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288.010 Definitions for ORS 288.010 to 288.110. As used in ORS 288.010 to 288.110, unless the context otherwise requires:

(1) "Fiscal agency" means the bank or trust company designated pursuant to ORS 288.020.

(2) "Subdivision" means a municipal corporation, quasi-municipal corporation or civil subdivision in this state. [Amended by 1987 c.869 §7]

288.020 Designating banking institution as fiscal agency; qualifications; duration. (1) The State Treasurer may designate, as fiscal agency for payment of the bonds issued by this state or by any subdivision, a reputable and responsible bank or trust company. The appointment when so made shall continue for a period of two years unless sooner revoked by the State Treasurer for valid and sufficient reasons. The appointment may be renewed for a period of two years.

(2) Until its successor has been appointed, the bank or trust company named shall act as the fiscal agency of the State of Oregon, in accordance with such terms as shall be agreed upon between the State Treasurer and the agency. The fiscal agency shall act as custodian of such securities owned by the State of Oregon as the State Treasurer shall specify.

(3) If no such bank or trust company is willing to accept appointment as fiscal agency, or if the State Treasurer considers unsatisfactory the terms under which such a bank or trust company is willing so to act, the bonds and bond interest shall thereupon become payable at the State Treasury or at the office of the treasurer or fiscal officer of the subdivision concerned, as the case may be. [Amended by 1981 c.660 §13; 1987 c.869 §8; 1991 c.352 §4]

288.030 Notice of appointment of agent; bonds and coupons payable at agency. The State Treasurer, immediately after the establishment of the fiscal agency, shall publish a notice thereof in some financial paper of general circulation in the city in which the fiscal agency is to act on behalf of the state. Thereafter all bonds and coupons of the state or one of its subdivisions which are by their terms payable in a specified city, shall be paid at the fiscal agency appointed in that city. [Amended by 1987 c.869 §9]

288.040 Remitting funds by state and local treasurers to pay bonds and coupons. Unless otherwise provided by law, the State Treasurer and the treasurer or other fiscal officer of every affected subdivision shall remit to the fiscal agency, before the maturity of any bonds or coupons payable at the fiscal agency, sufficient moneys out of any funds in the hands of any such treasurer or other fiscal officer applicable to such purpose, for the redemption of such bonds or coupons. [Amended by 1967 c.220 §1; 1991 c.352 §5]

288.050 Notice of receipt of funds. Upon the receipt of any funds by the fiscal agency, the agency shall notify the officers from whom the funds were received that the funds have been received.

288.060 Return of canceled bonds and coupons. (1) After payment of the bonds or coupons issued by a subdivision for which the funds were remitted by the treasurer or other fiscal officer of the subdivision, the bonds or coupons shall be canceled and returned to the officer from whom the funds were received, not less often than quarterly by January 15, April 15, July 15 and October 15 of each year. At the option of the treasurer or other fiscal officer, the bonds and coupons may be held for destruction as are state bonds and coupons under ORS 288.120 and may be destroyed in the same manner as state bonds and coupons are destroyed under ORS 288.120.

(2) After payment of the bonds or coupons issued by this state for which funds were remitted by the State Treasurer, the bonds or coupons shall be canceled and held for destruction under ORS 288.120. [Amended by 1975 c.462 §3; 1981 c.252 §1]

288.070 Release of treasurers from liability for funds remitted. Neither the State Treasurer nor the treasurer or other fiscal officer of any subdivision shall be held responsible for funds remitted to the fiscal agency. The acknowledgment of the receipt of such funds, for which canceled bonds and coupons have not been returned, shall be a voucher to such treasurer in any settlement.

288.080 [Repealed by 1995 c.259 §6]

288.090 Postage and express costs. Postage and express costs shall be proper charges against the state or subdivision therein for which they are incurred and shall be paid to the fiscal agency and in turn be allowed the treasurer or other fiscal officer in settlement.

288.100 Certain bond issues not affected. Nothing in ORS 288.010 to 288.110 shall be construed to affect any bond issues existing on May 20, 1911, or on February 17, 1943, that by their provisions are made payable at a fiscal agency in the City of New York designated before February 17, 1943. However, if desired by the holder, such bond issues and the interest thereon may be paid at the regular fiscal agency appointed in accordance with ORS 288.020.

288.110 Civil liability of treasurers failing to comply with law. If the State Treasurer or the treasurer or other fiscal officer of any subdivision neglects or refuses to perform the duties imposed by ORS 288.010 to 288.110, the State Treasurer or treasurer or other fiscal officer shall be liable to the holder of any bonds or coupons aggrieved by such neglect, in a sum, recoverable in an action at law against such treasurer and the bondsmen of such treasurer, for twice the amount of the face value of any such bonds or coupons as are dishonored on account of the neglect or refusal of such officer to comply with the provisions of ORS 288.010 to 288.110.

288.120 Destruction of bonds and coupons upon payment; when destroyed; certification; responsibility of fiscal agency. (1) When the principal and interest upon bonds issued by this state must be paid only at the office of the State Treasurer, the bonds and interest coupons surrendered to the State Treasurer upon payment shall be retained by the State Treasurer for two years or until audited by the Secretary of State. Thereafter, the State Treasurer, shall destroy them. The State Treasurer shall prepare a list of the bonds and coupons destroyed and shall maintain a certificate signed by the State Treasurer that the bonds and coupons described therein were destroyed by the State Treasurer on the date of the certificate.

(2) When the principal and interest upon bonds issued by this state must be paid at the office of the fiscal agency or may be paid at either the office of the fiscal agency or the State Treasurer, bonds and interest coupons surrendered upon payment shall be destroyed by the fiscal agency. Bonds and interest coupons that must be destroyed by the fiscal agency under this subsection that are surrendered to the State Treasurer upon payment shall be sent in due course by the State Treasurer to the fiscal agency for destruction.

(3) The fiscal agency shall destroy paid bonds and interest coupons under subsection (2) of this section not earlier than one year after the date upon which those bonds and coupons are surrendered on payment. For each occasion on which bonds or coupons are destroyed, the fiscal agency shall prepare a destruction certificate for bonds and a separate destruction certificate for coupons. A destruction certificate shall contain a list of the bonds or coupons destroyed, the date of destruction and the signature of an authorized agent of the fiscal agency, and shall be filed with the State Treasurer.

(4) The fiscal agency is responsible for proper payment and disposition of all bonds and coupons, and for any duplicate payments, payments to unauthorized persons and nonpayment to authorized persons occurring as a result of destruction of bonds or coupons under this section. [1975 c.462 §2]

FORMS OF GOVERNMENTAL UNIT BORROWING

288.150 Definitions for ORS 288.150 to 288.165. As used in ORS 288.150 to 288.165:

(1) "Actual cost" has the meaning given the term under ORS 310.140.

