2007 Oregon Code - Chapter 287a :: Chapter 287A - LOCAL GOVERNMENT BORROWING
Chapter 287A
— Local Government Borrowing
2007 EDITION
LOCAL GOVERNMENT BORROWING
PUBLIC BORROWING
DEFINITIONS
287A.001Â Definitions
for ORS chapter 287A
AUTHORITY FOR BORROWING
287A.010Â Powers
conveyed to public bodies
(General Obligation Bonds)
287A.050Â Authority
of city to issue general obligation bonds
287A.100Â Authority
of county to issue general obligation bonds
287A.105Â Limitation
on bonded indebtedness of county
287A.140Â Ad
valorem tax levy to pay general obligation bonds
287A.145Â Misspent
proceeds of general obligation bonds
(Revenue Bonds)
287A.150Â Authority
of public body to issue revenue bonds
287A.180Â Short-term
borrowing by public body
(Debt Limits)
287A.195Â Compliance
with constitutional or statutory debt limits
ADMINISTRATION OF BONDS
287A.300Â Terms
and conditions of bond sales; delegation of authority
287A.310Â Definitions
for ORS 287A.310 and 287A.315; lien of a pledge; Uniform Commercial Code
287A.315Â Pledge
of full faith and credit and taxing power
287A.325Â Covenants
of public bodies regarding pledges
287A.335Â Agreements
for exchange of interest rates; rules
287A.340Â Credit
enhancement devices
287A.345Â State
taxation of bond interest
287A.350Â Public
records
REFUNDING BONDS
287A.360Â Current
refunding bonds
287A.365Â Advance
refunding bonds and forward current refunding
287A.370Â Proposed
refunding plan for advance refunding bonds or forward current refunding; rules;
fees
287A.375Â Maximum
amount of advance refunding bonds
287A.380Â Tax
levy to pay maturing general obligation advance refunding bonds
WARRANTS AND CHECKS; INTEREST; UNCLAIMED WARRANTS AND CHECKS; MASTER
WARRANTS
287A.472Â Interest
on municipal warrants not paid on presentation
287A.474Â Warrants
and checks more than two years old; report by fiscal officer; claim by owner
287A.482Â Definitions
for ORS 287A.482 to 287A.488
287A.484Â Master
warrant procedure authorized if warrants would be not paid
287A.486Â Procedure
287A.488Â Taxes
must be levied for payment of claims included in master warrant
287A.630Â Oregon
Municipal Debt Advisory Commission; creation; term; compensation
287A.632Â Meetings;
quorum; personnel
287A.634Â Powers
and duties of commission; rules; fees
287A.640Â Notice
to commission of proposed issues; duty of public bodies to assist; rules
     Note: Sections 233 to 237, chapter 783, Oregon
Laws 2007, provide:
     Sec.
233. Unless an election is
made under section 236 of this 2007 Act:
     (1) Sections 2 to 11, 15 to 26, 31 and 33
of this 2007 Act and the amendments to ORS 286.555, 286.605, 286.615, 286.645,
286.560, 286.563, 286.566, 286.580, 286.585, 286.750, 286.762, 286.782,
286.768, 293.175, 293.177 and 328.346 by sections 13, 14, 27 to 29, 32, 35 to
40 and 110 to 112 of this 2007 Act apply to bonds approved for issuance by the
State Treasurer on or after the effective date of this 2007 Act [January 1,
2008].
     (2) Sections 42 to 59 and 64 to 70 of this
2007 Act and the amendments to ORS 287.030, 287.032, 287.034 and 287.040 by
sections 60 to 63 of this 2007 Act apply to bonds approved for issuance by the
governing body of a public body on or after the effective date of this 2007
Act.
     (3) The amendments to statutes by sections
71 to 232e of this 2007 Act apply to bonds approved for issuance by the State
Treasurer or the governing body of a public body, as appropriate, on or after
the effective date of this 2007 Act. [2007 c.783 §233]
     Sec.
234. (1) ORS 223.905,
223.910, 223.915, 223.920, 223.925, 285B.347, 286.010, 286.020, 286.031,
286.033, 286.036, 286.038, 286.041, 286.051, 286.056, 286.058, 286.061,
286.066, 286.071, 286.078, 286.105, 286.115, 286.125, 286.135, 286.145,
286.505, 286.507, 286.515, 286.525, 286.535, 286.545, 286.635, 286.700,
286.705, 286.710, 286.715, 286.720, 286.770, 286.790, 287.001, 287.003,
287.004, 287.006, 287.007, 287.008, 287.012, 287.014, 287.016, 287.018,
287.020, 287.022, 287.025, 287.028, 287.029, 287.033, 287.036, 287.038,
287.042, 287.045, 287.049, 287.052, 287.053, 287.054, 287.055, 287.056,
287.058, 287.062, 287.064, 287.066, 287.069, 287.070, 287.072, 287.074,
287.075, 287.140, 287.142, 287.144, 287.146, 287.202, 287.204, 287.206,
287.208, 287.210, 287.212, 287.214, 287.216, 287.218, 287.220, 287.252,
287.254, 287.256, 287.258, 287.260, 287.262, 287.264, 288.010, 288.020, 288.030,
288.040, 288.050, 288.060, 288.070, 288.090, 288.100, 288.110, 288.120,
288.150, 288.155, 288.160, 288.162, 288.165, 288.410, 288.420, 288.430,
288.435, 288.440, 288.450, 288.460, 288.500, 288.505, 288.513, 288.515,
288.517, 288.518, 288.520, 288.523, 288.525, 288.530, 288.535, 288.540,
288.545, 288.550, 288.560, 288.570, 288.580, 288.590, 288.592, 288.594,
288.596, 288.598, 288.600, 288.605, 288.610, 288.615, 288.620, 288.625,
288.630, 288.635, 288.637, 288.640, 288.645, 288.650, 288.655, 288.660, 288.665,
288.670, 288.675, 288.677, 288.680, 288.685, 288.690, 288.695, 288.805,
288.815, 288.825, 288.835, 288.845, 288.855, 288.865, 288.875, 288.885,
288.895, 288.915, 288.925, 288.935, 288.945, 288.950, 293.173, 293.292,
328.235, 358.395, 358.400, 367.670, 450.935 and 456.650 are repealed.
