Chapter 44 Oregon Laws 1999

Session Law

AN ACT

SB 200

Relating to state bonds; creating new provisions; amending ORS 285B.530, 285B.533, 286.056, 286.058, 287.020, 287.022, 287.034, 288.625, 288.895, 327.700, 327.705, 327.708, 327.711, 348.696, 390.060, 390.063 and 390.065; repealing ORS 285B.536, 285B.539, 285B.542, 285B.545, 287.024, 287.026, 327.715, 327.718, 327.721, 327.724, 327.727, 327.736, 390.070, 390.073, 390.075, 390.077 and 390.080; appropriating money; and declaring an emergency.

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

SECTION 1. As used in ORS 327.700 to 327.727 and sections 1 to 9 of this 1999 Act, 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 section 7 (6) of this 1999 Act.

(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 section 7 (6) of this 1999 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 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 United States in connection with lottery 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 lottery bonds or maintaining the lottery bond program.

(3) "Lottery bonds" means:

(a) The state park lottery bonds authorized by ORS 390.060 to 390.080, the infrastructure lottery bonds authorized by ORS 285B.530 to 285B.548 and the education lottery bonds authorized by ORS 327.700 to 327.727;

(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 not be issued under sections 1 to 9 of this 1999 Act; and

(c) Any refunding lottery bonds.

(4) "Lottery Bond Administrative Fund" means the fund created by section 5 of this 1999 Act.

(5) "Lottery Bond Fund" means the fund created by section 4 of this 1999 Act.

(6) "Lottery bond program" means a financing program authorized by:

(a) ORS 285B.530 to 285B.548, 327.700 to 327.727 or 390.060 to 390.080; 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 not be issued under sections 1 to 9 of this 1999 Act.

(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 sections 1 to 9 of this 1999 Act and ORS 267.334, 285B.419, 285B.422, 285B.425, 285B.482, 285B.530 to 285B.548, 327.700 to 327.727 and 390.060 to 390.080, shall have a claim on lottery funds that is superior to the claim of the lottery bonds authorized by sections 1 to 9 of this 1999 Act.

SECTION 2. (1) The Legislative Assembly declares that the purpose of sections 1 to 9 of this 1999 Act 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 sections 1 to 9 of this 1999 Act 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 sections 1 to 9 of this 1999 Act and any appropriated funds. The faith and credit of the State of Oregon or any of its taxing power shall not be pledged or committed to the payment of lottery bonds or any other commitment of the State of Oregon authorized by sections 1 to 9 of this 1999 Act.

SECTION 3. (1) Any legislation authorizing issuance of lottery bonds under sections 1 to 9 of this 1999 Act 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 4. (1) The Lottery Bond Fund is established in the State Treasury, separate and distinct from the General Fund. The amounts of unobligated net lottery proceeds described in section 6 (2)(a) and (b) of this 1999 Act and any appropriated funds and investment earnings of the Lottery Bond Fund shall be credited to the Lottery Bond Fund. The State Treasurer may establish reserves for lottery bonds as provided in section 7 (6) of this 1999 Act. The reserves shall be credited to such account in the Lottery Bond Fund as the State Treasurer may designate.

(2) The amounts credited to the Lottery Bond Fund are continuously appropriated only for the purpose of paying, when due, the principal of and the interest and premium, if any, on outstanding lottery bonds, funding lottery bond reserves and paying amounts due in connection with any instrument authorized by section 7 (6) of this 1999 Act.

(3) The moneys in the Lottery Bond Fund shall be used and applied solely to pay, when due, the principal of and the interest and premium, if any, on any lottery bonds, to fund reserves and to pay amounts due under instruments authorized by section 7 (6) of this 1999 Act.

SECTION 5. The Lottery Bond Administrative Fund is established in the State Treasury, separate and distinct from the General Fund. The amounts of unobligated net lottery proceeds specified in section 6 (2)(c) of this 1999 Act, the proceeds of any lottery bonds issued to pay bond-related costs and the investment earnings on amounts in the Lottery Bond Administrative Fund shall be credited to the Lottery Bond Administrative Fund. All moneys credited from time to time to the Lottery Bond Administrative Fund, including any investment earnings thereon, are appropriated continuously to the Oregon Department of Administrative Services only for payment of bond-related costs. Amounts in the Lottery Bond Administrative Fund shall be disbursed upon the written request of the Director of the Oregon Department of Administrative Services.