(2) "Capital construction" has the meaning given the term under ORS 310.140.

(3) "Costs" when used with capital construction or improvements has the same meaning as "actual costs" as defined under ORS 310.140.

(4) "Credit agreement" means a note, letter of credit, line of credit or similar agreement in which a financial institution agrees to loan funds to the governmental unit, and the governmental unit pledges its full faith and credit and agrees to repay the amounts loaned over time, with or without interest.

(5) "General obligation bond" means a bond including a credit agreement, which is a full faith and credit obligation, and which is payable from taxes which may be levied without limitation by section 11, Article XI of the Oregon Constitution, and without limitation by section 11b, Article XI of the Oregon Constitution.

(6) "Governmental unit" means a unit of local government within the State of Oregon, including, but not limited to, cities, counties, school districts, special districts, public corporations and intergovernmental corporations organized under the authority of ORS 190.010.

(7) "Improvement" has the meaning given "capital improvements" under ORS 310.140.

(8) "Limited tax bond" means a bond or other obligation which is a full faith and credit obligation, and which is payable from any taxes which the issuer may levy within the limitations of section 11b, Article XI of the Oregon Constitution and either within or without the limitations of section 11, Article XI of the Oregon Constitution.

(9) "Structure" has the meaning given the term under ORS 310.140. [1991 c.902 §98; 1997 c.541 §366]

288.155 When governmental unit may issue otherwise authorized general obligation bonds and limited tax bonds; priority of security interest. (1) If authorized by law other than ORS 288.150 to 288.165 and in the manner provided by law, a governmental unit may issue general obligation bonds when:

(a) The question of issuing the specific bonds has been approved by the electors of the issuing governmental unit or the bonds replace outstanding general obligation bonds pursuant to ORS 288.160; and

(b) The general obligation bonded indebtedness will be incurred for capital construction or improvements.

(2) In addition to the authority to issue limited tax bonds provided by other provisions of law, a governmental unit also is authorized to issue limited tax bonds in the following circumstances:

(a) When a governmental unit is authorized by a statute or charter to issue general obligation bonds without submitting the question of the issuance thereof to its electors, such governmental unit may exercise such statutory or charter authority to issue limited tax bonds for the same purposes and subject to the same terms and conditions of such statutory or charter authority.

(b) When the electors of a governmental unit have authorized the issuance of general obligation bonds for a particular purpose, the governing body, in its discretion and to carry out such purpose, may issue all or a portion of such bonds as limited tax bonds.

(3) Notwithstanding this section or any other provision of law requiring bonds to be authorized by ordinance, the limited tax bonds authorized by this section shall be issued pursuant to a resolution or ordinance of the governing body of the issuing governmental unit.

(4) For the purpose of paying all principal of and interest on any limited tax bonds authorized by this section or by any other provision of law, the issuing governmental unit may, subject only to the limitations of section 11b (1), Article XI of the Oregon Constitution, calculate, assess, levy and collect each fiscal year a tax on all taxable property within its boundaries. The amount of such tax shall be sufficient to pay all principal of and interest on such limited tax bonds which are due and payable in that year and to replenish any debt service reserves required for such limited tax bonds. In computing the amount of such tax, the governmental unit shall deduct from the total amount otherwise required the amount of any other funds which are reasonably expected to be available to pay the principal and interest coming due on such limited tax bonds during the fiscal year in question.

(5) A governmental unit that has outstanding general obligation or limited general obligation bonds, on an annual basis and subject to any applicable covenants or agreements which limit payment of certain obligations to particular sources of funds, shall budget and appropriate amounts sufficient to pay in each succeeding annual period debt service on such bonds. However, this subsection does not require the governmental unit to adopt a supplemental budget to pay the principal and interest coming due on such bonds, or on limited tax bonds, in the fiscal year in which such bonds are authorized and issued, but the governmental unit may pay such principal and interest from any lawfully available source of funds without adopting a supplemental budget therefor.

(6) When issuing limited tax bonds, a governmental unit may:

(a) Establish the maturity schedule, interest rates, including variable or adjustable rates of interest, redemption provisions and other terms of the limited tax bonds. Notwithstanding this subsection, the governing body, in the ordinance or resolution authorizing the issuance of such bonds or notes, may delegate to any elected or appointed official or employee of the governmental unit the authority to determine the maturity dates, principal amounts, redemption provisions, interest rates or the method of determining a variable or adjustable interest rate, denominations and other terms and conditions of such bonds which are not appropriately determined at the time of enactment of the authorizing ordinance or resolution, which delegated authority shall be exercised subject to the applicable requirements of law and such limitations and criteria as may be set forth in such ordinance or resolution;

(b) Pledge as additional security for the limited tax bonds all or any portion of its revenues of whatever kind or nature and from whatever source derived which, under applicable law, are not specifically restricted to uses other than the payment of the amounts owing on such bonds, including but not limited to excise taxes, property taxes and other taxes of whatever kind or nature, revenues derived from any public utilities or other revenue producing enterprises operated by the governmental unit or agencies or instrumentalities thereof, user charges, business and license fees, fines and penalties, and make and enter into covenants with the owners of such bonds to pay all or any portion of the amounts owing thereon out of all or any portion of such revenues;

(c) Grant mortgages, trust deeds or security interests in property which is financed with the limited tax bonds and related property, in order to enhance the security of limited tax bonds or the obligations of the governmental unit under or with respect to any related credit enhancement device. For purposes of this subsection, "related property" shall include any tangible personal or real property comprising a part of a system such as a water, sewer or other public utility system of which the financed property is a part, and shall also include any tangible personal or real property which is functionally related to or used in connection with the property financed;

(d) Obtain a credit enhancement device providing additional security for the payment of all or any portion of the amounts owing under such bonds or for the purpose of funding, in lieu of cash, all or any portion of any debt service reserve established with respect to such bonds. The governmental unit may pledge as security for its obligations arising under or with respect to any credit enhancement device any revenues pledged to the payment of the related bonds, and such obligations shall in any event be payable from the same sources from which such bonds are payable. For purposes of this subsection, "credit enhancement device" means a letter of credit, line of credit, municipal bond insurance policy, standby purchase agreement or other device or facility used to enhance the creditworthiness or marketability of municipal bonds;

(e) Enter into agreements with bond trustees and deposit funds with trustees for the benefit of bond owners and the providers of credit enhancement devices for bonds;

(f) Enter into covenants for the benefit of bond owners or the providers of credit enhancement devices for bonds which are intended to improve the security of bond owners or providers of credit enhancement devices, or to maintain the tax exempt status of interest payable on bonds or credit enhancement agreements. Such covenants may include, but are not limited to, covenants regarding the issuance of additional bonds and other financial obligations, the imposition and collection of any revenues which secure the bonds, and the priority of payment of bonds and other financial obligations of the governmental unit; and

(g) Establish a debt service reserve for the purpose of paying when due all amounts owing on such bonds, which debt service reserve may be funded out of the proceeds derived from the issuance and sale of such bonds or from such other sources as the governing body of the governmental unit may determine.

