Chapter 289 —
2007 EDITION
PUBLIC BORROWING
GENERAL PROVISIONS
289.005 Definitions
289.010 Findings;
purpose
289.100 Oregon
Facilities Authority; members; qualifications; term
289.105 Official
action to undertake project
289.110 Duties
and powers with respect to projects
289.115 Functions
289.120 Limitation
on manner of operating project and expenditure of funds
289.125 Rules;
fees
289.130
BONDS
289.200 Issuance
of revenue bonds; role of State Treasurer; role of Oregon Facilities Authority;
fees
289.205 Expenses
of State Treasurer
289.210 Refunding
bonds
289.215 Validity
of bonds not affected by other matters regarding facility
289.220 Covenants
regarding bond issuance
289.225 Sources
of bond repayment restricted; recitations in bonds
289.230 Actions
by bondholders to enforce rights
289.235 Loan
of bond proceeds for projects; state not required to have ownership or leasehold
interest
289.240 Report
of bonding activities; rules
GENERAL PROVISIONS
289.005
Definitions. As used in this
chapter, unless the context requires otherwise:
(1) “Authority” means the Oregon
Facilities Authority created by this chapter.
(2) “Bonds” or “revenue bonds” means
revenue bonds, as defined in ORS 286A.001.
(3) “Cost” means the cost of:
(a) Construction, acquisition, alteration,
enlargement, reconstruction and remodeling of a project, including all lands,
structures, real or personal property, rights, rights of way, air rights,
franchises, easements and interests acquired or used for or in connection with
a project;
(b) Demolishing or removing any buildings
or structures on land as acquired, including the cost of acquiring any lands to
which such buildings or structures may be moved;
(c) All machinery and equipment;
(d) Financing charges, interest prior to,
during and for a period after completion of construction and acquisition,
reasonably required amounts to make the project operational, provisions for
reserves for principal and interest and for extensions, enlargements,
additions, replacements, renovations and improvements;
(e) Architectural, actuarial engineering,
financial and legal services, plans specifications, studies, surveys, estimates
of costs and of revenues, administrative expenses, expenses necessary or
incident to determining the feasibility or practicability of constructing the
project; and
(f) Such other expenses as may be
necessary or incident to a project, the financing of such project and the
placing of the project in operation.
(4) “Cultural institution” means a public
or nonprofit institution within this state which engages in the cultural,
intellectual, scientific, environmental, educational or artistic enrichment of
the people of this state. “Cultural institution” includes, without limitation,
aquaria, botanical societies, historical societies, land conservation
organizations, libraries, museums, performing arts associations or societies,
scientific societies, wildlife conservation organizations and zoological
societies. “Cultural institution” does not mean any school or any institution
primarily engaged in religious or sectarian activities.
(5) “Health care institution” means a
public or nonprofit organization within this state that provides health care
and related services, including but not limited to the provision of inpatient
and outpatient care, diagnostic or therapeutic services, laboratory services,
medicinal drugs, nursing care, assisted living, elderly care and housing,
including retirement communities, and equipment used or useful for the
provision of health care and related services.
(6) “Housing institution” means a public
or nonprofit organization within this state that provides decent, affordable housing
to low income persons.
(7) “Institution” means a cultural
institution, a health care institution, a housing institution, an institution
for higher education, an institution for prekindergarten through grade 12
education, a school for persons with disabilities or another nonprofit.
(8) “Institution for higher education”
means a public or nonprofit educational institution within this state
authorized by law to provide a program of education beyond the high school
level, including community colleges and associate degree granting institutions.
“Institution for higher education” does not mean any school or any institution
primarily engaged in religious or sectarian activities.
(9) “Institution for prekindergarten
through grade 12 education” means an Oregon prekindergarten as defined in ORS
329.170, a public educational institution within this state authorized by law
to provide a program of education for kindergarten through grade 12 or a
nonprofit educational institution within this state registered as a private
school under ORS 345.545 that provides a program of education for
prekindergarten through grade 12. “Institution for prekindergarten through
grade 12 education” does not mean a school or institution primarily engaged in
religious or sectarian activities.
(10) “Nonprofit” means an institution,
organization or entity within this state exempt from taxation under section
501(c)(3) of the Internal Revenue Code as defined in ORS 314.011.