SECTION 6. (1) Subject only to the availability of unobligated net lottery proceeds, in each fiscal year in which lottery bonds are outstanding, there shall be allocated from the Administrative Services Economic Development Fund created by ORS 461.540 or, if unobligated net lottery proceeds in that fund are insufficient, from any other fund or account of this state that contains unobligated net lottery proceeds, an amount of unobligated net lottery proceeds that is sufficient:

(a) To pay all lottery bond principal, interest and premium, if any, that is scheduled to be paid in that fiscal year;

(b) To restore the balance in any reserve account for lottery bonds to the level the state has covenanted to maintain in the account under section 7 (6) of this 1999 Act, including any amounts due under an instrument authorized by section 7 (6) of this 1999 Act; and

(c) To pay bond-related costs that will be due in that fiscal year.

(2) The amounts of unobligated net lottery proceeds allocated pursuant to subsection (1) of this section shall be transferred to the following funds and accounts in the following order of priority:

(a) First, there shall be transferred to the Lottery Bond Fund an amount of unobligated net lottery proceeds that, when added to any amounts credited to the Lottery Bond Fund that are available for such purpose, will be sufficient to pay all amounts of lottery bond principal, interest and premium scheduled to be paid in that fiscal year;

(b) Second, if the balances in any reserve accounts for lottery bonds are less than the amounts the state has covenanted to maintain in those reserve accounts, there shall be transferred to the Lottery Bond Fund for credit to those reserve accounts amounts of unobligated net lottery proceeds sufficient to restore the balances in those reserve accounts to the levels the state has covenanted to maintain; and

(c) Third, any remaining amount shall be transferred to the Lottery Bond Administrative Fund.

(3) Notwithstanding any other provision of law, in accordance with section 4 (4), Article XV of the Oregon Constitution, the annual allocations of unobligated net lottery proceeds made by this section and the transfers of unobligated net lottery proceeds required to be made by this section shall be satisfied and credited from the first unobligated net lottery proceeds received by this state before any other allocation, appropriation or disbursement of the earnings of the unobligated net lottery proceeds is made in such fiscal year.

(4) The percentages of revenues of the Oregon State Lottery that are dedicated for particular purposes under section 4 (4), Article XV of the Oregon Constitution, shall be calculated without deducting from the total lottery revenues the amount of unobligated net lottery proceeds that are required to pay lottery bonds.

(5) If there are not sufficient revenues of the Oregon State Lottery to pay lottery bonds and to satisfy the percentage dedications set forth in the Oregon Constitution, the State Treasurer shall, before issuing any series of lottery bonds, cause a projection of unobligated net lottery proceeds and lottery bond debt service to be prepared. The State Treasurer shall not issue a series of lottery bonds if the projection indicates that there will not be sufficient proceeds of the Oregon State Lottery to satisfy the percentage dedications of section 4 (4), Article XV of the Oregon Constitution, and to leave unobligated net lottery proceeds in amounts at least equal to the debt service on all lottery bonds, including the series proposed to be issued. However, if at some time in the future a conflict arises because of a decline in revenues of the Oregon State Lottery, unobligated net lottery proceeds shall be allocated and applied first to pay lottery bonds, and the remaining net revenues of the Oregon State Lottery shall be divided pro rata among the constitutionally dedicated uses.

(6) Notwithstanding any other provision of law, when the Legislative Assembly enacts laws granting pledges, making dedications or making appropriations of net proceeds of the Oregon State Lottery for purposes other than payment of lottery bonds, all such pledges, dedications and appropriations, whenever granted or made, shall be subordinate to the pledges and dedications of unobligated net lottery proceeds for lottery bonds.

SECTION 7. (1) In accordance with any applicable provisions of ORS chapters 286 and 288 and sections 1 to 9 of this 1999 Act, the State Treasurer, with the concurrence 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 sections 1 to 9 of this 1999 Act 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 Oregon, may covenant to maintain the reserves at particular levels, but solely from the amounts that may be pledged to pay lottery bonds under subsection (7) of this section. If the 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 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 used immediately to restore the balance in the reserves established for the lottery bonds. The State of Oregon may enter into covenants with the owners of the lottery bonds that specify the timing and content of the director's certification. By enacting this subsection, the Legislative Assembly acknowledges its current intention to provide appropriated funds in the amount certified by the director under this subsection. However, the Legislative Assembly or the Emergency Board shall not have any legal obligation to provide any appropriated funds.

