Bill Text: OR SB115 | 2011 | Regular Session | Introduced
Bill Title: Relating to borrowing for the Oregon University System; appropriating money.
Spectrum: Unknown
Status: (Failed) 2011-06-30 - In committee upon adjournment. [SB115 Detail]
Download: Oregon-2011-SB115-Introduced.html
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 622
Senate Bill 115
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 John A. Kitzhaber
for Oregon University System)
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.
Modifies statutory basis for Oregon University System to cause
issuance of higher education revenue bonds.
Establishes Higher Education Revenue Bond Project Fund, Higher
Education Revenue Bond Fund and Higher Education Revenue Bond
Administration Fund. Continuously appropriates moneys in funds to
Oregon University System to finance projects, to refund bonds
issued for projects and to pay bond-related costs.
A BILL FOR AN ACT
Relating to borrowing for the Oregon University System; creating
new provisions; amending ORS 351.317, 351.450, 351.455 and
351.460; repealing ORS 351.315; and appropriating money.
Be It Enacted by the People of the State of Oregon:
SECTION 1. { + As used in sections 1 to 3 of this 2011 Act:
(1) 'Bond-related costs' means:
(a) The costs and expenses of issuing, administering and
maintaining higher education revenue bonds including, but not
limited to, the costs of:
(A) Paying or redeeming higher education revenue bonds.
(B) Paying amounts due in connection with credit enhancement
devices or agreements for exchange of interest rates.
(C) Paying the fees, administrative costs and expenses of the
State Treasurer and the Oregon University System, including the
costs of consultants or advisors retained by the State Treasurer
or the Chancellor of the Oregon University System, for the higher
education revenue bonds.
(b) The costs of funding reserves for the higher education
revenue bonds.
(c) Capitalized interest for the higher education revenue
bonds.
(d) Rebates or penalties due to the United States in connection
with the higher education revenue bonds.
(e) Any other costs or expenses that the State Treasurer or the
Chancellor of the Oregon University System determines are
necessary or desirable in connection with issuing and maintaining
the higher education revenue bonds.
(2) 'Higher education revenue bonds' means revenue bonds issued
pursuant to section 2 of this 2011 Act.
(3) 'Higher education revenues' includes:
(a) Tuition, fees and charges imposed or collected by the
Oregon University System, or by one of the universities in the
system; and
(b) Moneys appropriated, allocated or otherwise made available
to the Oregon University System, or to one of its universities,
by the Legislative Assembly, if those moneys are lawfully
available to pay the bond-related costs of higher education
revenue bonds. + }
SECTION 2. { + (1) At the request of the Chancellor of the
Oregon University System, the State Treasurer may issue, as
provided in ORS chapter 286A, higher education revenue bonds from
time to time, the net proceeds of which must be used to:
(a) Finance projects that the State Board of Higher Education
determines will assist the Oregon University System in carrying
out its statutory powers;
(b) Refund bonds issued for the projects; and
(c) Pay bond-related costs.
(2) The Chancellor of the Oregon University System, with the
approval of the State Treasurer, may:
(a) Pledge all or a portion of the higher education revenues,
pursuant to ORS 286A.102, to secure higher education revenue
bonds, credit enhancement devices or agreements for the exchange
of interest rates, identifying the specific higher education
revenues that will be pledged to secure each series of higher
education revenue bonds and specifying the status of the lien of
each pledge.
(b) Enter into covenants, pursuant to ORS 286A.025 (4)(c), on
behalf of the State of Oregon for the benefit of owners of higher
education revenue bonds, providers of credit enhancement for
higher education revenue bonds and counterparties to agreements
for exchange of interest rates to:
(A) Adjust the rates, charges or fees that produce higher
education revenues so that higher education revenues equal or
exceed specified levels during specified periods.
(B) Create only those pledges or liens on higher education
revenues that are permitted by the covenants authorized by this
section.
(C) Budget and apply, or otherwise allow, higher education
revenues to be applied in amounts that, when added to other
moneys lawfully available for the purpose, will be sufficient:
(i) To pay in full and when due the principal, interest and
premium on outstanding higher education revenue bonds;
(ii) To pay amounts due in connection with agreements for
exchange of interest rates and credit enhancement devices for
higher education revenue bonds; and
(iii) To maintain the balance required by covenants in any debt
service reserves established for the higher education revenue
bonds.
(c) Own and operate the properties of the Oregon University
System in compliance with the higher education revenue bond
covenants until all higher education revenue bonds are paid or
defeased.
(3) Higher education revenue bonds are not a debt or a general
obligation of the State of Oregon or the Oregon University System
and neither the full faith and credit nor the taxing power of the
State of Oregon may be pledged to secure or pay the revenue
bonds.