     (2) Notwithstanding section 17, chapter
895, Oregon Laws 2007 (amending ORS 288.805), if Senate Bill 812 becomes law,
ORS 288.805 is repealed. [2007 c.783 §234]
     Sec.
235. Nothing in the repeal
of statutes by section 234 of this 2007 Act affects any issue of bonds that
occurred prior to the effective date of this 2007 Act [January 1, 2008]. [2007
c.783 §235]
     Sec.
236. (1) Notwithstanding
section 233 of this 2007 Act and the repeal of statutes by section 234 of this
2007 Act, or any other provision of law, the State Treasurer or any public body
as defined in section 42 of this 2007 Act [287A.001] may elect, pursuant to
rules adopted by the State Treasurer, to authorize or issue bonds under the
laws of this state in effect on the day before the effective date of this 2007
Act [January 1, 2008].
     (2) The State Treasurer shall by rule
prescribe how and when an election may be made under this section. [2007 c.783 §236]
     Sec.
237. Section 236 of this
2007 Act is repealed January 2, 2010. [2007 c.783 §237]
DEFINITIONS
     287A.001
Definitions for ORS chapter 287A. As used in this chapter:
     (1) “Advance refunding bond” means a bond
all or part of the proceeds of which are to be used to pay an outstanding bond
one year or more after the advance refunding bond is issued.
     (2) “Agreement for exchange of interest
rates” means a contract, or an option or forward commitment to enter into a
contract, for an exchange of interest rates for related bonds that provides
for:
     (a) Payments based on levels 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.
     (3) “Bond”:
     (a) Means a contractual undertaking or instrument
of a public body to repay borrowed moneys.
     (b) Does not mean a credit enhancement
device.
     (4) “Capital construction” has the meaning
given that term in ORS 310.140.
     (5) “Capital improvements” has the meaning
given that term in ORS 310.140.
     (6) “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 exchange of interest
rates.
     (b) Does not mean a bond.
     (7) “Current refunding bond” means a bond
the proceeds of which are to be used to pay an outstanding bond less than one
year after the current refunding bond is issued.
     (8) “Forward current refunding” means
execution and delivery of a purchase agreement or similar instrument under
which a public body contracts to sell current refunding bonds for delivery at a
future date that is one year or more after execution of the purchase agreement
or similar instrument.
     (9) “General obligation bond” means exempt
bonded indebtedness, as defined in ORS 310.140, that is secured by a commitment
to levy ad valorem taxes outside the limits of sections 11 and 11b, Article XI
of the Oregon Constitution.
     (10) “Lawfully available funds” means
revenues or other moneys of a public body including, but not limited to, moneys
credited to the general fund of the public body, revenues from an ad valorem
tax and revenues derived from other taxes levied by the public body that are
not dedicated, restricted or obligated by law or contract to an inconsistent
expenditure or use.
     (11) “Operative document” means a bond
declaration, trust agreement, indenture, security agreement or other document
in which a public body pledges revenue or property as security for a bond.
     (12) “Pledge” means:
     (a) To create a lien on property pursuant
to ORS 287A.310.
     (b) A lien created on property pursuant to
ORS 287A.310.
     (13) “Public body” means:
     (a) A county of this state;
     (b) A city of this state;
     (c) A local service district as defined in
ORS 174.116 (2);
     (d) A special government body as defined
in ORS 174.117;
     (e)
     (f) Any other political subdivision of
this state that is authorized by the Legislative Assembly to issue bonds.
     (14) “Refunding bond” means an advance
refunding bond, a current refunding bond or a forward current refunding bond.
     (15) “Related bond” means a bond for which
the public body enters into an agreement for exchange of interest rates or
obtains a credit enhancement device.
     (16) “Revenue” means all fees, tolls,
excise taxes, assessments, property taxes and other taxes, rates, charges,
rentals and other income or receipts derived by a public body or to which a
public body is entitled.
     (17) “Revenue bond” means a bond that is
not a general obligation bond.
     (18) “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. [2007 c.783 §42]
AUTHORITY FOR
BORROWING
     287A.010
Powers conveyed to public bodies. The powers conveyed to public bodies by ORS 287A.001 to 287A.380 are
in addition to any other powers possessed by public bodies and do not limit
those other powers. [2007 c.783 §68]
(General
Obligation Bonds)
     287A.050
Authority of city to issue general obligation bonds. (1) A city may issue general obligation
bonds to finance capital construction or capital improvements upon approval of
the electors of the city.
     (2) Unless the city charter provides a
lesser limitation, a city may not issue or have outstanding at the time of
issuance general obligation bonds in a principal amount that exceeds three
percent of the real market value of the taxable property within its boundaries,
calculated as provided in ORS 308.207.