(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 sections 1 to 9 of this 1999 Act.

(8) Any covenants made under this section for the benefit of owners of lottery bonds shall constitute contracts between the State of Oregon and the owners of lottery 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 (6) of this section, make the following covenants for the benefit of the owners of lottery bonds and any providers of credit enhancement or instruments authorized by subsection (6) of this section:

(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 sections 1 to 9 of this 1999 Act 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 8. The Oregon Education Fund is established in the State Treasury, separate and distinct from the General Fund. Seventy-five percent of the net available earnings on amounts in all accounts of the Education Endowment Fund shall be transferred monthly to the Oregon Education Fund as directed by the Director of the Oregon Department of Administrative Services. Investment earnings on amounts in the Oregon Education Fund shall be credited to the Oregon Education Fund. Amounts in the Oregon Education Fund shall be used only for public education. The Legislative Assembly may, but shall be under no legal obligation to, allocate and appropriate amounts in the Oregon Education Fund to pay education lottery bonds. The Director of the Oregon Department of Administrative Services may specify when during any fiscal year amounts shall be transferred from the Oregon Education Fund to be used for public education, including transfers to pay education lottery bonds.

SECTION 9. (1) The State Treasurer shall merge into the Lottery Bond Fund the lottery bond funds authorized by ORS 285B.530 to 285B.548, 327.700 to 327.727 and 390.060 to 390.080.

(2) The State Treasurer shall merge into the Lottery Bond Administrative Fund the lottery bond administrative funds authorized by ORS 285B.530 to 285B.548, 327.700 to 327.727 and 390.060 to 390.080.

(3) The State Treasurer may merge into a single reserve account the reserve accounts created for lottery bonds authorized by ORS 285B.530 to 285B.548, 327.700 to 327.727 and 390.060 to 390.080.

SECTION 10. ORS 327.700 is amended to read:

327.700. As used in ORS 327.700 to 327.727, unless the context requires otherwise:

[(1) "Appropriated funds" for a particular fiscal year means any moneys, other than unobligated net lottery proceeds, specifically appropriated or otherwise specifically made available by the Legislative Assembly or the Emergency Board in the fiscal year to replenish reserves established as additional security for lottery bonds pursuant to the authority granted in ORS 327.724 (6).]

[(2) "Lottery bonds" means:]

[(a) All state education lottery bonds; and]

[(b) Any refunding lottery bonds.]

[(3) "Education Lottery Bond Fund" means the fund created by ORS 327.715.]

[(4) "Education Lottery Bond Administrative Fund" means the fund created by ORS 327.718.]

[(5) "Refunding lottery bonds" means any bonds issued for the purpose of refunding any lottery bonds.]

[(6)] (1) "State education lottery bonds" means the bonds authorized to be issued under ORS 327.711 [and 327.724] for the purpose of financing state education projects.

[(7)] (2) "State education projects" means projects for the acquisition, construction, improvement, remodeling, maintenance or repair of public school facilities in the State of Oregon, including but not limited to land, site preparation costs, permanent or portable buildings and equipment, telecommunications equipment, computers, software and related technology, textbooks, library books, furniture and furnishings, vehicles, costs of planning for bond issues and capital improvements, the payment of debt service on obligations, other than general obligation bonds, issued for such projects and holding in reserve for any of the purposes described in this subsection.

[(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 the 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 the state pursuant to the authority granted in ORS 391.140 that, notwithstanding any provisions of ORS 327.700 to 327.727, shall have a claim on lottery funds that is superior to the claim of the lottery bonds authorized by ORS 327.700 to 327.727.]

SECTION 11. ORS 327.705 is amended to read:

327.705. The Legislative Assembly declares that the purpose of ORS 327.700 to 327.727 is to [establish a state education lottery bond program and to] authorize lottery bonds [that program to provide financing] for state education projects. The lottery bonds authorized by ORS 327.700 to 327.727 shall be issued pursuant to sections 1 to 9 of this 1999 Act. [revenue bonds only and] 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 327.727, 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 327.700 to 327.727] sections 1 to 9 of this 1999 Act. Neither the faith and credit of the State of Oregon nor any of its taxing power shall be pledged or committed to the payment of lottery bonds or any other commitment of the State of Oregon authorized by ORS 327.700 to 327.727.