(4) The State Treasurer and the Oregon University System do not
have an obligation to pay bond-related costs except as provided
in sections 1 to 3 of this 2011 Act. A holder of higher education
revenue bonds issued under this section does not have the right
to compel the exercise of the taxing power of the State of Oregon
to pay bond-related costs.
(5) As long as any higher education revenue bonds issued under
this section are outstanding, covenants related to the revenue
bonds are deemed to be contracts between the State of Oregon and
holders of the revenue bonds. The State of Oregon may not give
force or effect to a statute or initiative or referendum measure
approved by the electors of this state, if doing so would
unconstitutionally impair existing covenants made with the
holders of existing higher education revenue bonds or would
unconstitutionally impair other obligations or agreements
regarding the security of revenue bonds to which the moneys
deposited in the fund are pledged and assigned. + }
SECTION 3. { + The Higher Education Revenue Bond Project Fund
is established in the State Treasury, separate and distinct from
the General Fund. The Higher Education Revenue Bond Project Fund
consists of net proceeds of higher education revenue bonds issued
under section 2 of this 2011 Act and other moneys made available
for the purposes described in section 2 (1) of this 2011 Act.
Moneys in the Higher Education Revenue Bond Fund may be invested
as provided in ORS 293.701 to 293.820, and interest earned by
moneys in the fund shall be credited to the fund. Moneys in the
fund are continuously appropriated to the Oregon University
System for the purposes described in section 2 (1) of this 2011
Act. + }
SECTION 4. { + (1) The Higher Education Revenue Bond Fund is
established in the State Treasury, separate and distinct from the
General Fund. Amounts in the Higher Education Revenue Bond Fund
may be invested as provided in ORS 293.701 to 293.820, and
interest earned on the bond fund must be credited to the bond
fund. Amounts credited to the bond fund are continuously
appropriated to the Oregon University System for the purpose of
paying, when due, the principal of, the interest on and the
premium, if any, on outstanding higher education revenue bonds.
The system shall deposit in the bond fund:
(a) Capitalized or accrued interest on Article XI-Q bonds;
(b) Amounts appropriated or otherwise made available by the
Legislative Assembly for deposit in the bond fund; and
(c) Reserves established for the payment of higher education
revenue bonds.
(2) At the request of the system, the State Treasurer may
create separate accounts in the bond fund for reserves and debt
service for each series of higher education revenue bonds as
provided in ORS 286A.025 (2)(g). + }
SECTION 5. { + (1) The Higher Education Revenue Bond
Administration Fund is established in the State Treasury,
separate and distinct from the General Fund. Amounts in the
Higher Education Revenue Bond Administration Fund may be invested
as provided in ORS 293.701 to 293.820, and interest earned on the
bond administration fund must be credited to the bond
administration fund. Amounts credited to the bond administration
fund are continuously appropriated to the Oregon University
System for payment of bond-related costs. The system shall credit
to the bond administration fund:
(a) Proceeds of higher education revenue bonds that were issued
to pay bond-related costs; and
(b) Amounts appropriated or otherwise made available by the
Legislative Assembly for deposit in the bond administration fund.
(2) At the request of the system, the State Treasurer may
create separate accounts in the bond administration fund as
provided in ORS 286A.025 (2)(g). + }
SECTION 6. ORS 351.317 is amended to read:
351.317. An obligation incurred under ORS 351.140 { - or
351.315 - } is not an indebtedness of the State of Oregon and
does not create a general indebtedness of the { - State Board
of Higher Education. A bond issued by the State Treasurer at the
request of the board may be paid only from the property, income
or revenues pledged to secure its payment - } { + Oregon
University System + }.
SECTION 7. ORS 351.450 is amended to read:
351.450. (1) The { - moneys - } { + net proceeds + }
realized from sales of bonds issued to construct, improve,
repair, equip and furnish buildings and other structures for
higher education, and to purchase and improve sites
{ - therefor - } { + for buildings and other structures + },
shall be credited to a designated account in the Oregon
University System Fund established by ORS 351.506.
(2) The account designated by this section shall have:
(a) A separate subaccount for the credit of { - moneys - }
{ + net proceeds + } realized from sales of { + general
obligation + } bonds issued pursuant to Article XI-F(1) of the
Oregon Constitution and ORS 351.350; { + and + }
(b) A separate subaccount for the credit of { - moneys - }
{ + net proceeds + } realized from sales of { + general
obligation + } bonds issued pursuant to Article XI-G of the
Oregon Constitution and ORS 351.345 { - ; and - }
{ - (c) A separate subaccount for the credit of moneys
realized from the sales of revenue bonds issued pursuant to ORS
chapter 286A - } .
(3) The { - moneys - } { + net proceeds + } received from
the issuance of temporary bonds under ORS 351.470 for the purpose
of interim financing pending the sale of the bonds shall also be
credited to the appropriate subaccount of the account designated
by this section.
