Chapter 559 Oregon Laws 1999

Session Law

AN ACT

SB 198

Relating to public finance; creating new provisions; and amending ORS 223.845, 271.310, 271.390, 280.060, 288.592, 288.594, 288.605, 288.610, 288.620, 288.625, 288.630, 288.637, 288.875, 288.885 and 288.915.

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

SECTION 1. ORS 271.390 is amended to read:

271.390. (1) As used in this section:

(a) "Municipality" has the meaning given that term in ORS 288.515.

(b) "Real or personal property" means land, improvements to land, structures, fixtures, personal property, including furnishings, equipment and computer software purchases and licenses, and any costs that may be capitalized under generally accepted accounting principles and treated as costs of personal property.

[(1)] (2) Any [county, city or district described in ORS 198.010 or 198.180 (1) to (5)] municipality may enter into contracts for the leasing, rental or financing of any real or personal property that the governing body determines is needed, including contracts for rental, long term leases under an optional contract for purchase, financing agreements with vendors, financial institutions or others, or for purchase of any property. Leases or contracts made by a [city, county or district] municipality shall be made subject to the terms of its charter, if applicable. If authorized by the governing body, such contracts may:

(a) Provide that the obligations of the [government unit] municipality under the contract shall be secured by a mortgage on or other security interest in the property to be leased, rented, purchased or financed under the contract.

(b) Provide that the obligations of the [government unit] municipality under the contract shall be payable out of all or any designated portion of the lawfully available revenues of the [government unit] municipality, which revenues may be pledged to the payment of those obligations.

(c) If authorized by the charter of the [county, city or district] municipality, contain a covenant on the part of the [county, city or district] municipality to budget and appropriate in each fiscal year, in accordance with law, sums sufficient to pay when due the amounts owing under the contract.

(d) Provide for the issuance of certificates of participation in the payment obligations of the [government unit] municipality under the contract and contain such other covenants, agreements and provisions as are determined to be necessary or appropriate in order to better secure the obligations of the [government unit] municipality.

[(2)] (3) The lien of any such pledge, mortgage or security interest shall be valid and binding from the time the contract is entered into. The revenues or property shall be immediately subject to the lien without physical delivery, filing or other act, and the lien shall be superior to all other claims and liens of any kind whatsoever. Subject to the terms, provisions and limitations of the contract, the lien may be foreclosed by a proceeding brought in the circuit court of the county in which the [government unit] municipality or the greater part thereof is located, and any tangible real or personal property subject to the lien may be sold upon the order of the court. The proceeds of the sale shall first be applied to the payment of the costs of foreclosure and then to the amounts owing under the contract, with any balance being paid to the [government unit] municipality. The authority granted by this section is in addition to, and not in lieu of, any other statutory or charter authority.

[(3)] (4) [Any municipality, as defined in ORS 288.515, that is authorized by law to enter into lease purchase or installment purchase agreements may, in lieu of entering into such an agreement, enter into a financing agreement.] Any municipality that has entered into a lease purchase or installment purchase agreement may enter into a financing agreement to refinance the municipality's obligations under the lease purchase or installment purchase agreement.

(5) The estimated weighted average life of a financing contract executed under this section shall not exceed the estimated dollar weighted average life of the real or personal property that is financed with the contract.

SECTION 2. ORS 271.310 is amended to read:

271.310. (1) Except as provided in subsection (2) of this section, whenever any political subdivision possesses or controls real property not needed for public use, or whenever the public interest may be furthered, a political subdivision may sell, exchange, convey or lease for any period not exceeding 99 years all or any part of their interest in the property to a governmental body or private individual or corporation. The consideration for the transfer or lease may be cash or real property, or both.