SECTION 12. ORS 327.708 is amended to read:

327.708. The Legislative Assembly finds that:

(1) The financing of the costs of state education projects accomplishes the purpose of financing public education in Oregon, as well as having the additional effect of creating jobs and furthering economic development in Oregon by:

(a) Maintaining and increasing the utility, effectiveness and capacity of public education facilities and public education technology and ensuring their availability to Oregon students; and

(b) Creating employment opportunities in this state through the funding of capital improvement and maintenance projects on which workers will be employed.

(2) Based on the findings made in this section, the use of the net proceeds from the operation of the Oregon State Lottery [for the purposes described in ORS 327.705] to fund state education projects and to pay state education lottery bonds is an appropriate use of state lottery funds under section 4, Article XV of the Oregon Constitution, and ORS 461.510.

SECTION 13. ORS 327.711 is amended to read:

327.711. (1) The Legislative Assembly [intends to] may pay state education lottery bond debt service after the 1997-1999 biennium from earnings on the Education Endowment Fund. However, no lien or pledge of those earnings shall be made to secure the lottery bonds, and the State of Oregon shall have no legal obligation to pay the lottery bonds from the earnings on the Education Endowment Fund. Any earnings from the Education Endowment Fund that are provided by the Legislative Assembly [in future fiscal years] and credited to the Lottery Bond Fund shall be credited against, and shall reduce, the unobligated net lottery proceeds that are required by [ORS 327.715 and 327.721 (2)(a) and (b)] section 6 (2)(a) and (b) of this 1999 Act subsequently to be credited [in] to the [Education] Lottery Bond Fund in that fiscal year.

(2) State education lottery bonds shall be issued only at the request of the Superintendent of Public Instruction. State education lottery bonds may be issued in an amount sufficient to provide no more than $150 million of net proceeds to pay costs of state education projects, plus the amounts required for [the purposes described in ORS 327.724 (2)] bond-related costs.

(3) The School Capital Construction, Maintenance and Technology Fund is established in the State Treasury, separate and distinct from the General Fund. The net proceeds from the sale of the state education lottery bonds that are available to pay costs of state education projects shall be credited to the School Capital Construction, Maintenance and Technology Fund. Investment earnings received on amounts in the School Capital Construction, Maintenance and Technology Fund shall be credited to the School Capital Construction, Maintenance and Technology Fund. All moneys from time to time credited to the School Capital Construction, Maintenance and Technology Fund, including any investment earnings, are appropriated continuously to the Department of Education only for distribution to school districts pursuant to ORS 327.731 and for payment of the bond-related costs [and expenses described in ORS 327.724 (2)] that are allocable to state education lottery bonds. Amounts in the School Capital Construction, Maintenance and Technology Fund shall be disbursed upon the written request of the Superintendent of Public Instruction to school districts for state education projects pursuant to ORS 327.731, and upon the written request of the Director of the Oregon Department of Administrative Services to pay for bond-related costs [described in ORS 327.724 (2)] that are allocable to state education lottery bonds.

SECTION 14. ORS 286.056 is amended to read:

286.056. The State Treasurer shall approve a notice of sale for all bonds [which] that are to be sold at public sale. The State Treasurer shall cause the notice of sale, or a summary of the notice of sale, to be [published prior to the sale in a national financial newspaper and in a newspaper or financial journal of general circulation published in Oregon. In addition to publication in a newspaper or financial journal,] disseminated in a manner prescribed by the State Treasurer, which may [approve other] include any means and methods for giving public notice of the bond sale, including, when reasonably practicable, the use of one or more electronic media networks.

