Bill Text: OR SB18 | 2011 | Regular Session | Enrolled
Bill Title: Relating to borrowing for capital costs of school districts; appropriating money; and declaring an emergency.
Spectrum: Unknown
Status: (Passed) 2011-08-03 - Effective date, August 2, 2011. [SB18 Detail]
Download: Oregon-2011-SB18-Enrolled.html
76th OREGON LEGISLATIVE ASSEMBLY--2011 Regular Session
Enrolled
Senate Bill 18
Printed pursuant to Senate Interim Rule 213.28 by order of the
President of the Senate in conformance with presession filing
rules, indicating neither advocacy nor opposition on the part
of the President (at the request of State Treasurer Ted
Wheeler)
CHAPTER ................
AN ACT
Relating to borrowing for capital costs of school districts;
creating new provisions; amending ORS 348.696, 461.540 and
461.558 and section 8, chapter 21, Oregon Laws 2010, section
13, chapter 96, Oregon Laws 2010, and section 5, chapter 104,
Oregon Laws 2010; repealing section 9, chapter 21, Oregon Laws
2010; appropriating money; and declaring an emergency.
Be It Enacted by the People of the State of Oregon:
SECTION 1. { + As used in sections 1 to 6 of this 2011 Act:
(1) 'Article XI-P bonds' means general obligation bonds issued
under the authority of Article XI-P of the Oregon Constitution.
(2) 'Bond-related costs' means:
(a) The costs of paying the principal of, the interest on and
the premium, if any, on Article XI-P bonds.
(b) The costs and expenses of issuing, administering and
maintaining Article XI-P bonds including, but not limited to, the
costs and expenses of:
(A) Redeeming Article XI-P bonds.
(B) Paying amounts due in connection with credit enhancement
devices or agreements for exchange of interest rates.
(C) Paying the fees, administrative costs and expenses of the
State Treasurer, the Oregon Department of Administrative Services
and the Department of Education, including the costs of
consultants or advisors retained by the State Treasurer, the
Oregon Department of Administrative Services or the Department of
Education for the Article XI-P bonds.
(c) The costs of funding reserves for the Article XI-P bonds.
(d) Capitalized interest for the Article XI-P bonds.
(e) Rebates or penalties due to the United States in connection
with the Article XI-P bonds.
(f) Any other costs or expenses that the State Treasurer, the
Oregon Department of Administrative Services or the Department of
Education determines are necessary or desirable in connection
with issuing and maintaining the Article XI-P bonds.
(3) 'Capital costs' means costs of land and of other assets
having a useful life of more than one year, including costs
associated with acquisition, construction, improvement,
remodeling, furnishing, equipping, maintenance or repair. + }
Enrolled Senate Bill 18 (SB 18-A) Page 1
SECTION 2. { + (1) In accordance with the applicable
provisions of ORS chapter 286A, the State Treasurer, with the
concurrence of the Director of the Oregon Department of
Administrative Services, may issue Article XI-P bonds:
(a) At the request of the Superintendent of Public Instruction
for the purposes specified in Article XI-P of the Oregon
Constitution, plus an amount determined by the State Treasurer to
pay estimated bond-related costs; and
(b) Subject to the budget authorization for bond issuance
established under ORS 286A.035 for the Department of Education
for the biennium.
(2) The State Treasurer may issue Article XI-P bonds for the
purpose of refunding Article XI-P bonds.
(3) The net proceeds of Article XI-P bonds must be deposited in
the School Capital Matching Fund established under section 6 of
this 2011 Act as described in section 4, Article XI-P of the
Oregon Constitution.
(4) If at any time the superintendent determines that the net
proceeds of Article XI-P bonds deposited in the School Capital
Matching Fund pursuant to subsection (3) of this section exceed
the amount necessary for the purposes described in subsection
(1)(a) of this section and the budget authorization, the
superintendent may transfer the excess amount to the Article XI-P
Bond Fund established under section 4 of this 2011 Act or the
Article XI-P Bond Administration Fund established under section 5
of this 2011 Act.
(5) Article XI-P bonds are a general obligation of the State of
Oregon and must contain a direct promise on behalf of the State
of Oregon to pay the principal of, the interest on and the
premium, if any, on the Article XI-P bonds. The State of Oregon
shall pledge its full faith and credit and taxing power to the
payment of the principal of, the interest on and the premium, if
any, on Article XI-P bonds, except that the ad valorem taxing
power of the State of Oregon may not be pledged to pay Article
XI-P bonds. + }
SECTION 3. { + (1) The State Board of Education shall
establish by rule a program to provide school districts with
matching fund grants or loans for the capital costs of school
districts financed with the net proceeds of Article XI-P bonds
issued under sections 1 to 6 of this 2011 Act. The state board
shall establish, by rule, ratios for matching local moneys with
grants, and ratios for matching local moneys with loans.
