstanding ORS
286.505 to 286.545, the Legislative Assembly authorizes the
issuance of $___ million of working forests revenue bonds in the
2007-2009 biennium. + }
SECTION 13. { + Captions. The section captions used in this
2007 Act are provided only for the convenience of the reader and
do not become part of the statutory law of this state or express
any legislative intent in the enactment of this 2007 Act. + }
SECTION 14. { + Emergency clause. 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. + }
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