(2) If the ownership, right or title of the political subdivision to any real property set apart by deed, will or otherwise for a burial ground or cemetery, or for the purpose of interring the remains of deceased persons, is limited or qualified or the use of such real property is restricted, whether by dedication or otherwise, the political subdivision may, after the county court or governing body thereof has first declared by resolution that such real property is not needed for public use, or that the sale, exchange, conveyance or lease thereof will further the public interest, file a complaint in the circuit court for the county in which such real property is located against all persons claiming any right, title or interest in such real property, whether the interest be contingent, conditional or otherwise, for authority to sell, exchange, convey or lease all or any part of such real property. The resolution is prima facie evidence that such real property is not needed for public use, or that the sale, exchange, conveyance or lease will further the public interest. The action shall be commenced and prosecuted to final determination in the same manner as an action not triable by right to a jury. The complaint shall contain a description of such real property, a statement of the nature of the restriction, qualification or limitations, and a statement that the defendants claim some interest therein. The court shall make such judgment as it shall deem proper, taking into consideration the limitation, qualifications or restrictions, the resolution, and all other matters pertinent thereto. Neither costs nor disbursements may be recovered against any defendant.

(3) Unless the governing body of a political subdivision determines under subsection (1) of this section that the public interest may be furthered, real property needed for public use by any political subdivision owning or controlling the property shall not be sold, exchanged, leased or conveyed under the authority of ORS 271.300 to 271.360, except that it may be exchanged for property which is of equal or superior useful value for public use. Any such property not immediately needed for public use may be leased if, in the discretion of the governing body having control of the property, it will not be needed for public use within the period of the lease.

(4) The authority to lease property granted by this section includes authority to lease property not owned or controlled by the political subdivision at the time of entering into the lease. Such lease shall be conditioned upon the subsequent acquisition of the interest covered by the lease.

SECTION 3. ORS 223.845 is amended to read:

223.845. (1) [For the purposes of] If a city establishes an off-street motor vehicle parking facility under ORS 223.810, [a] the city may operate [a] the off-street motor vehicle parking facility or lease the [same] facility under ORS 223.820[, as the city may determine]. [In no event shall] The city may not operate [any] service concessions in an off-street motor vehicle parking facility. [In case the] If a city [operates a parking facility, it may provide, and if] issues revenue bonds [are issued] under ORS 223.825 to finance the acquisition and construction of [such] an off-street motor vehicle parking facility, [it must provide,] the city shall provide, for as long as those revenue bonds are outstanding, that the revenues derived from the operation of the off-street motor vehicle parking facility [shall] be disbursed by the city for some or all of the following purposes:

[(1)] (a) Payment of interest on and retirement of principal of bonds issued by the city for financing the acquisition or construction of [such facility] the off-street motor vehicle parking facility or other parking facilities of the city.

[(2)] (b) Payment of the necessary costs and expenses of operating the [facility] off-street motor vehicle parking facility and other parking facilities of the city.

[(3)] (c) Creation and maintenance of a reserve account to make necessary replacements to the off-street motor vehicle parking facility and other parking facilities of the city.

[(4)] (d) Payment to the taxing bodies in lieu of taxes an amount equal to the ad valorem taxes that would be derived from the off-street motor vehicle parking facility if under private ownership.

[(5)] (e) Reimbursement of owners of real property for special assessments paid by them and levied against real property to finance the off-street motor vehicle parking facility.

[(6)] (f) Payment to the city of a fair return on its investment in [the facility] parking facilities for the purpose of making additional parking and traffic improvements.

(2) [In case the revenues produce more than sufficient moneys] If an off-street motor vehicle parking facility generates more revenue than required for the [matters mentioned in subsections (1) to (6) of this section, then] purposes described in subsection (1) of this section, the governing body of the city shall reduce the rates charged for the use of the off-street motor vehicle parking facility.

SECTION 4. ORS 280.060 is amended to read:

280.060. (1) Upon approval of a majority of the electors of a subdivision in a manner that qualifies under section 11 (8), Article XI of the Oregon Constitution, a subdivision may levy local option taxes serially outside the limitation imposed by section 11 (3), Article XI, Oregon Constitution, over the period of time that is authorized by the electors. The amount levied each year shall be:

(a) Uniform, or substantially so, throughout the period during which the taxes are levied; or

(b) Computed annually at the same dollar rate per thousand dollars assessed value in the subdivision, such rate to be declared in and made a part of the ballot measure to be submitted to the electorate.

(2)(a) If subsection (1)(a) of this section applies, the period of time authorized by the electors shall not exceed five years or, if the local option tax is for capital projects, the lesser of:

(A) The expected useful life of the capital projects to be financed by the tax; or

(B) Ten years.