(2) The Department of Education, subject to rules adopted by
the state board:
(a) May provide matching funds only to a school district that
has received voter approval for local general obligation bonds to
finance capital costs.
(b) May not provide financing through grants or loans to
finance operating costs of school districts. + }
SECTION 4. { + (1) The Article XI-P Bond Fund is established
in the State Treasury, separate and distinct from the General
Fund. Amounts in the Article XI-P Bond Fund may be invested as
provided in ORS 293.701 to 293.820, and interest earned on the
bond fund must be credited to the bond fund. Amounts credited to
the bond fund are continuously appropriated to the Department of
Education for the purpose of paying, when due, the principal of,
the interest on and the premium, if any, on outstanding Article
XI-P bonds. The department shall deposit in the bond fund:
(a) Capitalized or accrued interest on Article XI-P bonds;
Enrolled Senate Bill 18 (SB 18-A) Page 2
(b) Amounts appropriated or otherwise provided by the
Legislative Assembly for deposit in the bond fund;
(c) Reserves established for the payment of Article XI-P bonds;
and
(d) Amounts transferred from the School Capital Matching Fund
established under section 6 of this 2011 Act as described in
section 4, Article XI-P of the Oregon Constitution.
(2) At the request of the department, the State Treasurer may
create separate accounts in the bond fund for reserves and debt
service for each series of Article XI-P bonds as provided in ORS
286A.025 (2)(g). + }
SECTION 5. { + (1) The Article XI-P Bond Administration Fund
is established in the State Treasury, separate and distinct from
the General Fund. Amounts in the Article XI-P Bond Administration
Fund may be invested as provided in ORS 293.701 to 293.820, and
interest earned on the bond administration fund must be credited
to the bond administration fund. Amounts credited to the bond
administration fund are continuously appropriated to the
Department of Education for payment of bond-related costs. The
department shall credit to the bond administration fund:
(a) Proceeds of Article XI-P bonds that were issued to pay
bond-related costs;
(b) Amounts appropriated or otherwise provided by the
Legislative Assembly for deposit in the bond administration fund;
and
(c) Amounts transferred from the School Capital Matching Fund
established under section 6 of this 2011 Act as described in
section 4, Article XI-P of the Oregon Constitution.
(2) At the request of the department, the State Treasurer may
create separate accounts in the bond administration fund as
provided in ORS 286A.025 (2)(g). + }
SECTION 6. { + Pursuant to section 4, Article XI-P of the
Oregon Constitution, the School Capital Matching Fund is
established in the State Treasury, separate and distinct from the
General Fund. Amounts in the School Capital Matching Fund may be
invested as provided in ORS 286A.025 (2)(g), and interest earned
on moneys in the fund must be credited to the fund. The School
Capital Matching Fund consists of net proceeds of Article XI-P
bonds issued under sections 1 to 6 of this 2011 Act, moneys from
the repayment of loans by school districts, moneys transferred to
the fund pursuant to ORS 461.558 and other moneys made available
by the Legislative Assembly for purposes described in section 2
(1) of this 2011 Act and the budget authorization for bond
issuance established under ORS 286A.035 for the Department of
Education. Moneys in the fund are continuously appropriated to
the Department of Education for the purposes described in section
2 (1) of this 2011 Act and the budget authorization. + }
SECTION 7. ORS 348.696 is amended to read:
348.696. Pursuant to section 4 (4)(d), Article XV of the Oregon
Constitution, the Education Stability Fund is established
separate and distinct from the General Fund. { - Except for
earnings on moneys in the school capital matching subaccount, - }
Moneys in the { + Education Stability + } Fund shall be invested
as provided in ORS 293.701 to 293.790. All declared earnings on
moneys in the fund shall be transferred and are appropriated
continuously as follows:
(1) 75 percent to the Oregon Education Fund established by ORS
348.716; and
(2) 25 percent to the Oregon Student Assistance Commission for
the Oregon Opportunity Grant program under ORS 348.260.