(11)(a) “Project” means the financing or
refinancing, including without limitation, acquisition, construction,
enlargement, remodeling, renovation, improvement, furnishing or equipping, of
the following:
(A) In the case of a participating
institution that is an institution for higher education, an institution for
prekindergarten through grade 12 education or a school for persons with
disabilities, a structure or structures suitable for use as a dormitory or
other multiunit housing facility for students, faculty, officers or employees,
or a dining hall, student union, administration building, academic building,
library, laboratory, research facility, classroom, athletic facility, health
care facility, maintenance, storage or utility facility and other structures or
facilities related to any of the structures required or used for the
instruction of students, the conducting of research or the operation of an
institution for higher education, an institution for prekindergarten through
grade 12 education or a school for persons with disabilities. It shall also
include landscaping, site preparation, furniture, equipment and machinery and
other similar items necessary or convenient for the operation of a particular
facility or structure in the manner for which its use is intended and shall
further include any furnishings, equipment, machinery and other similar items
necessary or convenient for the operation of an institution of higher
education, an institution for prekindergarten through grade 12 education or a
school for persons with disabilities, whether or not such items are related to
a particular facility or structure financed under this chapter.
(B) In the case of a participating
institution that is a housing institution, a structure or structures suitable
for use as housing, including residences or multiunit housing facilities,
administration buildings, maintenance, storage or utility facilities and other
structures or facilities related to any of the structures required or used for
the operation of the housing, including parking and other facilities or
structures essential or convenient for the orderly provision of such housing.
It shall also include landscaping, site preparation, furniture, equipment and
machinery and other similar items necessary or convenient for the particular
housing facility or structure in the manner for which its use is intended and
shall further include any furnishings, equipment, machinery and other similar
items necessary or convenient for the provision of housing, whether or not such
items are related to a particular facility or structure financed under this
chapter.
(C) In the case of a participating
institution that is a cultural institution, a structure or structures suitable
for its purposes, whether or not to be used to provide educational services, or
research resources, including use as or in connection with an administrative
facility, aquarium, assembly hall, auditorium, botanical garden, exhibition
hall, gallery, greenhouse, library, museum, scientific laboratory, theater or
zoological facility. It shall also include supporting facilities, landscaping,
site preparation, furniture, equipment, machinery and other similar items
necessary or convenient for the operation of a cultural institution, whether or
not such items are related to a particular facility or structure financed under
this chapter, including books, works of art or other items for display or
exhibition.
(D) In the case of a participating
institution that is a health care institution, a structure or structures
suitable for its purposes, including hospital facilities, inpatient and
outpatient clinics, doctors’ offices, administration buildings, parking,
maintenance, storage or utility facilities, nursing care or assisted living
facilities, elderly care and housing facilities, including retirement
communities, and other structures or facilities related to any of the
structures required or used for the operation of the health care institution,
including other facilities or structures essential or convenient for the
orderly provision of such health care. It shall also include landscaping, site
preparation, furniture, equipment and machinery and other similar items
necessary or convenient for the particular health care facility or structure in
the manner for which its use is intended and shall further include any working
capital, furnishings, equipment, machinery and other similar items necessary or
convenient for the provision of health care, whether or not such items are
related to a particular facility or structure financed under this chapter,
including borrowings needed to alleviate interim cash flow deficits of a health
care institution.
(E) In the case of a participating
institution that is a nonprofit not otherwise specified in this subsection, a
structure or structures suitable for its purposes, including facilities or
structures essential or convenient for the orderly operations of the nonprofit.
It shall also include acquisition of interests in land, landscaping, site
preparation, furniture, equipment and machinery and other similar items
necessary or convenient for the nonprofit, whether or not the items are related
to a particular facility or structure financed under this chapter, including
borrowings needed to alleviate interim cash flow deficits of the nonprofit.
(b) “Project” also includes any
combination of one or more of the projects undertaken jointly by one or more
participating institutions with each other or with other parties.
(c) “Project” does not include any
facility used or to be used for sectarian instruction or as a place of
religious worship or any facility which is used or to be used primarily in
connection with any part of the program of a school or department of divinity
for any religious denomination.