(b) A local option tax for capital projects does not exceed the expected useful life of the capital projects financed by the tax if the estimated weighted average life of the tax does not exceed the estimated dollar weighted average of the capital assets comprising the capital projects that are to be financed by the tax. The estimated dollar weighted average life of capital projects shall be calculated under rules of the Department of Revenue that ensure that a local option tax for capital projects is levied for no more than 10 years and no more than the useful life of the component of the capital projects financed by the tax that has the longest useful life.

(3)(a) All local option taxes authorized by ORS 280.040 to 280.145 that are for capital projects and that have a term of more than five years shall be submitted to electors separately from local option taxes with a term of five years or less.

(b) For purposes of this subsection, "capital project" means the acquisition of land upon which to construct [a building] an improvement, the acquisition of a building, the acquisition or construction of improvements, the acquisition of an addition to a building which increases the square footage of the building, the construction of a building, the construction of an addition to an existing building which increases the square footage of the building or the acquisition of and installation of machinery and equipment which will become an integral part of a building or an addition to a building, the purchase of furnishings, equipment or other tangible property with an expected useful life of more than one year or a combination of those items.

(4) If a ballot measure authorizing a local option tax states that the taxing district may issue bonds that are payable from that tax, voter approval of the tax shall constitute voter approval of the bonds, except that the approval shall not entitle the taxing district to collect a greater amount of tax than the taxing district would have been entitled to collect if the ballot measure only authorized local option taxes and did not authorize bonds. If the local option tax is approved by voters in a manner that qualifies under section 11 (8), Article XI of the Oregon Constitution, then the taxing body may issue the bonds in a principal amount that, together with the estimated interest to be paid on the bonds while the bonds are outstanding, does not exceed the revenues estimated to be received from the local option tax levy. A taxing district may pledge the revenues received from the local option tax and the taxing district's full faith and credit to pay bonds authorized under this subsection.

SECTION 5. ORS 288.594 is amended to read:

288.594. (1) If a public body is authorized by [statute or municipal charter] law to pledge its revenues or other funds to secure bonds or other obligations, the pledge shall be valid and binding from the time the pledge is made, revenues and other funds so pledged shall be immediately subject to the lien of the pledge without physical delivery, filing or other act and the lien of pledge shall be superior to all other claims and liens of any kind whatsoever. Any initiative or referendum measure approved by the electors of the public body that changes statutory or municipal charter provisions affecting rates, fees, tolls, rentals or other charges shall not be given any force or effect if to do so would impair existing covenants made with holders of existing bonds or other obligations regarding the imposition, levy or collection of such rates, fees, tolls, rentals or other charges pledged to secure outstanding bonds or other obligations.

(2) [This section shall apply to all bonds and obligations issued on and after September 27, 1987, unless another provision of law grants greater rights to the beneficiary of a pledge for such bonds or obligations. This section shall apply to all bonds and obligations issued before September 27, 1987, unless another provision of law grants greater rights to the beneficiary of a pledge for such bonds or obligations, or unless the rights of third parties with respect to pledged revenues or funds has vested before September 27, 1987] If a public body is authorized by law to pledge its revenues to secure revenue bonds or other borrowings, the public body may enter into rate covenants. Rate covenants authorized by this subsection may obligate the public body to impose rates and charges 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 the revenue bonds and other borrowings, plus an additional amount that is reasonably required to obtain favorable terms for the revenue bonds and other borrowings. Without regard to whether a rate covenant was entered into before or after the effective date of this 1999 Act, a rate covenant authorized by this subsection shall bind the public body making the rate covenant and shall be enforceable against the public body in accordance with the terms of the rate covenant.

SECTION 6. Section 7 of this 1999 Act is added to and made a part of ORS chapter 288.

SECTION 7. When calculating compliance with any constitutional, statutory or charter debt limit:

(1) The amount of interest to be paid on bonds, whether current or deferred, shall not be taken into account; and

(2) For any zero coupon bond or other original issue discount bond on which periodic interest payments are not made, only the accreted value of the bonds on the date the bonds are issued shall be taken into account.

SECTION 8. Section 9 of this 1999 Act is added to and made a part of ORS chapter 287.