SECTION 15. ORS 286.058 is amended to read:

286.058. The notice of sale required by ORS 286.056 shall specify:

(1) The [time, date and place where] process by which bids will be received, [and] considered and acted upon, including the deadline for submitting bids, the total amount of bonds[,] and the denomination of bonds;

(2) The issue date, maturity dates and amounts, interest payment dates, and place of payment of the bonds;

(3) The dates of redemption, if any; the call price premium, if any; and the order and place of redemption;

(4) The method of submitting and the amount of any required good faith deposit [by certified or cashier's check in the amount not less than two percent of the par value of the bonds, or $500,000, whichever is less];

(5) Such constraints on the coupon or interest rates as the agency, with the approval of the State Treasurer, may wish to impose;

(6) The interest basis and definition thereof on which bids are to be awarded;

(7) The nature of the security on the bonds; and

(8) The name of bond counsel; the name of the source of the preliminary official statement; the means of communication used to circulate the preliminary official statement, which may include electronic or any other means prescribed by the State Treasurer; coupon rate multiples, registration provision, if any; estimated delivery date and place; the purpose of the bonds; the statutes and constitutional provisions pursuant to which the bonds are being issued; the procedure for awarding the bids; and such other provision as the agency, with the approval of the State Treasurer, may wish to impose.

SECTION 16. ORS 287.020 is amended to read:

287.020. (1) The issuer may request the Oregon Municipal Debt Advisory Commission to prepare the preliminary official statement described in ORS 287.018 and shall provide the commission with the information required by ORS 287.018.

(2) The issuer may request the Oregon Municipal Debt Advisory Commission to prepare the notice of bond sale required by ORS 287.022 [and 287.024]. However, the responsibility for publication, advertising and distribution of the notice of bond sale shall remain with the issuer.

(3) The commission may charge the issuer a fee commensurate with expenses incurred in the preparation, publication and distribution of a preliminary official statement or notice of bond sale prepared pursuant to subsection (1) or (2) of this section.

SECTION 17. ORS 287.022 is amended to read:

287.022. [(1)] For bonds [which] that are sold at public competitive bid sale, the issuer shall prepare and disseminate a notice of bond sale and provide for the submission and award of bids in the manner prescribed for revenue bonds in ORS 288.805 to 288.945. [which shall specify:]

[(a) The time, date and place where bids will be received, and considered and acted upon, the total amount of bonds, and the denominations of the bonds;]

[(b) The issue date, maturity dates and amounts, interest payment dates, and place of payment of the bonds;]

[(c) The date of optional redemption, if any, the call price premium, if any, and the order of bond redemption and place of redemption;]

[(d) The maximum effective rate of interest and the minimum percentage of par value of the bonds which may be bid;]

[(e) The required good faith deposit, which may be in the form of a certified or cashier's check on a bank doing business in this state, or a bond, or some other commitment the issuer determines adequate to protect the issuer against a bidder's failure to comply with the terms of its bid, in the amount not less than two percent of the par value of the bonds, or $500,000, whichever is the lesser;]

[(f) Such constraints on the coupon rates as the issuer may impose;]

[(g) The interest basis and definition thereof on which bond bids are to be awarded; and]

[(h) The name of bond counsel, if any, who will furnish the legal opinion.]

[(2) The notice of sale may contain:]

[(a) The name of the person who will furnish financial data;]

[(b) Coupon rate multiples;]

[(c) Registration provision, if any;]

[(d) Bid forms availability;]

[(e) Estimated delivery date and place;]

[(f) Procedure for awarding tie bids;]

[(g) Such other conditions as the issuer may impose;]

[(h) The statute and ordinance, if any, pursuant to which the bonds are to be issued; and]

[(i) The purpose of the bonds.]

[(3) Bids submitted must be for all bonds offered for sale. All bids are to be unconditional and may be submitted in writing in a sealed envelope clearly marked as a proposal for bonds or may be submitted electronically, at the discretion of the issuer.]

SECTION 18. ORS 287.034 is amended to read:

287.034. The advisory commission may:

(1) Provide assistance and consultation, upon request of the state or of local government units, 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) Collect, maintain and provide financial, economic and social data on local government units pertinent to their ability to assume and service bonded obligations.

(3) Collect, maintain and provide information on bonds sold and outstanding and serve as a clearinghouse for all local bond issues.

(4) Maintain contact with municipal bond underwriters, credit rating agencies, investors and others to improve the market for local government 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 [and 287.024].

(6) Undertake or commission studies on methods to reduce the costs of state and local issues.

(7) Recommend changes in state law and local practices to improve the sale and servicing of local bonds.