(12) “School for persons with disabilities”
means a public or nonprofit primary, secondary or post-secondary school within
this state that serves students at least 70 percent of whom are persons with
disabilities as determined by one or more appropriate education,
rehabilitation, medical or mental health authorities; is accredited by a
recognized accrediting body; and is determined by the authority to be a major
resource of benefit to persons with disabilities. “School for persons with
disabilities” does not mean any school or any institution primarily engaged in
religious or sectarian activities. [1989 c.820 §2; 1991 c.408 §1; 2001 c.270 §1;
2007 c.70 §74; 2007 c.783 §113; 2007 c.785 §1]
289.010
Findings; purpose. (1) The
Legislative Assembly finds that by use of the powers and procedures described
in this chapter for the assembling and financing of lands for housing,
educational, cultural or other nonprofit uses and for the construction and
financing of facilities for those uses, financed through the issuance of
revenue bonds secured solely by the properties and rentals thus made available,
the state may be able to increase the availability of decent, affordable
housing, the achievement of higher levels of learning and development of the
intellectual capacities of citizens, the expansion of the authorized services
and resources for the intellectual and artistic enrichment of citizens, the
advancement of nonprofit activities and services and the general well-being of
citizens.
(2) It is the purpose of this chapter to
authorize the exercise of powers granted by this chapter by this state in
addition to and not in lieu of any other powers it may possess. [1989 c.820 §1;
2007 c.71 §89; 2007 c.785 §2]
289.100
(2) The authority consists of seven
members who must be residents of this state, not more than four of whom are
members of the same political party. The State Treasurer shall appoint the
members, and members serve at the pleasure of the State Treasurer. At least one
of the members must be an individual knowledgeable in the field of state and
municipal finance. At least one of the members must be an individual
knowledgeable in the building construction field.
(3) Upon the expiration of the term of a
member, the State Treasurer shall appoint a successor for a term of four years.
(4) The State Treasurer shall appoint an
individual to fill a vacancy for the remainder of the unexpired term. [1989
c.820 §3; 1991 c.408 §2; 2001 c.261 §1; 2007 c.785 §3]
Note: Section 6, chapter 785, Oregon Laws 2007,
provides:
Sec.
6. Notwithstanding the term
of office of members of the Oregon Facilities Authority specified in ORS
289.100, for the purpose of maintaining or improving the staggering of terms of
individual members, the State Treasurer may establish shorter terms for the
first members appointed to increase the membership of the authority from five
members to seven members pursuant to the amendments to ORS 289.100 by section 3
of this 2007 Act. [2007 c.785 §6]
289.105
Official action to undertake project. The undertaking of any eligible project must be requested by official
action of the participating institution taken at a regular or duly called
special meeting thereof by the affirmative vote of a majority of the members of
the institution’s board of directors. [1989 c.820 §5]
289.110
Duties and powers with respect to projects. (1) In addition to any other powers granted by law, the state, acting
through the State Treasurer or a designee of the State Treasurer, may:
(a) Enter into agreements to finance the
costs of an eligible project by lending the proceeds of bonds authorized by
this chapter to a participating institution under terms and with security
approved by the state.
(b) Lease and sublease eligible projects
to a participating institution subject to subsection (2) of this section.
(c) Pledge or assign all or part of the
revenues of one or more eligible projects owned or to be acquired by the state
to the holders of bonds issued under this chapter or to a trustee for the
holders, and segregate the revenues or provide for payment of the revenues to
the trustee.
(d) Mortgage or otherwise encumber
eligible projects in favor of the holders of bonds issued under this chapter or
a trustee for the holders without obligating the state except with respect to
the project.
(e) Make contracts, execute instruments
and do what is necessary or desirable to exercise the powers granted by this
chapter, to perform the covenants or duties of this state or to secure the
payment of bonds issued under this chapter. Contracts that may be made by the
state include contracts entered into prior to construction, acquisition or
installation of an eligible project that authorize, subject to terms and
conditions the state finds necessary or desirable, a lessee to provide for construction,
acquisition or installation of buildings, improvements or equipment to be
included in the project.
(f) Enter into and perform contracts and
agreements with participating institutions for the planning, construction,
installation, acquisition, leasing or financing of facilities of an eligible
project, including a contract or agreement that establishes a body for the
supervision and general management of the facilities.