(7) A security interest granted by a governmental unit under authority of ORS 288.150 to 288.165 shall attach and be perfected on the date the security interest is granted or the date the governmental unit takes possession of the property in which the security interest is granted, whichever is later. A security interest authorized by ORS 288.150 to 288.165 shall have priority over all other liens and claims. [1991 c.902 §99; 1993 c.97 §5]

288.160 Use of refunding bond proceeds; when governmental unit may issue otherwise authorized refunding bonds. (1) Proceeds of refunding bonds authorized by this section shall be used solely to refund bonds and pay related costs and expenses, and shall not be used to pay for costs of operations or costs of projects not attributable to the refunding.

(2) If authorized by law other than ORS 288.150 to 288.165 and in the manner provided by law, a governmental unit may issue general obligation bonds to refund outstanding bonded indebtedness or to reimburse the governmental unit for costs of capital construction or improvements, if:

(a) The refunding general obligation bonds have been approved by the electors in a manner that qualifies under section 11 (11)(d)(ii), Article XI of the Oregon Constitution, and the obligations which are refunded, or the first obligations in the series, if the refunding general obligation bonds are part of a series of refundings, or the costs which are to be reimbursed, were incurred for capital construction or improvements; or

(b) The refunding general obligation bonds replace an issue of outstanding general obligations bonds which were incurred for capital construction or improvements.

(3) For the purposes of this section, refunding general obligation bonds shall be deemed to replace outstanding general obligation bonds if:

(a) The refunded general obligation bonds are paid or lawfully deemed paid upon issuance of the refunding general obligation bonds; and

(b) The net proceeds of the refunding bonds shall be used to pay only the debt service on the refunded bonds and the costs of issuance of the refunding bonds; and

(c) The bond refunding satisfies at least one of the following tests:

(A) The principal amount of the refunding general obligation bonds does not exceed the outstanding principal amount of the refunded general obligation bonds, plus the amount of any authorized but unissued general obligation bonds of the governmental unit; or

(B) The total amount of principal and interest payable on the refunding general obligation bonds does not exceed the total amount of principal and interest payable on the refunded bonds as of the date of issuance of the refunding general obligation bonds; or

(C) The present value of the debt service on the refunding general obligation bonds does not exceed the present value of the debt service on the refunded general obligation bonds, with the present values calculated at the refunding bond yield.

(4) For purposes of section 11 (13) and 11b (3)(b), Article XI of the Oregon Constitution:

(a) If refunding general obligation bonds replace an issue of general obligation bonds, the refunding general obligation bonds shall be deemed to have been issued on the date of issuance of the bonds which are replaced, or the first issue of general obligation bonds, if the refunding general obligation bonds are part of a series of refundings; and

(b) If the bonds which are replaced were approved by the electors, the refunding general obligation bonds shall be deemed to have been specifically approved by the vote which approved the bonds which are replaced, or the first issue, in a series of refundings.

(5) Notwithstanding ORS 221.200, 255.085, 287.056 or any other law to the contrary, a ballot measure authorizing issuance of refunding general obligation bonds need not state the principal amount of refunding general obligation bonds, so long as the refunding bonds comply with subsection (3) of this section. A ballot measure may authorize issuance of general obligation bonds to refund a specific series of outstanding general obligation bonds, or may authorize issuance of general obligation bonds to refund all or any portion of the outstanding bonds or future general obligation bonds, or any combination thereof.

(6) Refunded general obligation bonds shall be deemed paid within the meaning of subsection (3) of this section if:

(a) The refunded general obligation bonds are deemed paid or defeased under the provisions of the documents authorizing issuance of the refunded general obligation bonds; or

(b) The governmental unit complies with ORS 288.677.

(7) If a governmental unit issues general obligation bonds to refund general obligation bonds that were issued before December 5, 1996, the refunded general obligation bonds and the refunding general obligation bonds shall be treated as having been incurred to finance capital construction and improvements under the laws in effect at the time the refunded bonds were issued. The definitions described in section 11 (13), Article XI of the Oregon Constitution, or statutes enacted to interpret section 11 (13), Article XI of the Oregon Constitution, shall not apply to the refunded bonds or the refunding bonds.

(8) A governmental unit may issue refunding bonds to refund obligations described in section 11 (5)(a)(A) and (B), Article XI of the Oregon Constitution. Ad valorem property taxes may be levied and collected to pay refunding bonds authorized by this subsection to the same extent that ad valorem property taxes could be levied and collected to pay the obligations that are refunded.

(9) A governmental unit may issue refunding bonds to refund bonds that are not general obligations or obligations described in section 11 (5)(a)(A) and (B), Article XI of the Oregon Constitution, but are secured by ad valorem property taxes. Ad valorem property taxes may be levied and collected to pay refunding bonds authorized by this subsection to the same extent that ad valorem property taxes could be levied and collected to pay the bonds that are refunded. [1991 c.902 §100; 1995 c.333 §29; 1997 c.541 §366a]

288.165 When governmental unit may borrow money; form of borrowing; procedure; effect of debt limitation. (1) Subject to any applicable limitations imposed by the Constitution or laws of the State of Oregon or the charter, ordinance or resolution of a governmental unit, a governmental unit or the State of Oregon, acting through the State Treasurer, may borrow money by entering into a credit agreement, or issuing notes, warrants, short-term promissory notes, commercial paper or other obligations:

(a) In anticipation of taxes, grants or other revenues for purposes that include, but are not limited to, the payment of current expenses;

(b) To provide interim financing for capital assets to be undertaken by the governmental unit; or

(c) To refund outstanding obligations.

(2) To secure obligations authorized under this section, a governmental unit or the State Treasurer may:

(a) Pledge its anticipated taxes, grants, other revenues, the proceeds of any bonds or other permanent financing, or any combination thereof;

(b) Segregate any pledged funds in separate accounts which may be held by the governmental unit, the State Treasurer or third parties;

(c) Enter into contracts with third parties to obtain standby lines of credit or other financial commitments designated to provide additional security for obligations authorized by this section;

(d) Establish any reserves deemed necessary for the payment of the obligations; and

(e) Adopt resolutions and enter into agreements containing covenants and provisions for protection and security of the owners of obligations, which shall constitute enforceable contracts with such owners.