(4) The moneys in the account designated by this section shall
be used for the purpose of defraying the costs of the projects to
be financed through sale of the bonds and for the purpose of
retiring temporary bonds issued under ORS 351.470 and may not be
used for any other purpose unless designated for investment by
the Chancellor of the Oregon University System. If a surplus
remains after application to the purposes described in this
subsection, the surplus and earnings from temporary investments
shall be credited to the account maintained in the Oregon
University System Fund under ORS 351.460.
SECTION 8. ORS 351.455 is amended to read:
351.455. Notwithstanding any other provisions of law, the
Oregon University System may expend moneys from the appropriate
subaccount of the account in the Oregon University System Fund
designated by ORS 351.450, including { - moneys - } { + net
proceeds + } realized from the sale of { + general
obligation + } bonds issued pursuant to Article XI-F(1) of the
Oregon Constitution and ORS 351.350,
{ - and from the sale of revenue bonds authorized by ORS
351.315, - } for the planning, constructing, altering, repairing,
furnishing and equipping of buildings and facilities of the kind
and character prescribed by Article XI-F(1) of the Oregon
Constitution and for the acquisition of land.
SECTION 9. ORS 351.460 is amended to read:
351.460. (1) The State Board of Higher Education shall maintain
an account within the Oregon University System Fund established
by ORS 351.506 to provide for the payment of the principal of and
the interest upon:
(a) The { + general obligation + } bonds issued under
authority of Article XI-F(1) of the Oregon Constitution and ORS
351.350;
(b) The { + general obligation + } bonds issued under
authority of Article XI-G of the Oregon Constitution and ORS
351.345; { + and + }
{ - (c) Revenue bonds authorized by ORS 351.315; and - }
{ - (d) - } { + (c) + } Amounts due under financial
agreements entered into under ORS 351.356.
(2) The account maintained under this section comprises one
subaccount for each of the purposes of the account identified in
subsection (1) of this section.
(3) Income and interest derived from moneys in the subaccounts
of the account maintained under this section are credited to the
appropriate subaccount.
(4) The sources of moneys for the account maintained under this
section are:
(a) All moneys received from ad valorem taxes levied pursuant
to ORS 291.445;
(b) All moneys that the Legislative Assembly may provide in
lieu of { - such - } { + ad valorem + } taxes;
(c) All of the net revenues received from the projects or
undertakings for the financing of which the bonds were issued,
including gifts, grants and building fees;
(d) Unpledged revenues of buildings and projects of like
character that are allocated by the board;
(e) All moneys received as accrued interest upon bonds sold;
(f) All earnings from investments of the account;
(g) All proceeds of the sale of refunding bonds; and
(h) All moneys that the State of Oregon has agreed to hold in
the account to pay amounts due under financial agreements entered
into under ORS 351.356.
(5) The board may credit the account maintained under this
section with moneys received from either a sale or interfund
transfer of land, buildings and facilities. When the land,
buildings or facilities are sold or the use of the land,
buildings or facilities is rededicated so that a transfer from
one subaccount to another subaccount is appropriate, the moneys
received shall be credited to the appropriate subaccount.
(6) The board shall apply student building fees, revenues,
gifts and grants for the payment of the principal of and the
interest upon the bonds issued under authority of Article XI-F(1)
of the Oregon Constitution { - and upon revenue bonds
authorized by ORS 351.315 - } until { - such time as - } the
proper subaccount and investments of the subaccount, as
supplemented by expected future income will, in the judgment of
the board, be sufficient to meet in full the principal of and the
interest upon all such outstanding bonds. Except for student
building fees, income not required for the account as described
in this subsection shall be transferred to other accounts and
subaccounts within the Oregon University System Fund that are
designated by the board. Student building fees for buildings
constructed from the proceeds of { + general obligation + }
bonds issued under Article XI-F(1) of the Oregon Constitution
{ - or ORS 351.315 - } shall be applied only to
{ - those - } { + general obligation + } bonds authorized
under Article XI-F(1) of the Oregon Constitution { - or ORS
351.315 - } .
(7)(a) The board may not use the account maintained under this
section for any purpose other than the purposes for which the
account was created.
(b) Notwithstanding paragraph (a) of this subsection, the board
may transfer any surplus in the account to other accounts in the
Oregon University System Fund if a balance remains in the account
from sources other than student building fees for buildings
constructed from the proceeds of bonds issued under Article
XI-F(1) of the Oregon Constitution and:
(A) The purposes for which the account was created have been
fulfilled; or
(B) A reserve sufficient to meet all existing and future
obligations and liabilities of the account has been set aside.
SECTION 10. { + ORS 351.315 is repealed. + }
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