(g) Accept loans or grants for the
planning, construction, installation, acquisition, leasing or other provision
of an eligible project from an authorized agency of the federal government, and
enter into agreements with the agency respecting the loans or grants.
(2) A lease or sublease entered into under
subsection (1)(b) of this section must provide that:
(a) Rents charged for the use of the
project are established and revised as necessary to produce sufficient revenue
to allow for payment of the principal of and interest on bonds issued under
this chapter when due; and
(b) The lessee or sublessee is required to
pay:
(A) The expenses of the operation and
maintenance of the project including, but not limited to, adequate insurance on
the project and insurance against liability for injury to persons or property
arising from the operation of the project; and
(B) The taxes and special assessments
levied upon the leased or subleased premises and payable during the term of the
lease or sublease.
(3) During the term of a lease or sublease
entered into under subsection (1)(b) of this section, ad valorem taxes must be
imposed on the real and personal property of the eligible project in the same
manner as the taxes would be imposed if the lessee or sublessee were the owner
of the eligible project. [1989 c.820 §6; 2005 c.22 §212; 2007 c.785 §4]
289.115
Functions. In carrying out
its duties under this chapter, the Oregon Facilities Authority, acting for and
in behalf of the state as its duly authorized agency, may:
(1) Acquire, construct and hold in whole
or in part any lands, buildings, easements, water and air rights, improvements
to lands and buildings and capital equipment to be located permanently or used
exclusively on such lands or in such buildings, which are considered necessary
in connection with an eligible project to be situated within this state, and
construct, reconstruct, improve, better and extend such projects, and enter
into contracts therefor; and
(2) Sell and convey all properties
acquired in connection with eligible projects, including without limitation the
sale and conveyance thereof subject to any mortgage and the sale and conveyance
thereof under an option granted to the lessee of the eligible project, for such
price, and at such time as the state may determine. However, no sale or
conveyance of such properties shall ever be made in such manner as to impair
the rights of interests of the holder, or holders, or any bonds issued under
the authority of this chapter. [1989 c.820 §7; 1991 c.408 §3]
289.120
Limitation on manner of operating project and expenditure of funds. Except as provided in ORS 289.115 (2), the
state shall not have power to operate any eligible project as a business or in
any manner whatsoever. Nothing in this chapter authorizes the state to expend
any funds on any eligible project, other than the revenues of such projects, or
the proceeds of revenue bonds issued under this chapter, or other funds granted
to the state for the purposes of an eligible project. [1989 c.820 §8]
289.125
Rules; fees. (1) The Oregon
Facilities Authority shall adopt by rule standards by which to determine the
eligibility of projects for bond financing pursuant to this chapter. In
determining the standards, the authority shall consider all relevant data. The
standards of the authority must provide that projects are approved in accordance
with criteria reflecting the benefits to the state. Criteria include, but need
not be limited to:
(a) Supporting projects that increase the
number of decent, affordable housing units in this state;
(b) Expanding the educational resources in
this state; or
(c) Expanding the cultural resources in
this state.
(2) Upon determining a project as
eligible, the authority shall forward the application to the State Treasurer,
who shall determine whether to issue the revenue bonds.
(3) The authority may treat as a single
eligible project for bonding purposes any number of projects determined to be
eligible projects.
(4) The authority shall collect the fees
set forth in subsection (5) of this section from an applicant that seeks to
have a project declared eligible for financing. The fee identified in
subsection (5)(a) of this section may be collected even though the project has
not been determined to be eligible for financing.
(5) The fees described in subsection (4)
of this section are:
(a) An application fee determined by the
Oregon Facilities Authority by rule.
(b) A closing fee not to exceed one-half
of one percent of the total bond issue for the project, as determined by the
authority.
(6) The authority shall deposit fees
received under subsection (5) of this section in the Oregon Facilities
Authority Account established under ORS 289.130. [1989 c.820 §4; 1991 c.408 §4;
2007 c.785 §5]
289.130
BONDS
289.200
Issuance of revenue bonds; role of State Treasurer; role of
(a) The State Treasurer may authorize and
issue in the name of the State of Oregon revenue bonds secured by revenues from
eligible projects to finance or refinance in whole or part the cost of
acquisition, purchase, construction, reconstruction, installations improvement,
betterment or extension of projects. The bonds shall be identified by project
and issued in the manner prescribed by ORS chapter 286A.