SECTION 9. (1) Except when a charter provides a lower limit upon the issuance of limited tax bonded indebtedness, a county shall not have at any one time outstanding limited tax bonded indebtedness in a principal amount that exceeds one percent of the real market value of all taxable property within the county, computed in accordance with ORS 308.207, after deducting from the outstanding principal amount of such indebtedness the total amount of cash funds and sinking funds that are available for payment of the principal.

(2) As used in this section:

(a)(A) "Bonded indebtedness" means any formally executed written agreement representing a promise by a county to pay to another a specified sum of money at a specified date or dates at least one year in the future. "Bonded indebtedness" includes any lease, lease purchase agreement, contract or financing agreement authorized by ORS 271.390.

(B) "Bonded indebtedness" does not include a general obligation bond, as defined in ORS 288.150, or any obligation for which the holder's payment recourse in any eventuality is only to a specified fund from which payment of principal, premium, if any, and interest on the obligation must be paid.

(b) "Limited tax bonded indebtedness" means a bond or other obligation that is a full faith and credit obligation, and that is payable from any taxes that the issuer may levy within the limitations of section 11b, Article XI of the Oregon Constitution, and either within or outside the limitations of section 11, Article XI of the Oregon Constitution. "Limited tax bonded indebtedness" includes any bonded indebtedness incurred by a county that, by the express terms of such bonded indebtedness:

(A) Requires the county to budget and appropriate in each fiscal year moneys sufficient to pay the principal, premium, if any, and interest on the bonded indebtedness due during the fiscal year.

(B) Allows the holders of the bonded indebtedness, in addition to any other available remedies, to bring suit to compel the county to appropriate funds to pay the principal, premium, if any, and interest on the bonded indebtedness due during a fiscal year when the county governing body fails or refuses to appropriate moneys for such purpose in the fiscal year.

SECTION 10. ORS 288.592 is amended to read:

288.592. (1) As used in this section, "forward current refunding" means execution and delivery of a forward delivery bond purchase agreement or similar instrument under which a public body contracts to sell current refunding bonds at a specified future date.

[(1)] (2) To refund outstanding bonds, a public body may issue and deliver bonds to refund [outstanding bonds] all or any portion of the outstanding bonds of the public body and to execute and deliver any contract or agreement that is necessary or desirable to currently refund or to effect a forward current refunding of bonds. The proceeds of the refunding bonds shall be used solely to pay the principal of, and interest and premium, if any, on the bonds being refunded, [plus] costs of issuing the refunding bonds plus not more than six months of interest on the refunding bonds. The proceeds of the refunding bonds shall be used to pay debt service on the refunded bonds within one year after the refunding bonds are issued.

[(2)] (3) The State Treasurer may adopt rules regulating the issuance of refunding bonds and forward current refundings under this section. If the State Treasurer adopts rules, [no] refunding bonds may not be issued and a forward current refunding agreement may not be executed under this section unless the issuance or execution complies with the rules adopted by the State Treasurer.

[(3)] (4) Bonds issued to refund revenue bonds that were issued pursuant to ORS 288.815 shall be considered to have been issued in full compliance with ORS 288.815, and the issuance of the refunding bonds shall not be subject to ORS 288.815. However, a forward current refunding or the issuance of the refunding bonds must be authorized by ordinance or resolution of the issuing public body.

SECTION 11. ORS 288.605 is amended to read:

288.605. As used in ORS 288.605 to 288.695, unless the context requires otherwise:

(1) "Advance refunding bonds" means bonds issued for the purpose of refunding bonds first subject to redemption or maturing one year or more from the date of the advance refunding bonds.

(2) "Bond" means any revenue bond, general obligation bond or certificate of participation.

(3) "Certificate of participation" means:

(a) Any financing agreement entered into by the State of Oregon, an agency or institution of the State of Oregon under ORS 283.085 to 283.092 or a public corporation under ORS chapter 353, or any certificate of participation issued under such financing agreement.

(b) Any financing agreement entered into by a local public body authorized by law to enter into financing agreements, or any certificate of participation issued under such financing agreements.

(4) "Financing agreement" means a lease purchase agreement, an installment sale agreement, a loan agreement or any other agreement to finance real or personal property that is or will be owned and operated by a public body, or to refinance previously executed financing agreements.

(5) "Forward current refunding" means execution and delivery of a forward delivery bond purchase agreement or similar instrument under which a public body contracts to sell current refunding bonds at a specified future date.