     (3) The limitation described in subsection
(2) of this section does not apply to general obligation bonds issued to
finance the costs of local improvements assessed and paid for in installments
under statutory or charter authority or to finance capital construction or
capital improvements for:
     (a) Water supply, treatment or
distribution;
     (b) Sanitary or storm sewage collection or
treatment;
     (c) Hospitals or infirmaries;
     (d) Gas, power or lighting; or
     (e) Off-street motor vehicle parking
facilities. [2007 c.783 §43]
     287A.100
Authority of county to issue general obligation bonds. (1) Unless the county charter expressly
provides otherwise, a county may issue general obligation bonds to finance
capital construction or capital improvements upon approval of the electors of
the county.
     (2) Unless the county charter provides a
lesser limitation, a county may not issue or have outstanding at the time of
issuance general obligation bonds in a principal amount that exceeds two
percent of the real market value of the taxable property in the county,
calculated as provided in ORS 308.207. [2007 c.783 §44]
     287A.105
Limitation on bonded indebtedness of county. (1) A county may incur bonded indebtedness within the meaning of
section 10, Article XI of the Oregon Constitution, by issuing revenue bonds
when a county is expressly authorized to issue revenue bonds by a law other
than this section. The amount of revenue bonds permitted by this section may
not exceed the lesser of:
     (a) One percent of the real market value
of all taxable property in the county, calculated as provided in ORS 308.207;
or
     (b) A limitation on bonded indebtedness in
the county charter.
     (2) The limitation on bonded indebtedness
in subsection (1) of this section does not apply to revenue bonds issued to
finance pension liabilities under ORS 238.692 to 238.698 or any other law in
effect prior to enactment of ORS 238.692 to 238.698. [2007 c.783 §45]
     287A.140
Ad valorem tax levy to pay general obligation bonds. (1) In addition to other taxes imposed, a
public body shall levy annually an ad valorem property tax on the taxable
property within the boundaries of the public body in an amount that is
sufficient, when added to other amounts available, to pay the principal of and
interest on outstanding general obligation bonds issued by the public body.
     (2) A public body may:
     (a) Use the revenues collected under this
section and earnings on the revenues only to pay the principal of and interest
on general obligation bonds.
     (b) Not use or divert taxes levied under
subsection (1) of this section for another purpose while principal or interest
remains unpaid on the bonds.
     (c) If a surplus amount remains after the
principal of and interest on an issue of general obligation bonds have been
paid and the public body does not have other expenses related to the bonds,
transfer the surplus moneys to a fund designated by the governing body of the
public body. [2007 c.783 §67]
     287A.145
Misspent proceeds of general obligation bonds. (1) If a court of competent jurisdiction
determines that the proceeds of an issue of general obligation bonds have been
used by a public body for expenditures that are not capital construction or
capital improvements, the court may order the public body to:
     (a) Replace the misspent proceeds with
interest, on a reasonable schedule determined by the court, from moneys other
than the tax revenues that the public body levies to pay the debt service; and
     (b) Use the replaced moneys for capital
construction or capital improvement expenditures or to pay the debt service.
     (2) If the public body fails to comply
with an order to replace the misspent proceeds or acknowledges that the public
body is unable to replace the misspent proceeds, the court may determine that a
portion of the future levies to pay the debt service is subject to the limits
of sections 11 and 11b, Article XI of the Oregon Constitution, by calculating the
amount of the tax revenues that are necessary to pay the principal and interest
on the bonds that is allocable to the misspent proceeds.
     (3) An action may not be filed or
maintained against a public body because of an alleged expenditure of the bond
proceeds of general obligation bonds for purposes other than capital
construction or capital improvements, if the misspent moneys are less than
$5,000. [2007 c.783 §66]
     287A.150
Authority of public body to issue revenue bonds. (1) In addition to any other authority to
issue revenue bonds, a public body may authorize revenue bonds by resolution or
nonemergency ordinance pursuant to this section for a public purpose.
     (2) If revenue bonds are authorized by
nonemergency ordinance, a public body may not sell the revenue bonds pursuant
to this section until the period for referral of the ordinance has expired. If
electors of a public body refer a nonemergency ordinance authorizing issuance
of revenue bonds, the public body may not sell the revenue bonds unless the
electors approve issuance of the revenue bonds.
     (3) If revenue bonds are authorized by
resolution:
     (a) A public body may not sell the revenue
bonds until at least 60 days following publication of the notice required in
subsection (4) of this section.
     (b) The resolution must provide that
electors residing within the public body may file a petition with the public
body asking the public body to refer the question of whether to issue the
revenue bonds to a vote. If within 60 days after the publication of the notice
described in subsection (4) of this section, electors file petitions with the
public body containing valid signatures of at least five percent of the public
bodyÂ’s electors, the public body:
     (A) Shall place the question of issuing
the revenue bonds on the ballot at the next lawfully available election date;
and
     (B) May not sell the revenue bonds
described in the notice unless a majority of the electors voting on the
question of issuing the revenue bonds approve.
     (4) A public body authorizing revenue
bonds by resolution shall publish a notice describing the purposes for which
the revenue bonds will be sold in at least one newspaper of general circulation
within the boundaries of the public body in the same manner as other public
notices of the public body. At a minimum, the notice must contain:
     (a) The date the resolution was adopted
and the number thereof, if any;
     (b) The expected source of revenue for
repayment of the revenue bonds;
     (c) The estimated principal amount of the
revenue bonds to be sold;
     (d) The procedures by which electors may
cause the question of issuing the revenue bonds to be referred to a vote;
     (e) The period within which electors must
file signed petitions to cause referral; and
     (f) The fact that the resolution is available
for inspection at the appropriate office of the public body.