(8) Perform any other function required or authorized by law.

(9) Pursuant to ORS 183.310 to 183.550 adopt rules necessary to carry out its duties.

SECTION 19. ORS 288.895 is amended to read:

288.895. For the state, [the notice of sale for public competitive bid sales shall be published in the manner prescribed by the State Treasurer] a competitive bid process shall be conducted in the manner prescribed by the State Treasurer, which may include, but is not limited to, notifying potential purchasers, conducting sales, accepting and awarding bids by written, telephonic, facsimile, electronic or any other means of communication and offering for sale and accepting bids on any combination of bonds or on an all or none basis.

SECTION 20. ORS 288.625 is amended to read:

288.625. Advance refunding bonds for general obligation, revenue or special revenue bonds may be issued, at the discretion of the governing body, in the manner provided in ORS 287.016 to 287.026 [provided, however, that for the purposes of this section, "four hours" as used in ORS 287.026 means four business hours, or negotiated at a price and on terms the governing body considers advisable].

SECTION 21. ORS 390.060 is amended to read:

390.060. As used in ORS 390.060 to 390.080, unless the context requires otherwise:

[(2) "Bond-related costs" means:]

[(a) The costs and expenses of issuing, administering and maintaining lottery bonds and the lottery bond program, such as paying or redeeming lottery bonds, paying amounts due in connection with credit enhancements and any instruments authorized by ORS 390.077 (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 United States in connection with lottery 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 lottery bonds or maintaining the lottery bond program.]

[(3) "Lottery bonds" means:]

[(a) All state park lottery bonds;]

[(b) Any other lottery bonds that the Legislative Assembly authorizes to be issued under ORS 390.060 to 390.080; and]

[(c) Any refunding lottery bonds.]

[(4) "Lottery Bond Fund" means the fund created by ORS 390.070.]

[(5) "Lottery Bond Administrative Fund" means the fund created by ORS 390.073.]

[(6) "Refunding lottery bonds" means any bonds issued for the purpose of refunding any lottery bonds.]

[(7)] (1) "State park lottery bonds" means the bonds authorized to be issued under ORS 390.067 [and 390.077] for the purpose of financing state park projects.

[(8)] (2) "State park projects" means projects for the acquisition, development, improvement, upgrading, preservation and expansion of the capacity of facilities of the system of state parks, including but not limited to parks, park facilities, ocean shores, scenic waterways, trails and historic sites in the State of Oregon.

[(9) "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 the 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]

[(10) "Westside lottery bonds" means the bonds issued by the state pursuant to the authority granted in ORS 391.140 that, notwithstanding any provisions of ORS 267.334, 285B.410, 285B.422, 285B.425, 285B.482, 285B.530 to 285B.548 and 390.060 to 390.080, shall have a claim on lottery funds that is superior to the claim of the lottery bonds authorized by ORS 390.060 to 390.080.]

SECTION 22. ORS 390.063 is amended to read:

390.063. The Legislative Assembly declares that the purpose of ORS 390.060 to 390.080 is to [establish a state revenue bond program and to] authorize [that program to provide financing] lottery bonds for state park projects. The lottery bonds authorized by ORS 390.060 to 390.080 shall be [revenue bonds only and] issued pursuant to sections 1 to 9 of this 1999 Act. The obligation of the State of Oregon with respect to the bonds and with respect to any grant agreement or other commitment authorized by ORS 267.334, 285B.410, 285B.422, 285B.425, 285B.482, 285B.530 to 285B.548 and 390.060 to 390.080 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 390.060 to 390.080] sections 1 to 9 of this 1999 Act. Neither the faith and credit of the State of Oregon nor any of its taxing power shall be pledged or committed to the payment of lottery bonds or any other commitment of the State of Oregon authorized by ORS 390.060 to 390.080.

SECTION 23. ORS 390.065 is amended to read:

390.065. The Legislative Assembly finds that:

(1) Expenditures by visitors to Oregon state parks and by employees of the State Parks and Recreation Department currently contribute approximately $549 million each year to local economies throughout Oregon. The acquisition, development, improvement, upgrading, preservation and expansion of the capacity of facilities of the system of state parks, including parks, park facilities, ocean shores, scenic waterways, trails and historic sites in the State of Oregon, do and will accomplish the purpose of creating jobs and furthering economic development in Oregon by:

(a) Increasing the capacity, usefulness and attractive qualities of public recreational facilities, thereby promoting travel and tourism in Oregon;

(b) Generating business for and supporting the operations and prosperity of businesses located in the areas of the public recreational facilities; and

(c) Creating employment opportunities within this state through the funding of development and improvement projects on which workers will be employed.