(3) Obligations authorized by this section which are issued in anticipation of taxes or other revenues, and any obligations authorized by this section which are issued to refund them, shall not be issued prior to the beginning of, and shall mature not later than, the end of the fiscal year in which the taxes or other revenues are expected to be received. Obligations issued in anticipation of taxes or other revenues shall not be issued in an amount greater than 80 percent of the amount budgeted to be received in the fiscal year in which the obligations are issued.

(4) Obligations authorized by this section which are issued in anticipation of a grant shall mature not later than one year after the date the grant is estimated to be received. Obligations issued to provide interim financing for capital assets shall mature not later than one year from the estimated completion or acquisition of the capital assets.

(5) Refunding obligations issued pursuant to subsection (1)(c) of this section shall mature as soon as the issuer deems practicable and no later than 18 months after the refunding obligations are issued.

(6) The debt limitations imposed by law or the charter of any governmental unit shall not affect the right of any governmental unit to issue obligations under authority of this section, nor shall any of the obligations be taken into consideration in determining the percentage or extent to which the governmental unit is indebted under the debt limitation. Obligations issued to refund outstanding obligations shall not be considered to be within any of such debt limitations.

(7) Except as provided in this section, obligations authorized by this section may be in any form and contain any terms, including provisions for redemption at the option of the owner and provisions for the varying of interest rates in accordance with any index, banker’s loan rate or other standard.

(8) The governing body of an issuing governmental unit, in the ordinance or resolution authorizing the issuance of obligations under this section, may delegate to any elected or appointed official or employee of the governmental unit the authority to determine maturity dates, principal amounts, redemption provisions, interest rates or the method for determining a variable or adjustable interest rate, denominations and other terms and conditions of such obligations which are not appropriately determined at the time of enactment or adoption of the authorizing ordinance or resolution, which delegated authority shall be exercised subject to applicable requirements of law and such limitations and criteria as may be set forth in such ordinance or resolution. Except to the extent of any such delegation, the governmental unit or the State Treasurer shall determine:

(a) The maximum effective rate of interest the obligations shall bear;

(b) The manner of sale;

(c) The discount, if any, the governmental unit may allow;

(d) The terms and conditions by which the obligations may be redeemed prior to maturity;

(e) The maturities of the obligations;

(f) The form and denominations of the notes or other obligations; and

(g) All other terms and conditions related to the sale of the obligations.

(9) The governmental unit or the State Treasurer may contract with third parties to serve as issuing, paying and authenticating agents for any obligations authorized by this section.

(10) Obligations authorized by this section may be sold at public or private sale upon such terms as the governmental unit or the State Treasurer finds advantageous, with such disclosure as the governmental unit or State Treasurer deems appropriate. ORS 287.040 applies to obligations issued by governmental units under this section. [1991 c.902 §101; 1993 c.97 §6]

BROKER COMMISSIONS

288.310 Definitions for ORS 288.310 and 288.320. As used in ORS 288.310 and 288.320, unless the context otherwise requires:

(1) "Subdivision" means any municipal corporation or civil subdivision.

(2) "Broker" means any person, firm, agent, factor, intermediary, partnership, corporation, association, bond house, stockbroker or bond broker.

(3) "Commission" means commissions, percentage fees, brokerage, remuneration or other charges.

(4) "Obligations" means bonds, notes, warrants or other obligations of the state or a subdivision. [Formerly 287.702; 1959 c.213 §1; 1979 c.837 §2]

288.320 Broker commissions prohibited. (1) Neither the state nor any subdivision, nor any officer or agent thereof, shall pay, directly or indirectly, any commission to any broker for preparing, supervising or handling the proceedings of, or for financing or underwriting the sale of, or for acting in an advisory capacity in connection with the issuance or proposed issuance or sale of the obligations of the state or a subdivision.

(2) Nothing contained in this section shall prevent the state or any subdivision from paying a reasonable fee for financial programming and marketing assistance based on the value of the service rendered in connection with the issuance or proposed issuance or sale of the obligations of the state or of a subdivision.

(3) Nothing contained in this section shall prohibit the state or any subdivision from entering into a bona fide agreement to pay, nor from paying, reasonable attorney fees to duly licensed attorneys who are not also brokers and to them only, without distribution or division with any broker, as actual compensation for furnishing legal advice to the state or the subdivision, or in settlement of opposing attorney fees arising from claims or litigation against the state or the subdivision, or for actual legal work performed in the preparation of the proceedings relating to issues of the obligations, or for the examination of transcripts of proceedings relating thereto, or for the furnishing of opinions as to the regularity of such proceedings or as to the validity of such obligations. [Formerly 287.704; 1959 c.213 §2; 1979 c.837 §3; 1987 c.158 §40]

PAYMENT OR REISSUANCE OF LOST, MUTILATED OR DESTROYED EVIDENCE OF INDEBTEDNESS

288.410 Definitions for ORS 288.410 to 288.460. As used in ORS 288.410 to 288.460, unless the context requires otherwise:

(1) "Evidence of indebtedness" includes interest coupons originally attached to bonds issued by an issuer even though detached therefrom subsequent to the date on which such bonds were issued.

(2) "Duplicate" means a duplicate of an instrument.

(3) "Governing body" means the person, board, commission, council or other body authorized to direct the issuance of instruments for the issuer.

(4) "Indemnity bond" means an undertaking conditioned that the asserted owner of an instrument, as principal, will protect the issuer and the paying officer against loss or liability resulting from any demand or payment of the principal of or interest on an instrument and that such asserted owner will surrender such instrument to the paying officer if it comes into the possession of the asserted owner.

(5) "Instrument" means any lost, mutilated or destroyed evidence of indebtedness of an issuer, other than warrants or checks.

(6) "Issuer" means the state, county, municipality, district or civil subdivision which has issued an instrument.

(7) "Lost" means lost or stolen for a length of time and under circumstances that indicate that the instrument has been destroyed or irrevocably lost, that it is not held by any person as the property of the person and that it will not be the basis of a claim against the issuer.

(8) "Mutilated" means defacement of an instrument to the extent that its negotiation may be impaired.

(9) "Paying officer" means the public officer, other than a fiscal or paying agent, to whom instruments may be presented for payment. [1959 c.410 §1]

288.420 Payment of matured instrument that has been lost, mutilated or destroyed. (1) The paying officer shall pay the principal of or interest on any instrument at or after maturity when, except as provided in subsections (2) and (3) of this section, the asserted owner of such instrument:

(a) Submits a satisfactory affidavit describing the instrument and the circumstances surrounding the acquisition of such instrument and giving a detailed statement of the circumstances surrounding its loss, mutilation or destruction; and

(b) Surrenders the instrument, if mutilated and in the possession of the asserted owner; and

(c) Furnishes an indemnity bond executed by two or more sureties satisfactory to the paying officer and qualifying as in the case of sureties for bail for twice the face amount of the instrument plus interest due thereon; or

(d) Furnishes an indemnity bond executed by a surety company licensed to do business in the state for the face amount of the instrument plus interest due thereon.