     (5) If revenue bonds are authorized by
nonemergency ordinance under subsection (2) of this section, the revenue bonds
may be secured by the revenues or other property of the public body that is
described in the nonemergency ordinance. If revenue bonds are authorized by
resolution under subsection (3) of this section, the revenue bonds may be
secured by the revenues or other property of the public body that is described
in the notice required under subsection (4) of this section.
     (6) A public body may issue refunding
bonds under ORS 287A.360 to 287A.380 to pay revenue bonds that were authorized
by this section. The procedures and limitations of subsections (1) to (5) of
this section do not apply to refunding bonds. [2007 c.783 §46]
     287A.180
Short-term borrowing by public body. (1) In addition to any other authority to issue revenue bonds, but
subject to applicable limitations imposed by the Oregon Constitution or the
charter or ordinance of the public body, a public body may issue revenue bonds
pursuant to this section:
     (a) In anticipation of tax revenues or
other moneys;
     (b) To provide interim financing for
capital projects to be undertaken by the public body; or
     (c) To refund revenue bonds issued
pursuant to this section.
     (2) To secure revenue bonds authorized
under this section, a public body may:
     (a) Pledge all or part of the revenues of
the public body that may lawfully be used to secure payment of the revenue
bonds.
     (b) Obtain credit enhancement devices for
the revenue bonds authorized by this section.
     (c) Establish debt service reserves.
     (d) Enter into covenants, by ordinance,
resolution or agreement, for the protection and security of the owners of
revenue bonds authorized by this section. The covenants constitute enforceable
contracts with the owners of the revenue bonds.
     (3) Revenue bonds authorized by this
section that are issued in anticipation of revenues and revenue bonds issued
under subsection (1)(c) of this section:
     (a) Must mature within 13 months after
they are issued; and
     (b) May not be issued in a principal
amount that exceeds 80 percent of the taxes or other revenues, except grant
moneys, that the public body has budgeted or otherwise reasonably expects to
have available to pay the revenue bonds.
     (4) Revenue bonds authorized by this
section that are issued in anticipation of grant moneys or to provide interim
financing for capital projects and revenue bonds issued under subsection (1)(c)
of this section must mature not later than five years after the revenue bonds
are issued.
     (5) The debt limitations imposed by law or
the charter of a public body do not apply to revenue bonds or credit
enhancement devices authorized by this section. [2007 c.783 §47]
(Debt Limits)
     287A.195
Compliance with constitutional or statutory debt limits. (1) When calculating compliance with a
constitutional or statutory debt limit for a public body:
     (a) The amount of interest to be paid on
bonds, whether paid currently or deferred, is not taken into account.
     (b) For a zero coupon bond or other
original discount bond on which periodic interest payments are not made, only
the accreted value of the bond on the date the bond is issued is taken into
account.
     (c) If a bond is issued to a provider of a
credit enhancement device for a bond that is subject to a debt limit, the bond
issued to the provider must be taken into account only to the extent that the
amount of the bond issued to the provider exceeds the amount of the bond
secured by the credit enhancement device.
     (d) A public body may deduct from the
amount of outstanding indebtedness:
     (A) The amount of money and investments
that the public body or a trustee of the public body or a trustee or agent of
the public body holds to pay bonds that have not been defeased.
     (B) The principal amount of bonds that
have been defeased.
     (2) For purposes of this section, a bond
is defeased if:
     (a) The public body has set aside in an
irrevocable escrow government obligations, as defined in ORS 287A.375, the
receipts from which have been calculated by a certified public accountant or
other experienced professional to be sufficient, without reinvestment, to pay
the principal, interest and premium, if any, due on the bond at maturity or on
prior redemption; or
     (b) The public body has complied with the
provisions in the documents authorizing the bond that govern payment or
defeasance of the bond. [2007 c.783 §64]
ADMINISTRATION
OF BONDS
     287A.300
Terms and conditions of bond sales; delegation of authority. (1) Notwithstanding a limitation in a local
charter, 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.
     (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
     (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. [2007 c.783 §§48,49]
     287A.310
Definitions for ORS 287A.310 and 287A.315; lien of a pledge; Uniform Commercial
Code. (1) As used in this
section and ORS 287A.315:
     (a) “Obligation” means:
     (A) A bond;
     (B) The commitment of a public body in
connection with a credit enhancement device; or
     (C) An agreement for exchange of interest
rates.
     (b) “Property” means:
     (A) Real or personal property, tangible or
intangible, whether owned when a pledge is made or acquired subsequently to the
time the pledge is made; and
     (B) Revenues, contract rights, receivables
or securities.
     (2) The Uniform Commercial Code does not
apply to the creation, perfection, priority or enforcement of a lien of a
pledge made by a public body.
     (3) When otherwise authorized by statute,
charter, ordinance or resolution to issue bonds, a public body may pledge as
security for payment of obligations all or part of the property of the public
body expressly authorized to be pledged by the governing body of the public
body.
     (4) The lien created by a pledge is valid
and binding from the time the pledge is made. Pledged property is subject
immediately to the lien of the pledge without physical delivery, filing or any
other act.
     (5) Except as otherwise expressly provided
in an operative document, the lien of the pledge is superior to and has
priority over all other claims and liens.