(b) The State Treasurer shall designate
the trustee, financial advisor and bond counsel, if any, and enter into
appropriate agreements with each to carry out the provisions of this chapter.
An agreement with bond counsel designated by the State Treasurer under this
section is subject to the provisions related to services provided by bond
counsel under ORS 286A.130. The powers conferred on a related agency under ORS
chapter 286A do not apply to the Oregon Facilities Authority with respect to
the designation of trustee, financial advisor and bond counsel.
(2) Any trustee designated by the State
Treasurer to carry out all or part of the powers specified in ORS 289.110 must
agree to furnish financial statements and audit reports for each bond issue.
(3) The State Treasurer shall be the
applicable elected representative for purposes of approving the issuance of
revenue bonds under this chapter as to the extent such approval is required
under section 147(f) of the Internal Revenue Code.
(4) The State Treasurer shall collect data
from the authority regarding the amount and nature of bonded indebtedness in
289.205
Expenses of State Treasurer.
Reasonable administrative expenses of the State Treasurer shall be charged
against bond proceeds or project revenues. [1989 c.820 §10; 2007 c.783 §115]
289.210
Refunding bonds. The State
Treasurer shall have the power, whenever the treasurer considers refunding
expedient, to refund any bonds by the issuance of new bonds, whether the bonds
to be refunded have or have not matured. The refunding bonds may be exchanged
for bonds to be refunded and the proceeds applied to the purchase, redemption
or payment of such bonds. [1989 c.820 §11]
289.215
Validity of bonds not affected by other matters regarding facility. The validity of bonds issued under this
chapter shall not be dependent on nor be affected by the validity or regularity
of any proceeding relating to the acquisition, purchase, construction,
reconstruction, installation, improvement, betterment or extension of the
project for which the bonds are issued. The official action authorizing such
bonds may provide that the bonds shall contain a recital that they are issued
pursuant to this chapter and such recital shall be conclusive evidence of their
validity and of the regularity of their issuance. [1989 c.820 §12]
289.220
Covenants regarding bond issuance. The official action authorizing the issuance of bonds under this
chapter to finance or refinance in whole or in part, the acquisition, purchase,
construction, reconstruction, installation, improvement, betterment or
extension of any project may contain covenants, notwithstanding that such
covenants may limit the exercises of powers conferred by this chapter in the
following respects and in such other respects as the state, acting through the
State Treasurer, or the designee of the treasurer may decide:
(1) The rents to be charged for the use of
properties acquired, purchased, constructed, reconstructed, installed,
improved, bettered or extended under the authority of this chapter;
(2) The use and disposition of the
revenues of such projects;
(3) The creation and maintenance of
sinking funds and the regulation, use and disposition thereof;
(4) The creation and maintenance of funds
to provide for maintaining the eligible project and replacement of properties
depreciated, damaged, destroyed or condemned;
(5) The purpose or purposes to which the
proceeds of sale of bonds may be applied and the use and disposition of such
proceeds;
(6) The nature of mortgages or other
encumbrances on the eligible project made in favor of the holder or holders of
such bonds or a trustee therefor;
(7) The events of default and the rights
and liabilities arising thereon and the terms and conditions upon which the
holders of any bonds may bring any suit or action on such bonds or on any
coupons appurtenant thereto;
(8) The issuance of other or additional
bonds or instruments payable from or constituting a charge against the revenue
of the eligible project;
(9) The insurance to be carried upon the
eligible project and the use and disposition of insurance moneys;
(10) The keeping of books of account and
the inspection and audit thereof;
(11) The terms and conditions upon which
any or all of the bonds shall become or may be declared due before maturity and
the terms and conditions upon which such declaration and its consequences may
be waived;
(12) The rights, liabilities, powers and
duties arising upon the breach by the municipality or redevelopment agency of
any covenants, conditions or obligations;
(13) The appointing of and vesting in a
trustee or trustees of the right to enforce any covenants made to secure or to
pay the bonds, the powers and duties of such trustee or trustees and the
limitation of their liabilities;
(14) The terms and conditions upon which
the holder or holders of the bonds, or the holders of any proportion or