(2) If such asserted owner does not have personal knowledge of the information which must be contained in the affidavit required under subsection (1)(a) of this section, the person having such personal knowledge may make the affidavit.

(3) If the face amount of an instrument plus interest due thereon is $1,000 or more, a surety company licensed to do business in the state must execute the indemnity bond required under subsection (1) of this section. [1959 c.410 §2]

288.430 Issuance of duplicate for instrument that has been lost, mutilated or destroyed. (1) If an instrument has not yet matured, the governing body of the issuer shall direct the appropriate officer to execute and deliver a duplicate to the asserted owner of such instrument when, except as provided in subsection (2) of this section, such asserted owner:

(a) Submits a satisfactory affidavit describing the instrument and the circumstances surrounding acquisition of such instrument and giving a detailed statement of the circumstances surrounding its loss, mutilation or destruction; and

(b) Surrenders the instrument, if mutilated and in the possession of the asserted owner; and

(c) Furnishes an indemnity bond executed by a surety company licensed to do business in the state for the face amount of the instrument plus interest due and to become due thereon; and

(d) Deposits a sum sufficient to pay the expenses of issuing a duplicate with an appropriate officer of the issuer.

(2) If the asserted owner does not have personal knowledge of the information which must be contained in the affidavit required under subsection (1)(a) of this section, the person having such personal knowledge may make the affidavit. [1959 c.410 §3]

288.435 When requirements of ORS 288.420 and 288.430 may be waived. If the asserted owner of a lost, mutilated or destroyed instrument that was registered provides an affidavit, certification or other reliable proof that the governing body or paying officer reasonably finds protects the issuer from conflicting claims for payment under the registered instrument, the paying officer may waive the requirements of ORS 288.420 and the governing body may waive the requirements of ORS 288.430 with respect to that registered instrument. [1993 c.97 §20]

288.440 Form of duplicate instrument. If any duplicate be issued, it shall be in the same form and amount and bear the same serial number, date of issue and date of maturity as the original instrument. If the instrument be a bond with interest coupons attached, only interest coupons that have not matured under the terms of the original instrument as of the date the duplicate is issued shall be attached to the duplicate. The officer issuing the duplicate shall indorse the word "DUPLICATE" and the date of its issuance upon its face and upon the face of any interest coupon attached thereto. The officer issuing the duplicate shall sign the duplicate on behalf of the issuer. [1959 c.410 §6]

288.450 Waiver of requirement of indemnity bond. The paying officer may waive the requirement of an indemnity bond as imposed by ORS 288.420 and the governing body may waive such requirement as imposed by ORS 288.430 when:

(1) The asserted owner of the instrument furnishes an undertaking for the face amount of such instrument plus all interest due and to become due thereon to protect the issuer and the paying officer from loss or liability resulting from any demand or payment of the principal of or interest on such instrument; and either

(2) The asserted owner surrenders a mutilated instrument that is so complete that any missing portion thereof could not form the basis of a valid claim against the issuer; or

(3) The asserted owner of the instrument is the state in its individual or fiduciary capacity or any county, municipality, district or civil subdivision which is not in default on the payment of any of its outstanding obligations. [1959 c.410 §4]

288.460 Petition to circuit court; court order requiring payment of instrument or issuance of duplicate. If any paying officer refuses to pay or if any governing body refuses to direct the issuance of a duplicate, the asserted owner of an instrument may petition any circuit court for an order requiring the paying officer or governing body to show cause why the paying officer or governing body should not be required to pay such instrument in accordance with its terms or direct the issuance of a duplicate. If, upon hearing, it appears to the satisfaction of the court that the petitioner is the owner of the instrument, that it has been lost, mutilated or destroyed and that no sufficient cause has been shown why it should not be paid or a duplicate thereof issued, the court shall make an order requiring the paying officer to pay it or requiring the governing body to direct the issuance of a duplicate upon such conditions as the court considers adequate for the protection of the issuer and the paying officer against loss or liability resulting from any demand or payment of the principal of or interest on the instrument. [1959 c.410 §5]

BONDS GENERALLY

288.500 Improper expenditure of proceeds of certain exempt bonded indebtedness; remedies; exception. (1) If a court of competent jurisdiction determines that the proceeds of an issue of exempt bonded indebtedness is used for expenditures that are not expenditures for capital construction or capital improvements, the court may require the governmental unit issuing the bonded indebtedness to take only the following actions:

(a) The court may order the governmental unit to replace the misspent proceeds on a reasonable schedule determined by the court, with interest, from sources other than the taxes that the governmental unit levies to pay the bonded indebtedness, and to use the replaced funds for capital construction or capital improvement expenditures or to pay bond debt service; or

(b) If the governmental unit fails to comply with an order to replace the misspent proceeds, or acknowledges that the governmental unit is unable to replace the misspent proceeds, the court may determine that a portion of the future levies to pay the bonded indebtedness shall be subject to the limits of section 11b, Article XI of the Oregon Constitution. The portion that is subject to those limits shall be determined by calculating the amount of the taxes that are necessary to pay the principal and interest on the bonded indebtedness that is allocable to the misspent proceeds.

(2) No action may be filed or maintained against a governmental unit because of an alleged expenditure of proceeds of exempt bonded indebtedness for purposes other than capital construction or improvements, if the misspent amount is less than $5,000. [1997 c.541 §366b]

Note: 288.500 to 288.513 were enacted into law by the Legislative Assembly but were not added to or made a part of ORS chapter 288 or any series therein by legislative action. See Preface to Oregon Revised Statutes for further explanation.

288.505 Determining date of issuance of bonded indebtedness. For purposes of sections 11 and 11b, Article XI of the Oregon Constitution, the date on which bonded indebtedness is issued is the earliest date on which any bond in a series is issued. [1997 c.541 §366c]

Note: See note under 288.500.

288.510 [1969 c.63 §1; 1971 c.366 §1; 1973 c.488 §7; 1975 c.642 §27; 1981 c.23 §2; repealed by 1981 c.94 §1 (288.515 to 288.550 enacted in lieu of 288.510)]

288.513 Determining true cash value for bonded indebtedness. In determining the "true cash value" of taxable property for the purpose of calculating the total amount of indebtedness which may be incurred by the state or local governments under the Oregon Constitution or laws of the State of Oregon, the "real market value," as defined in section 11b (2)(a), Article XI of the Oregon Constitution, may be used if and to the extent that the "real market value" does not exceed the "true cash value." [1991 c.902 §1]

Note: See note under 288.500.

288.515 Definitions for ORS 288.515 to 288.600. As used in ORS 288.515 to 288.600:

(1) "Bonds" means general obligation, revenue or tax increment bonds, or notes of a public body.