[(5)] (6) "General obligation bond" means any bond, note, warrant, certificate of indebtedness or other obligation of a public body which constitutes an indebtedness within the meaning of the constitutional or statutory debt limitation and which is secured by the unlimited taxing power of the public body.

[(6)] (7) "Governing body" means the council, commission, board or other legislative body of the public body designated in ORS 288.605 to 288.695 in which body the legislative powers of the public body are vested, provided that with respect to the state it shall mean the State Treasurer.

[(7)] (8) "Government obligations" means any of the following:

(a) Direct obligations of or obligations the principal of and interest on which are unconditionally guaranteed by the United States of America and bank certificates of deposit secured by such obligations;

(b) Bonds, debentures, notes, participation certificates or other obligations issued by the banks for cooperatives, the federal intermediate credit bank, the federal home loan bank system, the export-import bank of the United States, federal land banks or the federal national mortgage association;

(d) Obligations of financial institutions insured by the Federal Deposit Insurance Corporation to the extent insured or to the extent guaranteed as permitted under any other state law; or

(e) General obligation bonds of the State of Oregon bearing a rating from a nationally recognized rating service at least equal in quality to the rating assigned by such service to the bonds being refunded.

[(8)] (9) "Issuer" means the public body issuing any bond or bonds.

[(9)] (10) "Ordinance" means an ordinance of a public body or resolution or other instrument by which the governing body of the public body exercising any power takes formal action and adopts legislative provisions and matters of some permanency.

[(10)] (11) "Public body" means the State of Oregon, its agencies, institutions, political subdivisions, municipal, quasi-municipal and public corporations and intergovernmental entities created by intergovernmental agreements under ORS chapter 190 authorized by law to issue general obligation bonds or revenue bonds or to enter into financing agreements and cause certificates of participation to be issued under such financing agreements.

[(11)] (12) "Revenue bond" means any bond, note, warrant, certificate of indebtedness or other obligation for the payment of money issued by a public body or any predecessor of any public body and which is payable from designated revenues or a special fund but excluding any obligation constituting an indebtedness within the meaning of the constitutional or statutory debt limitations and any obligation payable solely from special assessments or special assessments and a guaranty fund.

[(12)] (13) "Special revenue bond" means any bond, note, warrant, certificate of indebtedness or other obligation for the payment of money issued by a public body or any predecessor of any public body which is payable from designated revenues or a special fund and which is subject to statutory debt limitations.

SECTION 12. ORS 288.610 is amended to read:

288.610. (1) The Legislative Assembly finds that:

(a) It is desirable to afford public bodies the authority to reduce the costs on their outstanding bonds, thereby resulting in a savings in the costs of capital expenditures of a public body; that such a savings is for the benefit of the people of the state;

(b) Legislation permitting a public body to pay and discharge all or any part of outstanding bonds in arrears, or about to become due and for which sufficient funds are not available, or to effect a reorganization of its permanent debt, or to effect a savings is desirable to protect the credit of the state and its public bodies; and

(c) To determine the extent of the need [for] to issue advance refunding bonds or to effect a forward current refunding and to insure that issuance of such bonds is to the advantage of and in the best interests of and for the general welfare of the state and all public bodies, it is desirable that the State Treasurer approve of the issuance of all such bonds.

(2) The Legislative Assembly declares that the issuance of advance refunding bonds [is a matter] and the authority to effect a forward current refunding are matters of general statewide concern and ORS 288.605 to 288.695 preempts all statutory or charter authority to issue advance refunding bonds or to effect a forward current refunding, except that ORS 288.605 to 288.695 is not applicable to nor shall it affect advance refunding bonds issued prior to October 4, 1977.

SECTION 13. ORS 288.620 is amended to read:

288.620. (1) Following adoption of an ordinance or resolution approving a refunding plan to issue advance refunding bonds or to effect a forward current refunding, the refunding plan shall be submitted to the State Treasurer for review and approval. After review of the proposed refunding plan, the State Treasurer shall advise the public body, in writing, whether the sale of refunding bonds is authorized. No refunding bonds may be issued under ORS 288.605 to 288.695 unless authorized by the State Treasurer pursuant to this section; provided, that failure to notify the public body within 30 business days after receipt of the refunding plan shall be deemed an authorization to proceed. Except as provided in ORS 288.625, in making determinations under this section the State Treasurer shall consider all relevant factors, including the purposes for which the refunding plan is adopted, the terms of the refunding plan, the effects (if any) of applicable federal laws and the views of recognized experts in the field.