percentage of them, may enforce any covenants made under this chapter;
(15) A procedure by which the terms of any
official action authorizing bonds or of any other contract with bondholders,
including but not limited to an indenture of trust or similar instrument, may
be amended or abrogated, and the amount of bonds the holders of which may
consent thereto, and the manner in which such consent may be given; and
(16) The subordination of the security of
any bonds issued under this chapter and the payment of principal and interest
thereof, to the extent considered feasible and desirable by the state, to other
bonds or obligations of the state issued to finance the eligible project or
that may be outstanding when the bonds thus subordinated are issued and
delivered. [1989 c.820 §13]
289.225
Sources of bond repayment restricted; recitations in bonds. (1) Revenue bonds issued under this chapter
shall not:
(a) Be payable from nor charged upon any
funds other than the revenue pledged to the payment thereof, nor shall the
state be subject to any liability thereon. No holder or holders of such bonds
shall ever have the right to compel any exercise of the taxing power of the
state to pay any such bonds or the interest thereon, nor to enforce payment
thereof against any property of the state except those projects or portions
thereof, mortgaged or otherwise encumbered under the provisions and for the
purposes of this chapter.
(b) Constitute a charge, lien or
encumbrance, legal or equitable, upon any property of the state, except those
eligible projects, or portions thereof, mortgaged or otherwise encumbered,
under the provisions and for the purposes of this chapter.
(2) Each bond issued under this chapter
shall recite in substance that the bond, including interest thereon, is payable
solely from the revenue pledged to the payment thereof. No such bond shall
constitute a debt of the state or a lending of the credit of the state within
the meaning of any constitutional or statutory limitation. However, nothing in
this chapter is intended to impair the rights of holders of bonds to enforce
covenants made for the security thereof as provided in ORS 289.230. [1989 c.820
§14]
289.230
Actions by bondholders to enforce rights. Subject to any contractual limitation binding upon the holders of any
issue of revenue bonds, or a trustee therefor, including but not limited to the
restriction of the exercise of any remedy to a specified proportion or
percentage of such holders, any holder of bonds, or any trustee therefor, for
the equal benefit and protection of all bondholders similarly situated, may:
(1) By action or proceeding for legal or
equitable remedies, enforce their rights against the state and any of its
officers, agents and employees, and may require and compel the state or any
such officers, agents or employees to perform and carry out its and their
duties and obligations under this chapter and its and their covenants and
agreements with bondholders;
(2) By action require the state to account
as if it was the trustee of an express trust;
(3) By action enjoin any acts or things
which may be unlawful or in violation of the right of the bondholders;
(4) Bring action upon the bonds;
(5) Foreclose any mortgage or lien given
under the authority of this chapter and cause the property standing as security
to be sold under any proceedings permitted by law or equity; and
(6) Exercise any right or remedy conferred
by this chapter without exhausting and without regard to any other right or
remedy conferred by this chapter or any other law of this state, none of which
rights and remedies is intended to be exclusive of any other, and each is
cumulative and in addition to every other right and remedy. [1989 c.820 §15]
289.235
Loan of bond proceeds for projects; state not required to have ownership or
leasehold interest. The
state, acting through the State Treasurer and the Oregon Facilities Authority,
or either of them, may lend the proceeds of the bonds authorized by this
chapter for eligible projects without the necessity of the state having any
ownership or leasehold interest in the eligible projects. Loans made pursuant
to this section shall be secured to the extent considered necessary or
desirable by the State Treasurer and the authority to assure repayment of the
bonds. [1989 c.820 §16; 1991 c.408 §7]
289.240
Report of bonding activities; rules. (1) Within 90 days following the closing of each fiscal year, the
Oregon Facilities Authority shall report on its operations to the Governor,
State Treasurer and the Legislative Assembly. The report shall include a
summary of the authority’s activities relating to bonds issued under this
section.
(2) In accordance with any applicable
provision of ORS chapter 183, the authority may adopt such rules as it
considers necessary to carry out its duties, functions and powers under this
chapter. [1989 c.820 §18]
_______________
CHAPTER 290
[Reserved for expansion]