Bill Text: OR HB2301 | 2013 | Regular Session | Engrossed
Bill Title: Relating to public borrowing; declaring an emergency.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Failed) 2013-07-08 - In committee upon adjournment. [HB2301 Detail]
Download: Oregon-2013-HB2301-Engrossed.html
77th OREGON LEGISLATIVE ASSEMBLY--2013 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 2460
A-Engrossed
House Bill 2301
Ordered by the House April 12
Including House Amendments dated April 12
Sponsored by Representative READ (Presession filed.)
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.
{ - Establishes task force to review borrowing practices of
public bodies and make recommendations about capacity and
priorities for financing public property or activities. - }
{ - Sunsets task force on date of convening of 2015 regular
session of Legislative Assembly. - }
{ + Establishes 10-year capital planning process for capital
projects. + }
Clarifies definition of 'bond' to eliminate conflict with
provision related to financing agreements.
Declares emergency, effective on passage.
A BILL FOR AN ACT
Relating to public borrowing; creating new provisions; amending
ORS 286A.001; and declaring an emergency.
Be It Enacted by the People of the State of Oregon:
SECTION 1. { + The Legislative Assembly finds and declares
that:
(1) Infrastructure in the State of Oregon is in need of
modernization, expansion and repair.
(2) Adequate public infrastructure is essential to restoring
and maintaining a vibrant 21st century economy in the State of
Oregon.
(3) Oregon's economy is recovering from a recession and, as
outstanding indebtedness is paid, Oregon will have a growing
capacity to invest in capital assets to improve government
efficiency, service public needs and support ongoing growth in
the economy.
(4) Over the next 10 years, the State of Oregon will have the
financial capacity to finance nearly $5 billion of capital
investments in infrastructure supported by General Fund moneys
and the net proceeds of the Oregon State Lottery while protecting
Oregon's bond rating.
(5) To achieve the objectives of making strategic investments
in our future through a process that leads to optimal investments
with the greatest return for its residents, the State of Oregon
must:
(a) Develop a greater capacity to identify the benefits of
capital projects that support our future;
(b) Develop new methods for selecting and financing projects
that optimize capital investment opportunities, control future
costs and reduce the risk of excessive borrowing; and
(c) Increase our capacity to institute best practices for
capital project identification and screening, analysis of
returns, procurement and optimization of design, use and
financing. + }
SECTION 2. { + (1) The Oregon Department of Administrative
Services shall create and maintain a capital planning process for
financing capital projects to be paid from General Fund moneys
and from the net proceeds of the Oregon State Lottery. The
Capital Infrastructure and Investment Plan must prioritize the
utilization of debt capacity over a 10-year period for executive
branch planning and for the purposes of assisting:
(a) The Governor in recommending, after consultation with the
State Treasurer, the prudent maximum amount of bonds to be issued
for each bond program under ORS 286A.035; and
(b) The Legislative Assembly in determining the total amount of
bonds the State Treasurer may issue for each related agency under
ORS 286A.035.
(2) The 10-year plan required by this section must:
(a) Direct the development of a capital planning process that
identifies Oregon's highest value capital investments and
provides a sustained and consistent process for financing
projects that align with the achievement of statewide strategic
outcomes identified in the plan.
(b) Be based upon projected sustainable financial resources and
within prudent financial requirements and conventions to protect
the state's credit rating based on the advice of the State Debt
Policy Advisory Commission pursuant to ORS 286A.255.
(c) Establish a smoothing methodology that ensures sustained
available debt capacity on an ongoing basis over the 10-year
planning period that:
(A) Accounts for cyclical fluctuations related to volatile
income tax collections; and
(B) Establishes prudent strategic reserve recommendations that
reserve debt capacity to support emergent economic opportunities
and other immediate opportunities that leverage capital
investment.
(d) Be developed in conjunction with capital planning processes
for:
(A) Projects financed with moneys in the State Highway Fund and
other transportation planning processes; and
(B) Any other state infrastructure planning.
(3) Subject to periodic review and adjustment by the department
pursuant to strategies adopted in the 10-year plan, the
allocation of planned debt capacity must be distributed among:
(a) Education infrastructure;
(b) State infrastructure;
(c) Regional and community economic development and
infrastructure; and
(d) Reserves for innovative or emergent economic opportunities.
(4) Among the criteria for prioritization of debt capacity for
infrastructure to be planned and financed:
(a) Education infrastructure must advance identified goals to
improve access to education, increase capacity to provide
education and make other improvements in this state's ability to
deliver education to Oregonians.