(2) "Public body" means the State of Oregon, its agencies, institutions or any municipality authorized by law to issue bonds.

(3) "Municipality" means a political subdivision of this state and municipal, quasi-municipal and public corporations and intergovernmental entities organized under ORS chapter 190 authorized by law to issue bonds. [1981 c.94 §2; 1983 c.347 §1; 1991 c.583 §6]

288.517 Policy concerning bond covenants. The Legislative Assembly finds and declares that:

(1) It is a matter of statewide concern that certain covenants made by public bodies regarding any pledge of revenues securing bonds or other obligations not be impaired by subsequent initiative or referendum measures.

(2) These covenants usually are in the form of a promise to charge and collect rates, fees, tolls, rentals or other charges sufficient to produce revenues to maintain a specified level of debt service coverage.

(3) Such covenants are material to the security for the bonds or other obligations and to investors’ expectations regarding timely payment of the bonds or other obligations. Any possibility that such covenants 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. [1997 c.171 §2]

Note: 288.517 and 288.518 were added to and made a part of 288.515 to 288.600 by legislative action but were not added to any smaller series therein. See Preface to Oregon Revised Statutes for further explanation.

288.518 Additional powers of municipality when issuing revenue bonds. Any municipality that is authorized to issue revenue bonds by any law other than the Uniform Revenue Bond Act, ORS 288.805 to 288.945, may, when issuing those bonds, exercise the powers specified in ORS 288.825 (3) and (4). The municipality may also pledge any revenues that such authorizing law allows the municipality to commit to pay the revenue bonds and any amounts held as reserves for the revenue bonds. [1997 c.171 §3]

Note: See note under 288.517.

288.520 Public body to determine interest, principal amount, discount, terms; form of authority to issue; maximum interest rate for state bonds. (1) Except as provided in subsection (5) of this section, a public body issuing bonds shall determine:

(a) The maximum effective rate of interest, if any, which the bonds shall bear including variable interest rates if the public body so decides;

(b) The principal amounts, consistent with any limitations established by law, of the bonds or series of bonds to be issued;

(c) The discount or premium, if any, which the public body will allow;

(d) The terms by which the bonds may be redeemed prior to maturity, including, but not limited to, the amount of any permitted premium;

(e) The form of the bonds;

(f) The term of the bonds;

(g) The schedule for payment of bond principal and interest;

(h) The denominations of the bonds; and

(i) For revenue bonds, tax increment bonds or notes, the type of sale.

(2) When issuing general obligation bonds, the public body must sell the bonds in conformance with ORS 287.014 to 287.022.

(3) A municipality may establish a sinking fund for the purpose of repaying principal and interest when due and may covenant to make contributions to that fund.

(4) Notwithstanding any other provision of law requiring bonds to be authorized by ordinance, a public body may authorize the issuance of bonds by order or resolution of its governing body, and in the ordinance, resolution or other official authorization, a public body may delegate to any elected or appointed official or employee of the public body the authority to determine the maturity dates, principal amounts, redemption provisions, interest rates or the method for determining a variable or adjustable interest rate, denominations and other terms and conditions of the bonds that are not appropriately determined at the time of enactment of the authorizing ordinance or resolution. The delegated authority shall be exercised subject to the applicable requirements of law and any limitations and criteria set forth in the ordinance, resolution or other official authorization.

(5) When a public body issuing general obligation bonds is the State of Oregon or one of its agencies, the maximum effective rate of interest which the bonds shall bear is 13 percent per annum. However, if an agency is unable to sell the bonds after a reasonable marketing effort, the maximum effective rate of interest may be increased but shall not exceed 14 percent per annum.

(6) Notice of any redemption authorized under subsection (1)(d) of this section shall be given in the manner directed by the public body, which shall include, if the bonds are not in registered form, publication in at least one issue of a business and financial newspaper published within the City of Portland, Oregon.

(7) Notwithstanding any other law, a public body is not required to publish a notice of redemption for bonds that are in registered form. [1981 c.94 §3; 1981 c.661 §4; 1981 c.879 §1; 1983 c.347 §2; 1985 c.441 §3; 1993 c.97 §7; 1997 c.171 §13]

288.523 Appointment of bond counsel; exception of ORS 279.712. (1) Notwithstanding any other provision of law relating to the appointment of bond counsel, a public body may provide for the appointment of bond counsel to advise and assist the public body in the issuance of bonds or certificates of participation, including the issuance of refunding bonds and obligations, and in the lawful administration of outstanding bonds or certificates of participation. The services provided by an appointed bond counsel may include:

(a) Advising the public body concerning the legality of specific proposed taxable or tax-exempt obligations and the compliance, in substance and procedure, of those obligations with law, including but not limited to federal securities laws and regulations and federal and state tax laws and regulations;

(b) Issuing legal opinions, including opinions on the authorization, tax status and the binding effect of the obligations and their associated documents and on the lawful use of the proceeds of the obligations, as may be required by the demands of the bond market for the obligations;

(c) Advising the public body on legal procedures and practices in the bond market for the obligations, including advice on the structuring and marketing of the obligations;

(d) Preparing or assisting in the preparation of any document related to a specific issue of obligations, including but not limited to a bond authorization, bond resolution, indenture, prospectus, preliminary official statement, official statement, bond sale notice, bond form, bid form or bond purchase agreement;

(e) Advising the public body concerning the maintenance of the tax status of specific obligations, compliance with any requirements for representations or disclosures relating to the obligations and compliance with any documents issued or executed with respect to the obligations; and

(f) Advising the public body concerning accounting and investment procedures recommended or required for compliance with tax and federal securities and rebate requirements.

(2) No appointment of bond counsel under this section shall be construed as authorizing bond counsel to advise or represent the public body on matters that are committed by statute to the Attorney General or by local law to counsel for the public body. An appointment of bond counsel by a state agency or institution shall be subject to the prior approval of the State Treasurer and the Attorney General.

(3) ORS 279.712 does not apply to an appointment of bond counsel under this section. [1995 c.247 §2; 2001 c.536 §7]

Note: 288.523 was added to and made a part of 288.515 to 288.600 by legislative action but was not added to any smaller series therein. See Preface to Oregon Revised Statutes for further explanation.

288.525 Expenditure of bond proceeds for interest or redemption. (1) A public body may expend bond proceeds for the payment of interest on the bonds for the period established by the public body.