(2) The State Treasurer may delegate the authority to approve refunding plans, including approval of the investment of the refunding bond proceeds, to the Oregon Municipal Debt Advisory Commission.

(3) The administrative expenses of the State Treasurer incurred in reviewing refunding plans shall be charged against the bond proceeds, or may be paid by the public body from such other funds as may be available.

SECTION 14. ORS 288.625 is amended to read:

288.625. Advance refunding bonds may be issued or a forward current refunding may be effected for general obligation, revenue or special revenue bonds [may be issued], at the discretion of the governing body, in the manner provided in ORS 287.016 to 287.026 [provided, however, that for the purposes of this section, "four hours" as used in ORS 287.026 means four business hours, or negotiated at a price and on terms the governing body considers advisable].

SECTION 15. ORS 288.630 is amended to read:

288.630. Any governing body refunding bonds under ORS 288.605 to 288.695 may seek assistance on matters pertaining to the issuance of the refunding bonds or a forward current refunding from the Oregon Municipal Debt Advisory Commission pursuant to ORS 287.020 and 287.034.

SECTION 16. ORS 288.637 is amended to read:

288.637. (1) Notwithstanding any other provision of ORS 288.605 to 288.695:

(a) The governing body may permit redemption of bonds to be refunded at maturity or any earlier time and permit advance refunding of bonds or a forward current refunding of bonds which are not callable prior to maturity notwithstanding the conditions and requirements of ORS 288.635.

(b) The governing body may permit advance refunding of advance refunding bonds or may effect a forward current refunding notwithstanding the conditions and requirements of ORS 288.635.

(2) The governing body shall determine whether each proposed redemption, [or] advance refunding or forward current refunding under subsection (1) of this section furthers the policies expressed in ORS 288.610 and 288.615. If the governing body determines that the redemption, [or] advance refunding or forward current refunding furthers such policies, the governing body may proceed with the redemption, [or] advance refunding or forward current refunding authorized by this section.

SECTION 17. ORS 288.875 is amended to read:

288.875. (1) As used in this section, "competitive bidding process of the public body" means a process that is formally approved by the public body for notifying multiple potential purchasers, soliciting firm proposals from those potential purchasers, including interest rates and prices, and awarding the sale to the bidder offering the most favorable terms to the public body.

[(1)] (2) For public competitive bid sales, the public body shall either solicit bids in compliance with the competitive bidding process of the public body or prepare and publish a notice of revenue bond sale which shall specify:

(a) The time, date and place where bids are to be received, and considered and acted upon, the total amount of revenue bonds, and the denominations of the revenue bonds;

(b) The issue date, maturity dates and amounts, interest payment dates, and place of payment of the revenue bonds;

(c) The date of optional redemption, if any, the call price premium, if any, and the order of revenue bond redemption and place of redemption;

(d) The maximum effective rate of interest and the minimum percentage of par value of the revenue bonds which may be bid;

(e) The required good faith deposit [by], which may be in the form of a certified or cashier's check on [an insured institution, as defined in ORS 706.008,] a bank that is doing business in this state or a bond or other commitment that the public body determines is adequate to protect the public body against failure by a bidder to comply with the terms of a bid, in the amount of not less than two percent of the par value of the revenue bonds, or $500,000, whichever is the lesser;

(f) Such constraints on the coupon rates as the issuer may impose;

(g) The interest basis and definition thereof on which the revenue bond bids are to be awarded;

(h) The name of bond counsel, if any, who will furnish the legal opinion;

(i) Registration provision, if any;

(j) Estimated delivery date and place;

(k) Such other conditions as the public body may impose;

(L) The statute and ordinance, if any, pursuant to which the revenue bonds are to be issued; and

(m) The purpose of the revenue bonds.