(b) State infrastructure must assist the State of Oregon to
deliver government services to Oregonians in an efficient and
cost-effective manner.
(c) Regional and community economic development and
infrastructure must support and advance statewide economic
development policy and stimulate the growth of regional and local
economies throughout Oregon.
(5) The department:
(a) May assign a coordinator for the capital planning process
and may assign specific state agencies to take the lead in
planning for specific categories established in subsection (3) of
this section; and
(b) Shall facilitate regional and local development projects by
providing technical assistance to public bodies, as defined in
ORS 174.109, and coordination for capital projects financed, in
whole or in part, with public moneys.
(6) The department is not required to take action under this
section in biennia in which moneys are not appropriated for the
purpose in the legislatively approved budget for the
department. + }
SECTION 3. ORS 286A.001 is amended to read:
286A.001. As used in this chapter:
(1) 'Agreement for exchange of interest rates' means a
contract, or an option or forward commitment to enter into a
contract, for the exchange of interest rates that provides for:
(a) Payments based on levels of or changes in interest rates;
or
(b) Provisions to hedge payment, rate, spread or similar
exposure including, but not limited to, an interest rate floor or
cap or an option, put or call.
(2) 'Bond':
(a) Means a contractual undertaking or instrument of the State
of Oregon to repay borrowed moneys.
{ - (b) Does not mean a financing agreement, as defined in
ORS 283.085, if the principal amount of the agreement is $100,000
or less, or a credit enhancement device. - }
{ + (b) Does not mean:
(A) A credit enhancement device; or
(B) An agreement that satisfies the definition of a financing
agreement under ORS 283.085 but is authorized by a provision of
law other than ORS 283.085 to 283.092, when the principal amount
of the agreement is $100,000 or less. + }
(3) 'Counterparty' means an entity with whom the State of
Oregon enters into an agreement for exchange of interest rates.
(4) 'Credit enhancement device':
(a) Means a letter of credit, line of credit, standby bond
purchase agreement, bond insurance policy, reserve surety bond or
other device or facility used to enhance the creditworthiness,
liquidity or marketability of bonds or agreements for the
exchange of interest rates; and
(b) Does not mean a bond.
(5) 'Credit enhancement device fee' means a payment required to
be made to the provider of a credit enhancement device securing a
bond or securing an agreement for the exchange of interest rates.
(6) 'General obligation bond' means a bond that constitutes
indebtedness of the state under { - section 7, - } Article
XI { + , section 7, + } of the Oregon Constitution, and that is
exempt from the $50,000 limitation on indebtedness set forth in
that section.
(7) 'Operative document' means a bond declaration, trust
agreement, indenture, security agreement or other document in
which the State of Oregon pledges property as security for an
obligation, as defined in ORS 286A.100.
(8) 'Refunding bond' means a bond of the State of Oregon that
is issued to refund another bond, regardless of whether the
refunding is on a current, advance, forward delivery, synthetic
or other basis.
(9) 'Related agency' means the state agency that requests the
State Treasurer to issue bonds pursuant to ORS 286A.025 or for
which the State Treasurer has issued bonds.
(10) 'Related bond' means a bond for which the State of Oregon
enters into an agreement for exchange of interest rates.
(11) 'Revenue' means all fees, tolls, excise taxes,
assessments, property taxes and other taxes, rates, charges,
rentals and other income or receipts derived by a state agency or
to which a state agency is entitled.
(12) 'Revenue bond' means a bond of the State of Oregon that is
not a general obligation bond.
(13) 'State agency':
(a) Includes a statewide elected officer, board, commission,
department, division, authority or other entity, without regard
to the designation given to the entity, that is within state
government, as defined in ORS 174.111; and
(b) Does not include:
(A) A statewide elected judge;
(B) The State Treasurer;
(C) A local government, as defined in ORS 174.116;
(D) The Oregon Health and Science University;
(E) A special government body, as defined in ORS 174.117,
except to the extent a special government body must be considered
a state agency in order to achieve the purposes of Article XI-K
of the Oregon Constitution; or
(F) A semi-independent state agency listed in ORS 182.454,
377.835 or 674.305, or any other state agency denominated by
statute as a semi-independent state agency.
(14) 'Termination payment' means the amount payable under an
agreement for exchange of interest rates by one party to another
party as a result of the termination, in whole or part, of the
agreement prior to the expiration of the stated term.
SECTION 4. { + This 2013 Act being necessary for the immediate
preservation of the public peace, health and safety, an emergency
is declared to exist, and this 2013 Act takes effect on its
passage. + }
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