(2) A public body may expend bond proceeds to purchase or redeem the bonds from which proceeds are derived. [1981 c.94 §4; 1983 c.347 §3]

288.530 Deferral of initial payment of principal on bonds; determination of interest periods. A public body may defer initial payment of principal on bonds for a period of time it reasonably determines, and shall determine whether interest should be paid semiannually or otherwise. [1981 c.94 §5]

288.535 Use of seal. A public body authorized by law to possess a seal shall cause such seal to be imprinted, attached, impressed or otherwise evidenced on any bond of which it is the issuer. However, the failure to imprint, attach, impress or otherwise evidence a seal on any bond shall not affect the validity thereof. [1981 c.94 §6]

288.540 Authorized signatures. Bonds of a public body shall be executed by the signature or signatures of one or more officers as specified by the public body. Signatures of the designated officers may be either manual or facsimile, but at least one signature shall be manual in form. However, all signatures of the public body may be by facsimile if the bonds are to be authenticated by at least one manual signature. [1981 c.94 §7; 1995 c.333 §5]

288.545 Form of bonds. Bonds may be issued in coupon form, with or without privilege of registration, or may be in registered form, or both, with the privilege of converting and reconverting from one form to another, upon such terms and conditions as provided by the public body and applicable provisions of federal law. As evidence of indebtedness, the public body may utilize immobilized or book-entry delivery systems and may use depositories for these purposes. [1981 c.94 §8; 1983 c.129 §1]

288.550 Preliminary official statement not required in certain circumstances. The preliminary official statement required for general obligation bonds by ORS 287.018 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 general obligation 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. [1981 c.94 §9]

288.560 Destruction of bonds and coupons. At the option of the treasurer or other fiscal officer of a subdivision making use of a paying agent other than the state’s fiscal agency, bonds and coupons may be held for destruction as are state bonds and coupons under ORS 288.120 and may be destroyed in the same manner as state bonds and coupons are destroyed under ORS 288.120. [1981 c.252 §2]

288.570 Appointment of paying agents. (1) In connection with the issuance of bonds, any municipality may appoint one or more paying agents to serve as paying agent on bonds issued after May 26, 1983.

(2) The paying agents designated under subsection (1) of this section shall either be a financial institution authorized to do business in Oregon or the state’s fiscal agent as provided for in ORS 288.020.

(3) Any municipality which is required by law to use the county treasurer as paying agent may appoint a paying agent and registrar. The municipality shall provide the county treasurer written notice of such appointment no later than 20 days following the appointment.

(4) Any municipality appointing a paying agent under the authority of ORS 288.545 and 288.570 to 288.590 may:

(a) Provide for powers, duties and functions and compensation of such paying agent.

(b) Limit the liabilities of such paying agent.

(c) Prescribe a method for resignation, removal, merger or consolidation of such paying agent, appointment of a successor paying agent and transfer of right and properties to such successor paying agent.

(5) The entity through which bonds are payable shall serve as registrar under such terms and conditions as may be required by rule of the Oregon Municipal Debt Advisory Commission in effect at the time such agreement is executed.

(6) If the municipality’s paying agent is the state’s fiscal agent, the municipality shall also designate a coregistrar within the State of Oregon. The coregistrar may be either a financial institution authorized to do business in Oregon or a municipality. A municipality may appoint the state’s fiscal agent as paying agent for bonds issued by the municipality. The municipality is not required under this section to appoint the state’s fiscal agent as paying agent for all bonds issued by the municipality.

(7) Notwithstanding subsection (5) of this section, a municipality may elect to serve as its own paying agent, and in cases where the municipality so elects, it may contract with a financial institution authorized to do business in Oregon or the State of Oregon’s fiscal agent to register bonds at the time of original issuance.

(8) The authority granted by ORS 288.545 and 288.570 to 288.590 is in addition to any authority to appoint a paying agent or registrar provided by statute or charter amendment. [1983 c.129 §§3,5; 1985 c.441 §4; 1993 c.97 §8]

288.580 County treasurer as paying agent. A county treasurer may enter into agreements with financial institutions to serve as paying agent and registrar, as provided in ORS 288.570 (1) to (8), for any bond issue for which the county treasurer serves as paying agent. A county treasurer may recover costs from the municipality for the service. [1983 c.129 §4; 1985 c.441 §5]

288.590 Registered bond ownership not public record. The records of registered bond ownership, whether maintained by the state or a municipality or its registrar, are not public records within the meaning of ORS 192.410 (4). [1983 c.129 §6]

288.592 Refunding bonds. (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.

(2) To refund outstanding bonds, a public body may issue and deliver bonds to refund 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, 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.

(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, 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.

(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. [1987 c.91 §2; 1993 c.97 §9; 1999 c.559 §10]

288.594 Creation, perfection, priority and enforcement of lien of pledge by public body; UCC not applicable. (1) As used in this section:

(a) "Obligation" means a revenue bond, limited tax bond, general obligation bond, certificate of participation, note, lease purchase or installment purchase obligation, financing agreement, credit agreement or other contractual undertaking of a public body, however denominated, to repay borrowed moneys or to pay the purchase price of property acquired by the public body, a credit enhancement device, as the term is defined in ORS 288.805, given as additional security for an obligation described in this paragraph or an intergovernmental agreement entered into under ORS chapter 190.

(b) "Operative document" means a resolution, ordinance, trust indenture, security agreement or other document in which a public body pledges property as security for an obligation of the public body.

(c) "Pledge" means to create a security interest in or a lien on property to secure payment or performance of an obligation. The security interest or lien is created by mortgaging, assigning or encumbering property or by creating a security interest in any other manner.

(d) "Pledgee" means:

(A) A trustee for the holder of an obligation; or

(B) The holder of an obligation if a trustee was not appointed in the operative document or if the operative document authorizes the holder of an obligation to foreclose the lien of a pledge and enforce the remedies consequent to the pledge in lieu of the trustee.

(e) "Property" means real or personal property of a public body, tangible or intangible, whether owned by the public body when the pledge is made or acquired subsequently by the public body. "Property" also means revenues as that term is defined in ORS 288.805, contract rights, receivables and securities.

(2) Notwithstanding the Uniform Commercial Code, this section governs the creation, perfection, priority and enforcement of a lien of a pledge made by a public body. 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) A public body may pledge all or a portion of its property as security for payment of its obligations and for performance of a covenant or agreement entered into in relation to the issuance of an obligation of the public body. The lien created by the 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.

(4) Except as provided otherwise expressly in the operative document, the lien of the pledge is superior to and has priority over other claims and liens of any kind.

(5) When property subject to a pledge is acquired by a public body after the pledge is made, the property is subject to the lien upon acquisition by the public body without physical delivery, filing or any other act, and the lien shall relate to the time the public body originally made the pledge.

(6) A public body may reserve the right to pledge a pledged property as security for an obligation subsequently issued by the public body. If a public body reserves that right, subject to the terms of the operative document that created the 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 other claims and liens of any kind 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.

(7) Except as provided in subsection (8) of this section, 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.

(8) When pledged property consists of moneys or property 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 obligations subject to the terms, conditions and limitations in the operative document.