     (6) When property subject to a pledge is
acquired by a public body after the pledge is made:
     (a) The property is subject to the lien
upon acquisition by the public body without physical delivery, filing or any
other act.
     (b) The lien relates to the time the
pledge was originally made.
     (7) A public body may reserve a right to
pledge a pledged property as security for bonds subsequently issued by the
public body. If the public body reserves the right, subject to the terms of the
operative document that created a previous pledge, the lien of the subsequent
pledge may be on a parity or pari passu basis with the lien of the previous
pledge, on a prior and superior basis with the lien of the previous pledge or
on a subordinate basis with the lien of the previous pledge, as specified in
the operative document creating the subsequent pledge. The lien of the
subsequent pledge:
     (a) Has the priority specified in the
operative document creating the subsequent pledge; and
     (b) Is superior to and has priority over
all other claims and liens except the lien of a pledge with which the lien of
the subsequent pledge is on a parity or subordinate basis, as specified in the
operative document.
     (8) A pledgee may commence an action in a
court of competent jurisdiction to foreclose the lien of the pledge and
exercise rights and remedies available to the pledgee under the operative
document.
     (9) When pledged property consists of
moneys or property that is in a fund for debt service reserves or payments, a
pledgee may foreclose the lien of the pledge by applying the moneys or property
in the fund to the payment of the bonds subject to the terms, conditions and
limitations in the operative document. [2007 c.783 §50]
     287A.315
Pledge of full faith and credit and taxing power. (1) A public body may pledge its full faith
and credit and taxing power when the public body issues:
     (a) A general obligation bond; or
     (b) An obligation that is secured by all
lawfully available funds of the public body.
     (2) When a public body pledges its full
faith and credit and taxing power to pay an obligation, the pledge constitutes
an enforceable promise or contract by the public body:
     (a) To pay the obligation out of lawfully
available funds of the public body; and
     (b) If lawfully available funds are
insufficient to pay when due the amounts owing on the obligation, to levy,
impose and collect a tax that is within the authority of the public body to
levy, impose and collect in an amount sufficient to pay the amounts owing under
the obligation, including past due amounts and penalties.
     (3) If a public body fails to pay when due
an amount owing under an obligation secured by a pledge of the full faith and
credit and taxing power of the public body, the owner of the obligation, or the
trustee appointed to act on behalf of the owner, may bring an action in the
circuit court of the county in which the principal offices of the public body
are located to compel the public body:
     (a) To appropriate and expend sufficient
lawfully available funds to pay the amounts owing on the obligation; or
     (b) If lawfully available funds are
insufficient to pay when due the amounts owing on the obligation, to levy,
impose and collect a tax that is within the authority of the public body to
levy, impose and collect in an amount sufficient to pay the amounts owing under
the obligation, including past due amounts and penalties.
     (4) An owner of the obligation, or a
trustee appointed to act on behalf of the owner, may initiate a proceeding to
impose remedial sanctions under ORS 33.055 against members of the governing
body of a public body for failure to comply with an order of the court under
this section.
     (5) A pledge of the full faith and credit
and taxing power authorized by this section does not, by itself, create a lien
on the revenues or property of the public body. [2007 c.783 §50a]
     287A.325
Covenants of public bodies regarding pledges. (1) The Legislative Assembly finds that:
     (a) It is a matter of statewide concern
that certain covenants made by public bodies regarding a pledge of revenues to
secure bonds not be impaired by subsequent initiative or referendum measures.
     (b) The covenants described in paragraph
(a) of this subsection usually are in the form of a promise to charge and
collect rates, fees, tolls, rentals or other charges sufficient to produce
moneys to maintain a specified level of debt service coverage.
     (c) The possibility that the covenants
described in paragraph (a) of this subsection might be rolled back, frozen or
otherwise subjected to subsequently imposed conditions or restrictions
negatively affects the ability of public bodies to market their bonds, to
obtain credit enhancement and to obtain satisfactory ratings on their bonds.
     (2) Therefore, the Legislative Assembly
declares that covenants are material to the security for bonds and to investorsÂ’
expectations regarding timely payment of the bonds.
     (3) An elector-approved initiative or
referendum measure that purports to change ordinances or resolutions affecting
rates, fees, tolls, rentals or other charges has no force or effect if giving
force and effect to the change would impair existing covenants made with
existing bond owners.
     (4) A public body may enter into rate
covenants that obligate the public body to periodically set rates and charges:
     (a) That generate pledged revenues at
specific levels including, but not limited to, a specific monetary charge for
each unit of commodity or service provided or a schedule of rates and charges
that includes fixed and variable components;
     (b) At levels sufficient to maintain
underlying credit ratings assigned to bonds by one or more nationally recognized
credit rating services without regard to improvement in credit ratings due to
the additional security provided for the bonds by a credit enhancement device;
     (c) That generate pledged revenues each
year in amounts at least equal to operations and maintenance expenses of the
system that produces the pledged revenues, plus debt service on revenue bonds
and other borrowings, plus an additional amount that is reasonably required to
obtain favorable terms for the revenue bonds and other borrowings; or
     (d) In accordance with a formula
established in the operative document governing revenue bonds or other
borrowings. The formula may provide for rates and charges to be determined by
reference to factors including, but not limited to:
     (A) Historical operating expenses;
     (B) Projected future operating expenses;
     (C) The funding of depreciation;
     (D) The costs of capital improvements;
     (E) The costs of complying with
contractual obligations and covenants;
     (F) The costs of complying with regulatory
requirements;
     (G) Reports of independent consultants
regarding the level of pledged revenues required to operate and maintain a
utility in accordance with prudent utility practice;
     (H) Debt service on the revenue bonds or
other borrowings bonds; and
     (I) The moneys needed to establish or
maintain reserves required by law or contract and the moneys needed to maintain
an unencumbered carryforward fund balance or working capital to meet
unanticipated expenses or fluctuations in revenues that may arise.
