Bill Text: OR SB20 | 2011 | Regular Session | Enrolled

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Bill Title: Relating to public borrowing.

Spectrum: Unknown

Status: (Passed) 2011-06-07 - Effective date, January 1, 2012. [SB20 Detail]

Download: Oregon-2011-SB20-Enrolled.html

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     76th OREGON LEGISLATIVE ASSEMBLY--2011 Regular Session

                            Enrolled

                         Senate Bill 20

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 State Treasurer Ted Wheeler
  for Municipal Debt Advisory Commission)

                     CHAPTER ................

                             AN ACT

Relating to public borrowing; amending ORS 287A.300, 287A.360,
  287A.365, 305.583 and 441.555.

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

  SECTION 1. ORS 287A.360 is amended to read:
  287A.360. (1) In addition to any other authority to issue
refunding bonds, a public body may issue current refunding bonds
to refund  { + or purchase + } its outstanding bonds
 { - pursuant to this section - } .
  (2) A public body may secure current refunding bonds with any
of the revenues and covenants that the public body could have
used to secure the refunded  { + or purchased + } bonds
 { + under the law in effect when the refunded or purchased bonds
were issued + } and with revenues and covenants   { - authorized
by law when the refunding bonds are issued. - }  { +  that the
public body could have used to secure the refunded or purchased
bonds if the laws that are in effect when the current refunding
bonds are issued were in effect when the refunded or purchased
bonds were issued. + }
  (3) A public body may   { - issue - }  { +  authorize current
refunding bonds by resolution or ordinance without complying with
the procedural requirements that applied to the refunded or
purchased bonds, including issuing + }:
  (a) General obligation bonds to refund  { + or purchase + }
outstanding general obligation bonds without obtaining approval
of the electors of the public body.
  (b) Revenue bonds to refund  { + or purchase + } revenue bonds
that were issued in accordance with ORS 287A.150 without
complying with the procedures prescribed in ORS 287A.150.
   { +  (4) The maturities of current refunding bonds authorized
by this section may not exceed by more than six months:
  (a) Maturity limits that were established by the electors for
the refunded or purchased bonds; and
  (b) A maturity limit imposed by a provision of a constitution,
charter or statute that applied to the refunded or purchased
bonds, if the provision imposing the limit is in effect when the
current refunding bonds are issued. + }
  SECTION 2. ORS 287A.365 is amended to read:

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  287A.365. (1) The Legislative Assembly declares that the
issuance of advance refunding bonds and the authority to effect a
forward current refunding are matters of general statewide
concern, and ORS 287A.360 to 287A.380 preempt all local statutory
or charter authority to issue advance refunding bonds or to
effect a forward current refunding.
  (2) A public body may issue advance refunding bonds or enter
into forward current refundings in compliance with:
  (a) ORS 287A.360 to 287A.380; and
  (b) Rules adopted by the State Treasurer.
  (3) A public body may secure advance refunding bonds  { + and
forward current refunding bonds + } with any of the revenues and
covenants that the public body could have used to secure the
refunded bonds  { + under the law in effect when the refunded
bonds were issued + } and with revenues and covenants
 { - authorized by law when the refunding bonds are issued. - }
 { + that the public body could have used to secure the refunded
bonds if the laws that are in effect when the refunding bonds are
issued were in effect when the refunded bonds were issued.
  (4) The maturities of advance refunding bonds and forward
current refunding bonds authorized by this section may not exceed
by more than six months:
  (a) Maturity limits that were established by the electors for
the refunded bonds; and
  (b) A maturity limit imposed by a provision of a constitution,
charter or statute that applied to the refunded bonds, if the
provision imposing the limit is in effect when the refunding
bonds are issued. + }
  SECTION 2a. ORS 287A.300 is amended to read:
  287A.300. (1) Notwithstanding   { - a limitation in - }  a
local charter { +  or statutory limitation + }, when a public
body is authorized by law to issue bonds, the public body may:
  (a) Combine bonds authorized by different laws or actions of
the governing body into a single issue and use a single
disclosure document if the bonds in the issue will have the same
security, or may use a single disclosure document for bonds
authorized by different laws or actions of the governing body if
the bonds have different security.
  (b) Structure, market and issue bonds in the manner that the
public body determines is in the best interest of the people
served by the public body.
  (c) Sell bonds at a competitive sale or a negotiated sale or in
any other manner determined by the public body.
  (d) Issue bonds the interest on which is exempt from federal
income taxes or is not exempt from federal income taxes.
  (e) Establish the maturity dates for bonds to provide for
short-term, interim or long-term borrowing and establish the
principal amounts, redemption provisions, optional or mandatory
tender provisions, interest rates or method for determining a
variable or adjustable interest rate, denominations and other
terms and conditions of the bonds.
  (f) Determine the form and content of bond disclosure
documents.
  (g) Enter into an agreement with and retain the services of
bond counsel and other providers of bond-related services.
  (h) Execute and deliver indentures, bond purchase agreements,
trust agreements, remarketing agreements, auction agent
agreements, broker dealer agreements, tender agent agreements,
escrow agreements and other contracts related to the sale,
issuance, security for or administration of the bonds.