Enrolled Senate Bill 18 (SB 18-A) Page 3
SECTION 8. ORS 461.540 is amended to read:
461.540. (1) There is established in the General Fund of the
State Treasury the Administrative Services Economic Development
Fund. All moneys transferred from the State Lottery Fund,
interest earnings credited to this fund and other moneys
authorized to be transferred to this fund from whatever source
are appropriated continuously for any of the following public
purposes:
(a) Creating jobs;
(b) Furthering economic development in Oregon; or
(c) Financing public education.
(2) Moneys shall be transferred from the Administrative
Services Economic Development Fund to:
(a) The Education Stability Fund established under ORS 348.696
as described in section 4, Article XV of the Oregon Constitution;
and
{ - (b) The school capital matching subaccount created within
the Education Stability Fund, as provided by ORS 461.558. - }
{ + (b) The School Capital Matching Fund established under
section 6 of this 2011 Act as described in section 4, Article
XI-P of the Oregon Constitution. + }
(3) As used in this section and section 4, Article XV of the
Oregon Constitution:
(a) 'Creating jobs' includes, but is not limited to:
(A) Supporting the creation of new jobs in Oregon;
(B) Helping prevent the loss of existing jobs in Oregon;
(C) Assisting with work transition to new jobs in Oregon; or
(D) Training or retraining workers.
(b) 'Education' includes, but is not limited to, the Education
Stability Fund established under ORS 348.696 and specific
programs that support the following:
(A) Prekindergartens;
(B) Elementary and secondary schools;
(C) Community colleges;
(D) Higher education;
(E) Continuing education;
(F) Workforce training and education programs; or
(G) Financial assistance to Oregon students.
(c) 'Furthering economic development' includes, but is not
limited to, providing:
(A) Services or financial assistance to for-profit and
nonprofit businesses located or to be located in Oregon;
(B) Services or financial assistance to business or industry
associations to promote, expand or prevent the decline of their
businesses; or
(C) Services or financial assistance for facilities, physical
environments or development projects, as defined in ORS 285B.410,
that benefit Oregon's economy.
SECTION 9. ORS 461.558 is amended to read:
461.558. (1) As used in this section, 'lottery ending balance'
means an amount that equals the difference between:
(a) The amount of moneys available for allocation in the
Administrative Services Economic Development Fund during a
biennium; and
(b) The amount of allocations made from the fund during the
biennium, including any amounts appropriated to the Oregon
Department of Administrative Services under ORS 291.285 to
maintain accountability of the fund.
(2) As soon as practicable after the end of each biennium, the
lottery ending balance shall be transferred to the { - school
Enrolled Senate Bill 18 (SB 18-A) Page 4
capital matching subaccount created within the Education
Stability Fund by section 4 (8), Article XV of the Oregon
Constitution - } { + School Capital Matching Fund established
under section 6 of this 2011 Act as described in section 4,
Article XI-P of the Oregon Constitution + }.
SECTION 10. Section 13, chapter 96, Oregon Laws 2010, is
amended to read:
{ + Sec. 13. + } (1) Notwithstanding ORS 461.558 and except
as provided in subsection (2) of this section, for the biennium
beginning July 1, 2009, the amount of the lottery ending balance
transferred as provided in ORS 461.558 to the { - school
capital matching subaccount created within the Education
Stability Fund by section 4 (8), Article XV of the Oregon
Constitution - } { + School Capital Matching Fund established
under section 6 of this 2011 Act as described in section 4,
Article XI-P of the Oregon Constitution + }, shall be an amount
equal to the greater of:
(a) The difference between the lottery ending balance and the
total amount of the decreases in allocations made by sections 1
to 11 { + , chapter 96, Oregon Laws 2010 + } { - of this 2010
Act - } ; or
(b) Zero.
(2) For purposes of subsection (1) of this section, the
decreases in allocations made by sections 1 to 11 { + , chapter
96, Oregon Laws 2010, + } { - of this 2010 Act - } do not
include the decrease made by section 6 (3) { + , chapter 96,
Oregon Laws 2010 + } { - of this 2010 Act - } .