     (5) Without regard to the date of
execution of a rate covenant, a rate covenant authorized by this section is a
contract that binds the public body and is enforceable against the public body
in accordance with the terms of the rate covenant. [2007 c.783 §51]
     287A.335
Agreements for exchange of interest rates; rules. (1) As used in this section, “counterparty”
means an entity with whom a public body enters into an agreement for exchange
of interest rates.
     (2) Upon a finding by a public body that
an agreement for exchange of interest rates benefits the public body, the
public body may enter into the agreement for exchange of interest rates with a
counterparty. An agreement for exchange of interest rates may be made to manage
payment, interest rate, spread or similar exposure undertaken in connection
with related bonds that:
     (a) Exist when the agreement for exchange
of interest rates is executed;
     (b) Are reasonably expected to be executed
when regularly scheduled payments are due from the issuer under the agreement;
or
     (c) Are identified after the agreement for
exchange of interest rates is executed and substituted for related bonds
described in paragraph (a) or (b) of this subsection as a result of prepayment,
refunding, conversion, ratings changes, redemption, defeasance or other similar
event.
     (3) Upon entering into an agreement for
exchange of interest rates under this section and continuing until the
agreement is satisfied, terminated or otherwise no longer in effect, provided a
payment default has not occurred, the public body may treat the amount or rate
of interest on the related bond as the amount or rate of interest payable after
giving effect to the agreement for exchange of interest rates for the purpose
of calculating:
     (a) Tax levies to pay regularly scheduled
bond debt service; and
     (b) Other amounts that are based on the
rate of interest of the bond.
     (4) Subject to covenants applicable to a
related bond and the limitations of this section, payments required under an
agreement for exchange of interest rates may:
     (a) Be treated as interest payments on the
related bond;
     (b) Be made from revenues or other moneys
contributed to or legally available to pay the related bond; and
     (c) Rank in an order of priority of
payment relative to the payment of the related bond as the public body
determines.
     (5) In connection with entering into an
agreement for exchange of interest rates, a public body may obtain a credit
enhancement device to secure the agreement for exchange of interest rates.
     (6) An agreement for exchange of interest
rates entered into under this section:
     (a) Is not a debt or other obligation of
the issuer for purposes of any limitation upon the indebtedness of the issuer.
     (b) Is subject only to the limitations of
this section and is not subject to other limitations applicable to the related
borrowing.
     (7) A termination payment required to be
paid by the public body under an agreement for exchange of interest rates may
not be paid from ad valorem property taxes levied outside the limitations of
section 11 or 11b, Article XI of the Oregon Constitution.
     (8) The Oregon Municipal Debt Advisory
Commission shall adopt administrative rules establishing required terms,
conditions, annual or periodic reporting requirements and other requirements
for an agreement for exchange of interest rates entered into by a public body,
if the commission determines those requirements are desirable to protect the
interests of the public body.
     (9) A public body may create reserves to
pay amounts due under agreements for exchange of interest rates and fund the
reserves with moneys derived from the issuance and sale of bonds or from
revenues or other moneys described in subsection (4)(b) of this section. [2007
c.783 §53]
     287A.340
Credit enhancement devices.
(1) A public body may obtain a credit enhancement device and enter into related
agreements.
     (2) The public body may pay the provider
of the credit enhancement device from the same sources that the public body may
lawfully use to pay the related bonds or from any other legally available
source.
     (3) The public body may issue a bond to
the provider of a credit enhancement device to secure the obligations of the
public body or to pay amounts due to the provider. [2007 c.783 §52]
    Â
     287A.350
Public records. The records
of registered bond ownership, whether maintained by a public body or otherwise,
are not public records within the meaning of ORS 192.410 (4). [2007 c.783 §69]
REFUNDING
BONDS
     Note: Section 70, chapter 783, Oregon Laws 2007,
provides:
     Sec.
70. (1) ORS 288.605 to
288.695 (2005 or earlier edition) do not apply to or affect advance refunding
bonds issued prior to October 4, 1977.
     (2) Sections 54 to 59 of this 2007 Act
[287A.360 to 287A.380] do not apply to or affect refunding bonds issued prior
to the effective date of this 2007 Act [January 1, 2008]. [2007 c.783 §70]
     287A.360
Current refunding bonds. (1)
In addition to any other authority to issue refunding bonds, a public body may
issue current refunding bonds to refund 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 bonds and with revenues and covenants
authorized by law when the refunding bonds are issued.
     (3) A public body may issue:
     (a) General obligation bonds to refund
outstanding general obligation bonds without obtaining approval of the electors
of the public body.
     (b) Revenue bonds to refund revenue bonds
that were issued in accordance with ORS 287A.150 without complying with the
procedures prescribed in ORS 287A.150.
     (c) General obligation bonds as current
refunding bonds with a maturity date not more than 30 days after the maturity
date of the elector-approved general obligation bonds to be refunded or the
latest maturity date permitted in the elector-approved measure authorizing the
refunded bonds, whichever is later. If the total debt service on the current
refunding general obligation bonds does not exceed the total debt service on
the general obligation bonds to be refunded, the amounts maturing on a given
date may be changed, and the current refunding general obligation bonds may
mature earlier than the bonds to be refunded.