Enrolled Senate Bill 20 (SB 20-A)                          Page 2

  (i) Enter into agreements with bond trustees and deposit moneys
with trustees for the benefit of bond owners and the providers of
credit enhancement devices for bonds.
  (j) Enter into covenants for the benefit of bond owners or the
providers of credit enhancement devices or agreements for
exchange of interest rates, including but not limited to
covenants regarding the issuance of additional bonds and rate
covenants.
  (k) Enter into covenants for the benefit of owners of bonds
that are intended to allow bonds to bear interest that is
excludable from gross income under the federal Internal Revenue
Code or that is otherwise exempt from taxation by the United
States.
  (L) Take action to comply with covenants.
  (m) Establish bond debt service reserves.
  (n) Fund debt service reserves out of bond proceeds or from
other revenues.
  (o) Specify the individuals who may sign the bonds on behalf of
the public body.
  (2) When the Oregon Constitution, a charter, a statute, an
ordinance or a resolution authorizes a public body to spend bond
proceeds for a particular purpose, the public body may also spend
bond proceeds to finance costs of issuing, administering and
repaying the bonds, including costs of the services of bond
counsel or other providers of bond-related services, and to pay
the costs of a credit enhancement device or agreement for
exchange of interest rates.
  (3) When a public body redeems bonds, the public body shall
give notice of redemption in the manner specified in the
documents authorizing the bonds to be redeemed.
  (4) A public body may delegate to an elected or appointed
official or an employee of the public body the authority to take
an action described in subsection (1) of this section.
  (5) Except as provided otherwise in this subsection, at least
one of the signatures of bond signatories must be provided in
manual form. However, if the bonds are to be authenticated by at
least one signature in manual form, all signatures of bond
signatories may be in facsimile form.
  SECTION 3. ORS 305.583 is amended to read:
  305.583. (1) An interested taxpayer may petition the regular
division of the Oregon Tax Court to determine a question
described in ORS 305.580.
  (2)(a) For purposes of this section and a question described in
ORS 305.580 (1)(a), 'interested taxpayer' means a person that is
subject to the tax, fee, charge or assessment in question.
  (b) For purposes of this section and a question described in
ORS 305.580 (1)(b), 'interested taxpayer' means a person that is
subject to a tax, fee, charge or assessment that is pledged to
secure or available for payment of bonded indebtedness described
in section 11 (11)(d), Article XI of the Oregon Constitution.
  (3) The petition shall be filed and perfected in the following
manner only:
  (a) The petitioner shall file a petition with the clerk of the
tax court at its principal office in Salem, Oregon. The petition
shall name as respondent the government unit that imposes the
tax, fee, charge or assessment, that issues the bonded
indebtedness or, in the case of an urban renewal agency, that
receives the taxes. The filing in the tax court shall constitute
the perfection of the petition. The clerk of the tax court shall
serve the government unit by mailing a copy of the petition to

