76th OREGON LEGISLATIVE ASSEMBLY--2011 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 1206
House Bill 3452
Sponsored by COMMITTEE ON REVENUE
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.
Creates Oregon Finance and Credit Board to formulate and
implement investment and management policies and practices for
state funds controlled and administered by state agencies.
Authorizes board to enter into contracts with state agencies for
investment and management of state funds. Authorizes board to
make, purchase, guarantee and hold loans, purchase participation
interests and invest and manage state funds. Directs board to
adopt rules. Requires report to Legislative Assembly on or before
date of convening of 2013 regular session of Legislative
Assembly.
Declares emergency, effective on passage.
A BILL FOR AN ACT
Relating to state finance; creating new provisions; amending ORS
293.148; and declaring an emergency.
Be It Enacted by the People of the State of Oregon:
SECTION 1. { + The Legislative Assembly finds that:
(1) The availability of venture capital for Oregon businesses
that are engaged in economic development is critical to the
continued growth and development of the economy of Oregon.
(2) There exists a substantial gap between available venture
capital resources and the need of Oregon businesses that are
engaged in economic development for such resources.
(3) Currently existing state-managed funds constitute a major
financial resource of the State of Oregon. Prudent investment and
management of these funds may, together with access to capital
provided in partnership with financial institutions, enhance the
availability of venture capital for Oregon businesses engaged in
economic development. + }
SECTION 2. { + As used in section 3 of this 2011 Act, unless
the context requires otherwise:
(1) 'Business' means a corporation, partnership,
proprietorship, firm, enterprise, joint venture, franchise,
association, organization, self-employed individual or other
business entity operating or doing business in Oregon.
(2) 'Economic development' means development that relates to
and supports the economic development policy and strategy for
this state outlined in ORS 285A.020, that promotes, expands or
prevents the decline of a business located or to be located in
Oregon and that is necessary to and consistent with the policies
of the Oregon Finance and Credit Board.
(3) 'Financial institution' means a banking institution,
federal bank, federal savings bank and insured institution as
those terms are defined in ORS 706.008, a credit union as that
term is defined in ORS 723.006 and any other institution defined
by rule of the Oregon Finance and Credit Board as a financial
institution for purposes of section 3 of this 2011 Act.
(4) 'State agency' means an officer, board, commission,
department, division, institution, branch or agency in the
executive or administrative branch of state government or a
public institution of higher education.
(5) 'State fund' means a fund established under the control and
administration of a state agency that has entered into a contract
with the Oregon Finance and Credit Board for investment and
management of the fund. + }
SECTION 3. { + (1) The Oregon Finance and Credit Board is
established to formulate and implement policies and procedures,
and to make recommendations, for the investment, reinvestment and
management of state funds to support the economic development of
this state and to increase access to capital for businesses, in
partnership with local financial institutions, for the purpose of
furthering economic development in this state.
(2) The board shall consist of three members as follows:
(a) The Governor, who shall be the chairperson of the board;
(b) The State Treasurer; and
(c) The Commissioner of the Bureau of Labor and Industries.
(3) The Oregon Finance and Credit Board shall formulate and
implement investment and management policies and practices
subject to the standard set forth in ORS 293.726 for the
investment and management of state funds. In exercising its
authority under this subsection, the board may approve and direct
specific investments and strategies for the investment of moneys
in state funds and may make investments directly, without the use
of a management company, in any form or manner that would be
lawful for a private corporation having similar intent.
(4) The board may enter into a contract with a state agency for
the investment and management of state funds over which the
agency has supervision and control and may enter into any other
contract the board deems necessary or appropriate to carry out
the board's duties, functions and powers under this section.
(5) The board may:
(a) Make, purchase, guarantee or hold loans:
(A) To qualified businesses engaged in economic development
that are doing business in this state; or
(B) Originated by financial institutions doing business in this
state.
(b) Make loans in the form of participation loans where the
originator of the loan is a financial institution doing business
in this state.