     (4) A public body may not issue current
refunding bonds in an amount that, together with amounts on deposit in sinking
funds or other moneys pledged to payment of the principal, exceeds the amount
that the public body estimates is required to:
     (a) Pay the refunded bonds or pay a
termination payment with respect to an agreement for exchange of interest rates
related to the refunded bonds;
     (b) Fund reserves for the current refunding
bonds;
     (c) Pay costs of issuing the current
refunding bonds and obtaining credit enhancement devices; and
     (d) Pay other costs related to the current
refunding bonds. [2007 c.783 §54]
     287A.365
Advance refunding bonds and forward current refunding. (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 with any of the revenues and covenants that the public body
could have used to secure the refunded bonds and with revenues and covenants
authorized by law when the refunding bonds are issued. [2007 c.783 §55]
     287A.370
Proposed refunding plan for advance refunding bonds or forward current refunding;
rules; fees. (1) The State
Treasurer shall review the plan of a public body to issue advance refunding
bonds or to enter into a forward current refunding to determine whether the
plan complies with applicable rules of the State Treasurer, as provided in this
section.
     (2) After adoption of an ordinance or
resolution approving a plan to issue advance refunding bonds or to enter into a
forward current refunding, a public body shall submit the refunding plan to the
State Treasurer for review and approval.
     (3) After review of a proposed refunding
plan, the State Treasurer shall advise the public body, in writing, whether the
plan is approved. If the State Treasurer does not notify the public body within
30 business days after receipt of the plan, the plan is deemed approved. A
public body may issue advance refunding bonds or enter into a forward current
refunding in accordance with a refunding plan approved by the State Treasurer.
     (4) The State Treasurer may adopt rules to
regulate forward current refunding and the issuance of advance refunding bonds.
     (5) The State Treasurer may charge public
bodies fees and expenses as provided in ORS 286A.014 in connection with the
activities of this section. [2007 c.783 §56]
     287A.375
Maximum amount of advance refunding bonds. (1) As used in this section, “government obligations” means:
     (a) Direct obligations of the
     (b) Bonds, debentures, notes, certificates
of participation or other obligations issued by a federal agency or other
instrumentality of the federal government; or
     (c) Other debt obligations determined by
administrative rule of the State Treasurer to be highly secured and widely
accepted in the marketplace as obligations for a defeasance escrow.
     (2) A public body may not issue advance
refunding bonds in a principal amount in excess of the minimum principal amount
that is estimated at the time of sale to be necessary:
     (a) To purchase a principal amount of
government obligations that is, together with the interest earnings thereon,
sufficient to pay the installments of principal, interest and redemption
premiums, if any, on the bonds being refunded when due in accordance with the
advance refunding plan; and
     (b) To pay all costs in connection with
issuing the advance refunding bonds and obtaining credit enhancement devices.
     (3) If the public body that issues advance
refunding bonds receives an amount of proceeds that exceeds the actual amount
required under subsection (2) of this section, the public body must use the
excess amount of proceeds to pay interest on the advance refunding bonds.
     (4) Before applying advance refunding bond
proceeds to the purposes for which the refunding bonds have been issued, a
public body may invest advance refunding bond proceeds, together with other
moneys set aside for the payment of the bonds to be refunded, only in
government obligations.
     (5) The public body shall make investments
pursuant to subsection (4) of this section at times and in a manner required to
provide funds sufficient to pay principal, interest and redemption premiums, if
any, in accordance with the advance refunding plan. [2007 c.783 §57]
     287A.380
Tax levy to pay maturing general obligation advance refunding bonds. (1) Pursuant to ORS 287A.140, a public body
shall levy taxes to pay the maturing interest and principal of advance
refunding bonds that are general obligation bonds.
     (2) Notwithstanding ORS 287A.140 or any
other provision of law, a public body may not cause a tax to be levied to pay
the maturing interest and principal of general obligation bonds that have been
defeased as described in ORS 287A.195 (2), unless the amounts held to defease
the bonds are insufficient. [2007 c.783 §59]
WARRANTS AND
CHECKS; INTEREST; UNCLAIMED WARRANTS AND CHECKS; MASTER WARRANTS
     287A.472
Interest on municipal warrants not paid on presentation. All warrants for payment of money issued by
cities and other municipalities that are not paid upon presentation and so
indorsed shall draw interest at the legal rate after such indorsements but
municipalities may by proper resolution fix the rate at less than the legal
rate and may make such interest payable semiannually. [Formerly 287.452]
     287A.474
Warrants and checks more than two years old; report by fiscal officer; claim by
owner. (1) The county fiscal
officer shall prepare a report of all warrants and checks issued more than two
years prior to July 1 of that year which have not been paid, pursuant to ORS
98.352.
     (2) The lawful owner of any warrant or
check included in any list referred to in subsection (1) of this section, not
presented to the county treasurer for payment and not paid, thereafter may file
a claim with the Department of State Lands in the manner provided by ORS 98.392
and 98.396. [Formerly 287.454]
     287A.482
Definitions for ORS 287A.482 to 287A.488. As used in ORS 287A.482 to 287A.488:
     (1) “County fiscal officer” means:
     (a) The county accountant in counties
where such office is established by law.
     (b) The county clerk in counties not
having a county accountant.