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the recording officer or chief administrative officer of the
local government unit or to the Attorney General if the tax, fee,
charge or assessment in question is imposed by the State of
Oregon. The clerk also shall serve a copy of any petition naming
a local government unit as respondent upon the Oregon Department
of Justice.
  (b) The petition shall state the facts and grounds upon which
the petitioner contends that the tax, fee, charge or assessment
is affected by section 11 or 11b, Article XI of the Oregon
Constitution, or that a use of the proceeds of bonded
indebtedness is not authorized. The case shall proceed thereafter
in the manner provided for appeals concerning ad valorem property
tax assessments. ORS 305.405 to 305.494 shall apply to such
actions.
  (4)(a) Except as provided in subsections (5) to (8) of this
section, in the case of a question regarding the effect of the
limits of section 11b, Article XI of the Oregon Constitution, on
any tax, fee, charge or assessment that is imposed under a
resolution or ordinance approved by the governing body of a local
government unit, the petition shall be filed within 60 days after
the action of the governing body approving the ordinance or
resolution, adopting a new ordinance or resolution or changing an
existing ordinance or resolution under which the tax, fee, charge
or assessment is imposed, if the resolution or ordinance includes
a classification of the tax, fee, charge or assessment as subject
to or not subject to section 11 or 11b, Article XI of the Oregon
Constitution. If the local government unit has not classified the
tax, fee, charge or assessment, the petition shall be filed
within 60 days after the later of:
  (A) The last date, but no later than November 15, that the tax
statements were mailed for the tax year in which the tax, fee,
charge or assessment was imposed; or
  (B) The date of imposition of the tax, fee, charge or
assessment on the petitioner.
  (b) If the local government unit adopts an ordinance or
resolution classifying all or any of the taxes, fees, charges or
assessments it imposes as subject to or not subject to section 11
or 11b, Article XI of the Oregon Constitution, as described in
ORS 310.145, the petition shall be filed within 60 days after the
governing body adopts the ordinance or resolution.
  (5) In the case of a question concerning any tax, fee, charge
or assessment that is characterized by the local government unit
as an assessment for local improvements, the petition shall be
filed within 60 days after the local government unit gives notice
of its intention to characterize the charge as an assessment for
local improvements. Notice may be given to affected property
owners by the local government unit either when a local
improvement district is formed, in a notice of intent to assess
given by the local government unit or by other individual notice
prior to assessment. Notice shall be given no later than the date
the assessment is imposed. Notice given as provided under this
subsection is in lieu of the notice required under subsection (9)
of this section.
  (6) In the case of a question concerning any taxes levied to
pay principal and interest on bonded indebtedness approved by the
governing body of a local government unit, the petition shall be
filed within 60 days after the date the issuance of the bonded
indebtedness was approved by the governing body of the local
government unit if the resolution or ordinance of the governing
body authorizing issuance of the bonded indebtedness includes a