SECTION 11. Section 5, chapter 104, Oregon Laws 2010, is
amended to read:
{ + Sec. 5. + } (1) Based on the findings in section 1 { + ,
chapter 104, Oregon Laws 2010, + } { - of this 2010 Act, - }
and pursuant to section 4 (6), Article XV of the Oregon
Constitution, on May 1, 2011, the State Treasurer shall transfer
from the Education Stability Fund established under section 4
(4)(d), Article XV of the Oregon Constitution, and ORS 348.696 to
the Supplemental School District and School Program Subaccount
established by section 4 { + , chapter 104, Oregon Laws 2010, + }
{ - of this 2010 Act - } an amount equal to the lesser of:
(a) The difference between $200 million and the total amount of
the appropriations to the Supplemental School District and School
Program Subaccount made under sections 8 and 9, chapter 635,
Oregon Laws 2009, as determined under section 10, chapter 635,
Oregon Laws 2009; or
(b) The balance of the Education Stability Fund at the close of
the last business day preceding the date of the transfer.
(2) Moneys transferred under this section may be used in the
manner provided by section 7 { + , chapter 104, Oregon Laws
2010, + } { - of this 2010 Act - } for moneys in the
Supplemental School District and School Program Subaccount.
(3) As used in this section, 'balance of the Education
Stability Fund' means all moneys in the fund except for moneys in
the Oregon Growth Account { - , - } { + and + } the Oregon
Resource and Technology Development Subaccount { - and the
school capital matching subaccount - } .
SECTION 12. Section 8, chapter 21, Oregon Laws 2010, is amended
to read:
{ + Sec. 8. + } (1) As used in this section, 'qualified
revenue bonds' means revenue bonds, as defined in ORS 287A.001,
that:
{ - (a) Are sold during calendar year 2010; - }
Enrolled Senate Bill 18 (SB 18-A) Page 5
{ - (b) - } { + (a) + } Meet the definition of 'qualified
school construction bonds,' as defined in section 1521 of the
federal American Recovery and Reinvestment Act of 2009 (P.L.
111-5) { + or the description of 'qualified zone academy bonds,'
in section 54E(a) of the Internal Revenue Code of 1986, as
amended + }; and
{ - (c) - } { + (b) + } Are sold with other revenue bonds
under a program that is facilitated by a statewide organization
that represents school boards.
(2) A school district or an education service district may
enter into a funds diversion agreement with the Department of
Education for the purpose of making debt service payments on
qualified revenue bonds.
(3) A funds diversion agreement entered into under this section
must contain all of the following provisions:
(a) Moneys payable to the school district or education service
district by the department from the State School Fund will be
paid directly to a debt service account in amounts equal to the
lesser of:
(A) The amount available to the district for disbursement from
the fund; or
(B) The amount of the debt service owed by the school district
or education service district.
(b) The department must pay the amounts required under the
funds diversion agreement to the debt service account specified
by the school district or education service district.
(c) The department must pay the amounts required under the
funds diversion agreement pursuant to the schedule specified in
the agreement prior to paying any other amounts to the school
district or education service district, except for any funds
claimed pursuant to ORS 238.698 or 328.346.
(d) The agreement may not be revoked by the school district or
education service district.
(e) The agreement will remain in effect until all payments for
the qualified revenue bonds have been made.
(4) If the department is not able to pay moneys to a debt
service account as required by a funds diversion agreement, the
department shall give notice to the school district or education
service district within 30 days after becoming aware that the
moneys will not be paid according to the agreement. The
department is not liable to any holder of qualified revenue
bonds, or any trustee of a holder, or any other party for a
failure to pay moneys as required under the funds diversion
agreement.
(5) Nothing in this section or in a funds diversion agreement
entered into under this section obligates the state or the
department to pay an amount to a school district or education
service district that is more than amounts the school district or
education service district is otherwise entitled to receive from
the State School Fund or to pay debt service on qualified revenue
bonds issued by the school district or education service
district.
SECTION 13. { + Section 9, chapter 21, Oregon Laws 2010, is
repealed. + }
SECTION 14. { + This 2011 Act being necessary for the
immediate preservation of the public peace, health and safety, an
emergency is declared to exist, and this 2011 Act takes effect on
its passage. + }
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Enrolled Senate Bill 18 (SB 18-A) Page 6
Passed by Senate June 17, 2011
.............................................................
Robert Taylor, Secretary of Senate
.............................................................
Peter Courtney, President of Senate
Passed by House June 22, 2011
.............................................................
Bruce Hanna, Speaker of House
.............................................................
Arnie Roblan, Speaker of House
Enrolled Senate Bill 18 (SB 18-A) Page 7
Received by Governor:
......M.,............., 2011
Approved:
......M.,............., 2011
.............................................................
John Kitzhaber, Governor
Filed in Office of Secretary of State:
......M.,............., 2011
.............................................................
Kate Brown, Secretary of State
Enrolled Senate Bill 18 (SB 18-A) Page 8