     (2) “Master warrant” means a warrant or
order issued and drawn pursuant to ORS 287A.486. [Formerly 287.482]
     287A.484
Master warrant procedure authorized if warrants would be not paid. Whenever the county fiscal officer audits
and approves a claim and issues a warrant therefor and at the same time or
subsequently ascertains that the county treasurer has not sufficient moneys in
the particular fund of the county from which the claim so approved and allowed
is payable and that the warrant as issued against that fund for the payment of
the claim would be indorsed “Not Paid for Want of Funds,” the county fiscal
officer may, with approval by resolution of the county court or the board of
county commissioners, issue a master warrant to any person for the purpose of
obtaining money to pay such claim. The money shall be obtained only in the
manner provided in ORS 287A.486. [Formerly 287.484]
     287A.486
Procedure. (1) The county
fiscal officer shall draw a master warrant in the amount of one or more claims
referred to in ORS 287A.484, payable to any person who is willing to accept the
master warrant, and such person shall, upon delivery of the master warrant duly
indorsed “Not Paid for Want of Funds,” pay to the county treasurer the full
amount for which the master warrant is drawn.
     (2) The amount paid under subsection (1)
of this section shall constitute a special fund to be used toward the payment
of warrants issued under ORS 287A.484 by the county fiscal officer in payment
of claims audited and approved and included in the amount of any master warrant
issued to the person advancing such moneys. [Formerly 287.486]
     287A.488
Taxes must be levied for payment of claims included in master warrant. No master warrant shall be issued under ORS
287A.482 to 287A.488 unless taxes have been levied for the payment of all
claims included in the master warrant and such taxes are in the process of
being collected at the time of the issuance of the master warrant. [Formerly
287.488]
     287A.630
     (a) The State Treasurer or the State
TreasurerÂ’s designee.
     (b) Three public body finance officers
appointed by the Governor:
     (A) One of whom is an individual
recommended by the Association of Oregon Counties.
     (B) One of whom is an individual
recommended by the League of Oregon Cities.
     (C) One of whom is an individual
recommended by the Oregon School Boards Association.
     (c) One representative of special
districts appointed by the Governor.
     (d) Two public members not represented in
the other categories of appointment, appointed by the Governor.
     (2) The term of office of an appointed
member is four years, but appointed members serve at the pleasure of the
Governor. A member is eligible for reappointment for no more than one
additional term.
     (3) Before the expiration of the term of
an appointed member, the Governor shall appoint a successor to assume the
duties of the member on July 1 next following. In case of a vacancy for any
cause, the Governor shall make an appointment to become effective immediately
for the unexpired term.
     (4) The Governor shall designate one of
the appointed members to serve a one-year term as chairperson, subject to
reappointment.
     (5) Appointed members of the commission
are entitled to compensation and expenses as provided in ORS 292.495. [Formerly
287.030]
     287A.632
Meetings; quorum; personnel.
(1) The Oregon Municipal Debt Advisory Commission shall meet:
     (a) At the call of the chairperson; or
     (b) At the request of:
     (A) A majority of the members;
     (B) The State Treasurer; or
     (C) The Governor.
     (2) A majority of all members of the
advisory commission constitutes a quorum for the transaction of business.
     (3) The office of the State Treasurer
shall provide the commission with administrative and clerical assistance
required by the commission. [Formerly 287.032]
     287A.634
Powers and duties of commission; rules; fees. (1) The Oregon Municipal Debt Advisory Commission may:
     (a) Provide assistance and consultation,
upon request of the state or a public body, 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 issuerÂ’s credit.
     (b) Collect, maintain and provide
financial, economic and social data on public bodies pertinent to their ability
to issue and pay bonds.
     (c) Collect, maintain and provide
information on bonds sold and outstanding and serve as a clearinghouse for all
local bond issues.
     (d) Maintain contact with municipal bond
underwriters, credit rating agencies, investors and others to improve the
market for public body bond issues.
     (e) Undertake or commission studies on
methods to reduce the costs of state and local bond issues.
     (f) Recommend changes in state law and
local practices to improve the sale and servicing of local bonds.
     (g) Perform any other function required or
authorized by law.
     (h) Pursuant to ORS chapter 183, adopt
rules necessary to carry out its duties.
     (2) The commission shall publish:
     (a) A periodic newsletter describing
proposed bond issues, bond sales, refundings, credit rating changes and other
information relating to municipal bonds that is pertinent to issuers,
underwriters, investors and the public.
     (b) An annual report describing and
evaluating the operations of the commission during the preceding year.
     (3) The commission may charge reasonable
fees for providing services under subsection (1) of this section.
     (4) The commission shall transfer the
amounts received under this section to the State Treasurer for deposit in the
Miscellaneous Receipts Account in the General Fund for the State Treasurer
described in ORS 286A.016. The moneys deposited in the account pursuant to this
section are continuously appropriated to the State Treasurer for payment of
expenses of the State Treasurer in providing services to the commission
pursuant to ORS 287A.632. [Formerly 287.034]
     287A.640
Notice to commission of proposed issues; duty of public bodies to assist;
rules. (1) The Oregon
Municipal Debt Advisory Commission may, by rule, require a public body to
provide the commission with prior notice of proposed issuance of new bonds in a
form and at times specified by the commission.
     (2) To assist the commission in carrying
out its duties, a public body shall verify, at the request of the commission,
the information maintained by the commission or the State Treasurer on the
public bodyÂ’s outstanding bonds. [Formerly 287.040]
_______________
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