(2) Based on the findings made in this section, the use of the net proceeds from the operation of the Oregon State Lottery [for the purposes] to fund state park projects and to pay state park lottery bonds described in ORS 390.063 is an appropriate use of state lottery funds under section 4, Article XV of the Oregon Constitution, and ORS 461.510.

SECTION 24. ORS 285B.530 is amended to read:

285B.530. As used in ORS 285B.530 to 285B.548, unless the context requires otherwise:

[(2) "Bond-related costs" means:]

[(a) The costs and expenses of issuing, administering and maintaining lottery bonds and the lottery bond program, such as paying or redeeming lottery bonds, paying amounts due in connection with credit enhancements and any instruments authorized by ORS 285B.545 (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 United States in connection with lottery bonds; and]

[(3) "Lottery bonds" means:]

[(a) All infrastructure lottery bonds; and]

[(b) Any refunding lottery bonds.]

[(4) "Infrastructure Lottery Bond Fund" means the fund created by ORS 285B.536.]

[(5) "Infrastructure Lottery Bond Administrative Fund" means the fund created by ORS 285B.539.]

[(6) "Refunding lottery bonds" means any bonds issued for the purpose of refunding any lottery bonds.]

[(7)] (1) "Infrastructure lottery bonds" means the bonds authorized to be issued under ORS 285B.533 [and 285B.545] for the purpose of financing infrastructure projects.

[(8)] (2) "Infrastructure projects" includes:

(a) A water project defined in ORS 285B.560; and

(b) Payment of any state financial obligations to the Federal Government under the Safe Drinking Water Act.

[(9) "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 the 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]

[(10) "Westside lottery bonds" means the bonds issued by the state pursuant to the authority granted in ORS 391.140 that, notwithstanding any provisions of ORS 285B.530 to 285B.548, shall have a claim on lottery funds that is superior to the claim of the lottery bonds authorized by ORS 285B.530 to 285B.548.]

SECTION 25. ORS 285B.533 is amended to read:

285B.533. (1) Infrastructure lottery bonds shall be issued under sections 1 to 9 of this 1999 Act only at the request of the Director of the Economic 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 Development Department for the State of Oregon's match of federal moneys under the Safe Drinking Water Act.

(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 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 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 26. ORS 348.696 is amended to read:

348.696. The Education Endowment Fund is established separate and distinct from the General Fund. Moneys in the fund shall be invested as provided in ORS 293.701 to 293.790. All earnings on moneys in the fund shall be transferred and appropriated continuously in the following amounts:

(1) 75 percent of the earnings to the [State School Fund] Oregon Education Fund established by section 8 of this 1999 Act; and

(2) 25 percent of the earnings to the State Scholarship Commission for need grants awarded under ORS 348.260.

SECTION 27. ORS 348.696, as amended by section 11, chapter 612, Oregon Laws 1997, is amended to read:

(1) 75 percent of the earnings to the [School Capital Construction, Maintenance and Technology Fund] Oregon Education Fund established by section 8 of this 1999 Act; and

(2) 25 percent of the earnings to the State Scholarship Commission for need grants awarded under ORS 348.260.

SECTION 28. Nothing in the amendments to ORS 348.696 by section 26 or 27 of this 1999 Act affects the operative date provisions of section 12, chapter 612, Oregon Laws 1997.

SECTION 29. ORS 285B.536, 285B.539, 285B.542, 285B.545, 287.024, 287.026, 327.715, 327.718, 327.721, 327.724, 327.727, 327.736, 390.070, 390.073, 390.075, 390.077 and 390.080 are repealed.

SECTION 30. This 1999 Act being necessary for the immediate preservation of the public peace, health and safety, an emergency is declared to exist, and this 1999 Act takes effect July 1, 1999.

Approved by the Governor April 19, 1999

Filed in the office of Secretary of State April 19, 1999

Effective date July 1, 1999

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