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 2391
Senate Bill 619
Sponsored by Senator WHITSETT
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.
Authorizes discrete investment of funds of political
subdivisions in any commingled investment pool established by
State Treasurer for investment of funds of state agencies or
county governments.
Declares emergency, effective on passage.
A BILL FOR AN ACT
Relating to discrete investment of county government funds;
amending ORS 294.035; and declaring an emergency.
Be It Enacted by the People of the State of Oregon:
SECTION 1. ORS 294.035 is amended to read:
294.035. (1) Subject to ORS 294.040 and 294.135 to 294.155, the
custodial officer may invest any sinking fund, bond fund or
surplus funds in the custody of the custodial officer in the bank
accounts, classes of securities at current market prices,
insurance contracts and other investments listed in this section,
but only after obtaining from the governing body of the county,
municipality, political subdivision or school district a written
order that has been entered in the minutes or journal of the
governing body.
(2) This section does not:
(a) Limit the authority of the custodial officer to invest
surplus funds in other investments when the investment is
specifically authorized by another statute.
(b) Apply to a sinking fund or a bond fund established in
connection with conduit revenue bonds issued by a county,
municipality, political subdivision or school district for
private business entities or nonprofit corporations.
(3) Investments authorized by this section are:
(a) Lawfully issued general obligations of the United States,
the agencies and instrumentalities of the United States or
enterprises sponsored by the United States Government and
obligations whose payment is guaranteed by the United States, the
agencies and instrumentalities of the United States or
enterprises sponsored by the United States Government.
(b) Lawfully issued debt obligations of the agencies and
instrumentalities of the State of Oregon and its political
subdivisions that have a long-term rating of A or an equivalent
rating or better or are rated on the settlement date in the
highest category for short-term municipal debt by a nationally
recognized statistical rating organization.
(c) Lawfully issued debt obligations of the States of
California, Idaho and Washington and political subdivisions of
those states if the obligations have a long-term rating of AA or
an equivalent rating or better or are rated on the settlement
date in the highest category for short-term municipal debt by a
nationally recognized statistical rating organization.
(d) Time deposit open accounts, certificates of deposit and
savings accounts in insured institutions as defined in ORS
706.008, in credit unions as defined in ORS 723.006 or in federal
credit unions, if the institution or credit union maintains a
head office or a branch in this state.
(e) Share accounts and savings accounts in credit unions in the
name of, or for the benefit of, a member of the credit union
pursuant to a plan of deferred compensation.
(f) Fixed or variable life insurance or annuity contracts as
defined by ORS 731.170 and guaranteed investment contracts issued
by life insurance companies authorized to do business in this
state.
(g) Trusts in which deferred compensation funds from other
public employers are pooled, if:
(A) The purpose is to establish a deferred compensation plan;
(B) The trust is a public instrumentality of such public
employers and described in section (2)(b) of the Investment
Company Act of 1940, 15 U.S.C. 80a-2(b), as amended, in effect on
September 20, 1985, or the trust is a common trust fund described
in ORS 709.170;
(C) Under the terms of the plan the net income from or gain or
loss due to fluctuation in value of the underlying assets of the
trust, or other change in such assets, is reflected in an equal
increase or decrease in the amount distributable to the employee
or the beneficiary thereof and, therefore, does not ultimately
result in a net increase or decrease in the worth of the public
employer or the state; and
(D) The fidelity of the trustees and others with access to such
assets, other than a trust company, as defined in ORS 706.008, is
insured by a surety bond that is satisfactory to the public
employer, issued by a company authorized to do a surety business
in this state and in an amount that is not less than 10 percent
of the value of such assets.
(h)(A) Banker's acceptances, if the banker's acceptances are:
(i) Guaranteed by, and carried on the books of, a qualified
financial institution;
(ii) Eligible for discount by the Federal Reserve System; and
(iii) Issued by a qualified financial institution whose
short-term letter of credit rating is rated in the highest
category by one or more nationally recognized statistical rating
organizations.
(B) For the purposes of this paragraph, 'qualified financial
institution' means:
(i) A financial institution that is located and licensed to do
banking business in the State of Oregon; or
(ii) A financial institution that is wholly owned by a
financial holding company or a bank holding company that owns a
financial institution that is located and licensed to do banking
business in the State of Oregon.
(C) A custodial officer shall not permit more than 25 percent
of the moneys of a local government that are available for
investment, as determined on the settlement date, to be invested
in banker's acceptances of any qualified financial institution.
(i)(A) Corporate indebtedness subject to a valid registration
statement on file with the Securities and Exchange Commission or
issued under the authority of section 3(a)(2) or 3(a)(3) of the
Securities Act of 1933, as amended. Corporate indebtedness
described in this paragraph does not include banker's
acceptances. The corporate indebtedness must be issued by a
commercial, industrial or utility business enterprise, or by or
on behalf of a financial institution, including a holding company
owning a majority interest in a qualified financial institution.
(B) Corporate indebtedness must be rated on the settlement date
P-1 or Aa or better by Moody's Investors Service or A-1 or AA or
better by Standard & Poor's Corporation or equivalent rating by
any nationally recognized statistical rating organization.
(C) Notwithstanding subparagraph (B) of this paragraph, the
corporate indebtedness must be rated on the settlement date P-2
or A or better by Moody's Investors Service or A-2 or A or better
by Standard & Poor's Corporation or equivalent rating by any
nationally recognized statistical rating organization when the
corporate indebtedness is:
(i) Issued by a business enterprise that has its headquarters
in Oregon, employs more than 50 percent of its permanent
workforce in Oregon or has more than 50 percent of its tangible
assets in Oregon; or
(ii) Issued by a holding company owning not less than a
majority interest in a qualified financial institution, as
defined in paragraph (h) of this subsection, located and licensed
to do banking business in Oregon or by a holding company owning
not less than a majority interest in a business enterprise
described in sub-subparagraph (i) of this subparagraph.
(D) A custodial officer may not permit more than 35 percent of
the moneys of a local government that are available for
investment, as determined on the settlement date, to be invested
in corporate indebtedness, and may not permit more than five
percent of the moneys of a local government that are available
for investment to be invested in corporate indebtedness of any
single corporate entity and its affiliates or subsidiaries.
(j) Repurchase agreements whereby the custodial officer
purchases securities from a financial institution or securities
dealer subject to an agreement by the seller to repurchase the
securities. The repurchase agreement must be in writing and
executed in advance of the initial purchase of the securities
that are the subject of the repurchase agreement. Only securities
described in paragraph (a) of this subsection may be used in
conjunction with a repurchase agreement and such securities shall
have a maturity of not longer than three years. The price paid by
the custodial officer for such securities may not exceed amounts
or percentages prescribed by written policy of the Oregon
Investment Council or the Oregon Short Term Fund Board created by
ORS 294.885.
(k) Shares of stock of any company, association or corporation,
including but not limited to shares of a mutual fund, but only if
the moneys being invested are funds set aside pursuant to a local
government deferred compensation plan and are held in trust for
the exclusive benefit of participants and their beneficiaries.
{ + (L) The Oregon Short Term Fund or any other commingled
investment pool established by the State Treasurer for investment
of the funds of state agencies or county governments. + }
SECTION 2. { + 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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