[(2)] (3) Except when bonds are sold in compliance with the competitive bidding process of the public body, bids submitted at public competitive bid sales must be bids that are:

(a) Submitted for all revenue bonds offered for sale;

(b) Unconditional; and

(c) Submitted either [for all revenue bonds offered for sale. All bids are to be unconditional and to be submitted] in writing in a sealed envelope clearly marked as a proposal for revenue bonds or telecopied or otherwise submitted to the public body in a manner that avoids public disclosure of the content of bids before the deadline for bid submission.

SECTION 18. ORS 288.885 is amended to read:

288.885. Except when the public body is the State of Oregon or when the revenue bonds are sold in accordance with the competitive bidding process of the public body, as defined in ORS 288.875, for any public competitive bid sale [except for the state]:

(1) The issuer shall cause the notice of revenue bond sale, or a summary thereof, to be published in one or more newspapers having general circulation within the boundaries of the issuer not fewer than 10 calendar days preceding the date of the bond sale.

(2) In addition to the publication described in subsection (1) of this section, a notice or summary of the notice shall be published in a business and financial newspaper published in Portland, Oregon, not fewer than 10 calendar days preceding the date of bond sale. If a summary is published under this subsection, it must specify where the complete notice of sale is published or available.

(3) For issues of $10 million or more par value, a notice or summary of the notice of bond sale shall be submitted for publication in at least one issue of a national financial newspaper not less than 10 calendar days preceding the date of bond sale.

(4) Copies of the complete notice of sale shall be furnished upon request to bidders, investors and the public.

(5) If circumstances warrant, the State Treasurer may on an individual sale basis approve other terms and conditions for the public notice of revenue bond sale in lieu of or in addition to those specified in subsections (1) to (4) of this section.

SECTION 19. ORS 288.915 is amended to read:

288.915. (1) For all public competitive bid sales, the bonds shall be awarded on the basis described in the notice of sale or in the solicitation of bids that is part of the competitive bidding process of the public body, as defined in ORS 288.875. All bids must be entered into the public record of the public body issuing the revenue bonds.

(2) Except when the revenue bonds are sold in compliance with the competitive bidding process of the public body:

(a) All bids shall be publicly opened at the time and place specified in the notice of sale.

(b) The revenue bonds shall be sold to the responsible bidder whose bid will result in the lowest interest cost to the public body, as defined in the manner set forth in the notice of sale, and taking into consideration any premium or discount bid.

(c) Unless all bids are rejected, the sale must be acted upon within four hours of the time the bids are opened.

(3) The issuer may reject any or all bids and continue the sale date to a date certain or readvertise the sale of revenue bonds in the manner determined by the issuer or by an authorized representative of the issuer. The issuer shall make public the reasons why any or all bids are rejected.

(4) The preliminary official statement required for revenue bonds by ORS 288.865 shall not be required for any issue for which a commitment to purchase has been received from any state or federal agency unless such state or federal agency requires the preparation of such document. If any other purchaser is awarded the sale of the revenue bonds offered at a sale for which a commitment to purchase such bonds has been received from a state or federal agency, an official statement shall be prepared prior to the delivery of the bonds if such other purchaser so requests.

SECTION 20. Section 21 of this 1999 Act is added to and made a part of ORS chapter 294.

SECTION 21. (1) As used in this section, "bond" and "certificate of participation" have the meanings given those terms in ORS 288.605.

(2) Notwithstanding ORS 294.145 or any other law or charter provision, a municipality may invest proceeds of bonds or certificates of participation and amounts held in a bond or certificate of participation payment, reserve or proceeds fund or account in float agreements, debt service deposit agreements, forward investment agreements, guaranteed investment contracts or other investment agreements if the agreements or contracts:

(a) Produce a guaranteed rate of return;

(b) Are fully collateralized by direct obligations of, or obligations guaranteed by, the United States; and

(c) Require that the collateral be held by the municipality, an agent of the municipality or a third-party safekeeping agent.

SECTION 22. The amendments to ORS 271.390 by section 1 of this 1999 Act do not affect a contract entered into before the effective date of this 1999 Act. However, the amendments to ORS 271.390 by section 1 of this 1999 Act apply to a renewal or extension of an existing contract on or after the effective date of this 1999 Act as well as to a new contract entered into on or after the effective date of this 1999 Act.

Approved by the Governor July 8, 1999

Filed in the office of Secretary of State July 8, 1999

Effective date October 23, 1999

__________