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classification of the bonded indebtedness as subject to or not
subject to the limits of section 11 or 11b, Article XI of the
Oregon Constitution. If the local government unit has not
classified the bonded indebtedness, the petition shall be filed
within 60 days after the date specified in subsection (4)(a) of
this section.
  (7) In the case of a question concerning any taxes levied to
pay principal and interest on bonded indebtedness not subject to
the limits of section 11 or 11b, Article XI of the Oregon
Constitution, that was approved by the electors of the local
government unit at an election held on or after September 29,
1991, the petition shall be filed within 60 days after the date
of the election at which the question of issuing the bonded
indebtedness was approved by the electors of the local government
unit.
  (8) In the case of a question concerning the effect of section
11 or 11b, Article XI of the Oregon Constitution, on any tax,
fee, charge or assessment imposed by the state, the petition
shall be filed within 60 days after the first imposition of the
tax, fee, charge or assessment by a state agency. For purposes of
this subsection, a tax, fee, charge or assessment shall be
considered imposed when it is due as provided by statute or when
the state agency notifies a person that the tax, fee, charge or
assessment is due.
  (9) A local government unit:
  (a) Shall give notice of its adoption of an ordinance or
resolution classifying any of its taxes, fees, charges or
assessments as not being subject to the limits of section 11 or
11b, Article XI of the Oregon Constitution, by publishing, within
15 days after adoption of the ordinance or resolution, an
advertisement in a newspaper of general circulation in the county
in which the local government unit is located or, if there is no
newspaper of general circulation, in a newspaper of general
circulation in a contiguous county.
  (b) May give notice of its adoption of an ordinance or
resolution specifying the authorized uses of the proceeds of
bonded indebtedness by publishing, within 15 days after adoption
of the ordinance or resolution, an advertisement in a newspaper
of general circulation in the county in which the local
government unit is located or, if there is no newspaper of
general circulation, in a newspaper of general circulation in a
contiguous county.
  (10) A notice described in subsection (9) of this section
shall:
  (a) Appear in the general news section of the newspaper, not in
the classified advertisements;
  (b) Measure at least three inches square;
  (c) Be printed in a type size at least equal to 8-point type;
and
  (d) State that the local government unit has adopted a
resolution or ordinance:
  (A) Classifying one or more of its taxes, fees, charges or
assessments as not being subject to the limits of section 11 or
11b, Article XI of the Oregon Constitution, that the reader may
contact a designated individual within the local government unit
to obtain a copy of the ordinance or resolution and that judicial
review of the classification of the taxes, fees, charges or
assessments may be sought within 60 days of the date of the
resolution or ordinance; or

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  (B) Specifying the authorized uses of the proceeds of bonded
indebtedness, that the reader may contact a designated individual
within the local government unit to obtain a copy of the
ordinance or resolution and that judicial review of the
specification of authorized uses may be sought within 60 days of
the date of the resolution or ordinance.
  (11) An ordinance or resolution that results in a mere change
in the amount of a tax, fee, charge or assessment and does not
result in a change in the characteristics or attributes of the
tax, fee, charge or assessment, or contain a change in purpose to
which the revenue is applied, may not be considered a change that
may result in a proceeding commenced under subsection (4) of this
section.
    { - (12) In the case of a question concerning the authorized
uses of the proceeds of bonded indebtedness, the petition must be
filed within 60 days after publication of the notice described in
subsection (9)(b) of this section or, if the governing body has
not published the notice described in subsection (9)(b) of this
section, the petition must be filed within 180 days after the
questioned use of the proceeds is made. - }
   { +  (12) In the case of a question concerning the authorized
uses of the proceeds of bonded indebtedness, the petition must be
filed within 60 days after the adoption of the ordinance or
resolution described in subsection (9)(b) of this section or, if
the governing body has not published the notice described in
subsection (9)(b) of this section, the petition must be filed
within 180 days after the questioned use of the proceeds is
made. + }
  SECTION 4. ORS 441.555 is amended to read:
  441.555. (1) To accomplish its purposes, an authority shall
have the power to issue revenue obligations payable from the
revenues derived by it from repayment of loans or from its
ownership or sale of any one or more hospital facilities. The
issuance of   { - such - }  revenue obligations   { - shall
be - }   { + is + } governed by the provisions of subsections (2)
to (8) of this section, and
  { - shall not be - }   { + is not + } subject to the prior
approval of the electors of the municipality.
  (2) The authority shall issue revenue obligations only by bond
resolution duly adopted by its board of directors. The bond
resolution shall specify the public purposes for which the
proceeds of the revenue obligations shall be expended, declare
the estimated cost of carrying out such purposes, contain such
covenants, and provide for the issuance and sale of revenue
obligations in such form and amount as the directors determine.
In declaring such cost, the directors may include the funds
necessary for working capital during construction, reserves,
interest during construction, the payment of organizational,
planning, financing and legal expenses, the repayment of advances
and the start-up costs. The bond resolution may provide that
hospital facilities subsequently acquired or constructed by the
authority shall be deemed betterments or additions to, or
extensions of, the specified hospital facility, whether or not
physically connected.
  (3) The bond resolution shall provide for the establishment of
one or more special funds, and such funds may be under the
control of the board or one or more trustees. The bond resolution
shall obligate the authority to deposit and expend the proceeds
of the revenue obligations only into and from such fund or funds,
and to set aside and pay into such fund or funds any fixed