(c) Purchase participation interests in loans made or held by
financial institutions doing business in this state.
(d) Invest and manage state funds in conformity with policies
and practices formulated by the board and the investment standard
stated in ORS 293.726 (1).
(e) Perform all acts and do all things necessary, convenient,
advisable or desirable to carry out the powers expressly granted
or necessarily implied in this section through its chairperson,
officers, agents and representatives or by contracts with any
person, state agency or financial institution.
(6) The board may enter into contracts with one or more
management companies for the provision of investment advice, to
manage and invest moneys in state funds and for other services
that the board deems reasonable and necessary to fulfill the
duties of the board under this section. A management company
selected under this subsection shall manage moneys in state funds
subject to the investment policies and practices established by
the board with the care, skill and diligence that a prudent
investor acting in a similar capacity and familiar with such
investments would use in managing and investing a similar
account. Contracts entered into under this subsection are not
subject to the State Personnel Relations Law, ORS 279.835 to
279.855 or ORS chapter 279A or 279B.
(7) The board shall keep a separate fund or account for each
state fund it has contracted with a state agency to invest and
manage for the purpose of recording individual amounts and totals
of all investments of moneys in the state fund.
(8) The board may assess and charge fees for services provided
in the management and investment of state funds that may be
credited against moneys earned from investment and reinvestment
of the state funds.
(9) The Oregon Business Development Department shall provide
staff to the board as necessary to allow the board to carry out
its responsibilities under this section.
(10) The Oregon Finance and Credit Board shall adopt rules that
specify:
(a) The board's powers, permissible investments and activities
and services that the board may provide.
(b) Limits for loans and other obligations the board makes,
authorizes or undertakes.
(c) Other requirements that the board considers necessary for
the exercise of the board's powers and functions under this
section.
(11) A member of the board may receive reimbursement of
expenses under ORS 292.495 (2) but may not receive compensation
under ORS 292.495 (1) or otherwise for participation as a member
of the board. + }
SECTION 4. { + The Oregon Finance and Credit Board shall
submit a report to the Legislative Assembly on or before the date
of convening of the 2013 regular session of the Legislative
Assembly as specified in ORS 171.010. The report required by this
section shall include the policies and practices for investment
and management of state funds formulated by the board,
recommendations for legislation and a summary of the moneys
invested and managed by the board, if any. + }
SECTION 5. { + Except as provided in ORS 293.148, as soon as
possible after the end of each calendar year, the Oregon Finance
and Credit Board shall determine the amount of income, if any,
earned by state funds invested and managed by the Oregon Finance
and Credit Board in that calendar year that is in excess of
amounts necessary to pay for expenses of developing and
administering the programs and funds under the direction of the
board. The amount of the excess shall be transferred to the
Oregon Rainy Day Fund established by ORS 293.144. + }
SECTION 6. ORS 293.148 is amended to read:
293.148. (1) If the moneys in the Oregon Rainy Day Fund
established by ORS 293.144 just prior to the time of a transfer
scheduled under ORS 293.144 (3) or 293.146 { + or section 5 of
this 2011 Act + } equal at least 7-1/2 percent of the amount of
General Fund revenues collected during the prior biennium, moneys
that would otherwise be transferred to the Oregon Rainy Day Fund
shall be deposited in the General Fund.
(2) If the moneys in the Oregon Rainy Day Fund just prior to
the time of a transfer scheduled under ORS 293.144 (3) or 293.146
{ + or section 5 of this 2011 Act + } do not equal at least
7-1/2 percent of the amount of General Fund revenues collected
during the prior biennium, the transfer to the Oregon Rainy Day
Fund shall be made regardless of whether that transfer increases
the amount in the Oregon Rainy Day Fund to at least 7-1/2 percent
of the amount of General Fund revenues collected during the prior
biennium.
SECTION 7. { + This 2011 Act being necessary for the immediate
preservation of the public peace, health and safety, an emergency
is declared to exist, and this 2011 Act takes effect on its
passage. + }
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