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proportion or fixed amount of the revenues derived by it from any
or all of its hospital facilities or other corporate activities,
as the board finds in the best interest of the authority and the
payment of its obligations. The authority may issue and sell
revenue obligations payable as to interest and principal only out
of such fund or funds.
  (4) Any revenue obligations issued against any fund or funds
provided for in subsection (3) of this section shall be a valid
claim of the holder thereof only as against such special fund or
funds, the proportion or amount of the revenues pledged to such
fund or funds and such assets as the authority may have pledged.
Each such revenue obligation shall state on its face that it is
payable from a special fund or funds, naming the fund or funds
and the resolution creating it or them.
  (5) Any pledge of revenues or other moneys or obligations or
assets made by an authority shall be valid and binding from the
time that the pledge is made against any parties having
subsequent claims of any kind in tort, contract, or otherwise
against an authority, irrespective of whether such parties have
actual notice thereof. The pledge shall be noted in the
authority's minute book which shall be constructive notice
thereof to all parties and neither the resolution nor other
instrument by which a pledge is created need be otherwise
recorded, nor shall the filing of any financing statement under
the Uniform Commercial Code be required to perfect such pledge.
Revenues or other moneys or obligations or assets so pledged and
later received by an authority shall immediately be subject to
the lien of the pledge without any physical delivery or further
act.
  (6) The revenue obligations issued under the provisions of
subsections (1) to (5) of this section shall bear such date or
dates, mature at such time or times, be in such denominations, be
in such form, either coupon or registered or both, carry such
registration privileges, be made transferable, exchangeable and
interchangeable, be payable in such medium, at such place or
places, contain such covenants, and be subject to such terms of
redemption as the board of directors shall declare in the bond
resolution.
  (7) Notwithstanding any other provision of law, the revenue
obligations issued by an authority may be sold by the board of
directors upon such terms and conditions and at such rate or
rates of interest and for such price or prices as it may deem
most advantageous to the authority, with or without public
bidding. The authority may make contracts for future sale from
time to time of revenue obligations by which the contract
purchasers shall be committed to the prices, terms and conditions
stated in such contract, and the board of directors may pay such
consideration as it deems proper for such commitments.
  (8) The board of directors may provide by resolution for the
issuance of funding and refunding revenue obligations in order to
  { - take up and - }  refund { + , convert, purchase or
restructure  + }any one or more series, or portion of a series,
of outstanding revenue obligations at such time or times as it
may determine. Such refunding revenue obligations may be sold or
exchanged at par or otherwise as the board of directors
determines is in the best interest of the authority.
  (9) All revenue obligations issued pursuant to this section
shall be legal securities   { - which - }   { + that + } may be
used by any insured institution or trust company, as those terms
are defined in ORS 706.008, for deposit with the State Treasurer

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or a county treasurer or city treasurer, as security for deposits
in lieu of a surety bond under any law relating to deposits of
public moneys and shall constitute legal investments for public
bodies, trustees and other fiduciaries, banks, savings and loan
associations, and insurance companies. All such revenue
obligations and all coupons appertaining thereto shall be
negotiable instruments within the meaning of and for all purposes
of the law of this state.
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Passed by Senate May 2, 2011

    .............................................................
                               Robert Taylor, Secretary of Senate

    .............................................................
                              Peter Courtney, President of Senate

Passed by House May 25, 2011

    .............................................................
                                    Bruce Hanna, Speaker of House

    .............................................................
                                   Arnie Roblan, Speaker of House

Enrolled Senate Bill 20 (SB 20-A)                          Page 8

Received by Governor:

......M.,............., 2011

Approved:

......M.,............., 2011

    .............................................................
                                         John Kitzhaber, Governor

Filed in Office of Secretary of State:

......M.,............., 2011

    .............................................................
                                   Kate Brown, Secretary of State

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