(9) 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 the rates, fees, tolls, rentals or other charges pledged to secure outstanding bonds or other obligations.

(10) 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 periodically set the rates and charges:

(a) That generate the 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) In accordance with a formula established in the operative document governing the revenue bonds or other borrowings. The formula may provide for rates 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; and

(I) The funds needed to establish or maintain reserves required by law or contract and the funds needed to maintain an unencumbered carryforward fund balance or working capital to meet unanticipated expenses or fluctuations in revenues that may arise;

(c) At levels sufficient to maintain underlying credit ratings assigned to the revenue bonds and other borrowings by one or more nationally recognized credit rating services without regard to any improvement in credit ratings due to the provision of additional security for revenue bonds and other borrowings through bond insurance or credit enhancement; or

(d) 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.

(11) Without regard to whether a rate covenant was entered into before or after October 23, 1999, a rate covenant authorized by this section is a contract that binds the public body making the rate covenant and is enforceable against the public body in accordance with the terms of the rate covenant. [1987 c.91 §3; 1997 c.171 §14; 1999 c.559 §5; 2001 c.537 §3]

Note: Section 8 (3), chapter 537, Oregon Laws 2001, provides:

Sec. 8. (3) The amendments to ORS 288.594 by section 3 of this 2001 Act apply to a pledge of property as security for an obligation made before, on or after the effective date of this 2001 Act [January 1, 2002]. [2001 c.537 §8(3)]

288.596 Variable rate bonds; credit enhancement agreements. Any public body authorized to issue variable rate bonds may:

(1) Enter into letter of credit or other credit enhancement agreements in order to provide liquidity or security for bonds. Such credit enhancement agreements shall be payable solely from the same sources of funds which the public body may legally commit to pay debt service on the bonds and the public body may pledge as security for its obligations arising under or with respect to any credit enhancement agreement any revenues pledged to the payment of the related bonds or from which the bonds are payable.

(2) Issue bonds which are subject to redemption at the option of the owner. However, such right of redemption must be limited to money available under a credit enhancement agreement, proceeds of the bonds and reserves of the public body established for such purpose. [1987 c.91 §4; 1995 c.333 §6]

288.598 Authority to pay rebates and make investments necessary for tax-exempt bond interest. Notwithstanding any other provision of law, a municipality issuing bonds, the interest on which is intended to be excludable from gross income under federal income tax laws, may:

(1) Covenant for the benefit of the owners of the bonds to pay rebates that are required under the federal income tax laws in order for interest on the bonds to be excludable from gross income. The rebates shall be considered an interest expense of the bonds, and may be paid from any source of funds which may be used to pay interest on the bonds, or from any source of funds which earns interest that is subject to rebate.

(2) Invest in United States Government securities or other legal investments which have a yield that is less than current market yield, in order to facilitate compliance with federal laws which govern whether interest on the bonds is excludable from gross income under federal income tax laws. [1987 c.840 §4]

288.600 Issuance of bonds with taxable interest authorized. A public body may issue bonds, notes or other evidences of indebtedness the interest on which is taxable for federal income tax purposes to the holders of the bonds, notes or other evidences of indebtedness. Notwithstanding the grant of such authority to a public body, a public body shall consent to such taxation expressly and in writing at the time at which the bonds, notes or other evidences of indebtedness are issued. The express written consent shall be made a part of the transcript of the proceedings of the issuance. [1987 c.840 §8]

REFUNDING BONDS

288.605 Definitions for ORS 288.605 to 288.695. 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.

(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.

(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.

(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;

(c) Public housing bonds and project notes fully secured by contracts with the United States;

(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.

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

(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.

(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.

(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.

(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. [1977 c.536 §3; 1997 c.820 §1; 1999 c.559 §11]

288.610 Legislative findings; applicability of ORS 288.605 to 288.695. (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 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 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. [1977 c.536 §2; 1999 c.559 §12]

288.615 Power to issue advance refunding bonds; allowable purposes. (1) Subject to subsections (3) and (4) of this section, the governing body of any public body may by ordinance provide for the issuance of bonds without an election to refund outstanding bonds, including advance refunding bonds heretofore or hereafter issued by the public body or its predecessor, or to fund the obligations of the public body under any contract, lease, sublease or agreement entered into with the Oregon Mass Transportation Financing Authority pursuant to ORS 267.227 and 391.500 to 391.660, and to pay redemption or prepayment premiums and costs of issuance, only in order:

(a) To pay or discharge all or any part of such outstanding obligations or series or issue of bonds, including any interest thereon, in arrears or about to become due and for which sufficient funds are not available;

(b) To effect a favorable reorganization of the permanent debt structure of the issuer; or

(c) To effect a savings discounted to present value to the public body or in the event of industrial development bonds, to effect a savings discounted to present value to the principal obligor of the revenue bonds.

(2) When issuing refunding revenue bonds or advance refunding revenue bonds to refund revenue bonds that were issued in accordance with ORS 288.815, a municipality, as defined by ORS 288.805 (3), is not required to comply with the procedures prescribed in ORS 288.815 in issuing bonds pursuant to this section.

(3) To determine whether or not a saving will be effected, consideration shall be given to the interest to fixed maturities of the refunding bonds and the bonds or obligations to be refunded, the costs of issuance of the refunding bonds, the redemption or prepayment premiums, if any, to be paid and the known earned income from the investment of the refunding bond proceeds pending redemption or prepayment of the bonds or obligations to be refunded.

(4) The refunding plan shall be subject to provisions concerning payment and to all other contractual provisions in the proceedings authorizing the issuance of the bonds or obligations to be refunded or otherwise appertaining thereto and to the review and authorization of the State Treasurer.

(5) For purposes of ORS 288.605 to 288.690, wherever reference is made to "the bonds or obligations to be refunded" or any words of similar import, such reference shall include the following:

(a) In the case of an advance refunding of general obligation bonds, limited tax bonds, as defined in ORS 288.150, revenue bonds or certificates of participation, the general obligation, limited tax or revenue bonds or the certificates of participation to be refunded; or

(b) In the case of a funding of the obligations of a mass transit district under any contract, lease, sublease or agreement entered into with the Oregon Mass Transportation Financing Authority under ORS 267.227 and 391.500 to 391.660, both the obligations of the mass transit district under such contract, lease, sublease or agreement and the revenue bonds issued by the Oregon Mass Transportation Financing Authority under ORS 391.500 to 391.660 which are secured by such contract, lease, sublease or agreement.

(6) Subject to ORS 288.605 to 288.690, a mass transit district may exercise the powers conferred upon public bodies under this section and ORS 288.637 and issue advance refunding bonds for the purpose of refunding the obligations of such mass transit district under any contract, lease, sublease or agreement with the Oregon Mass Transportation Financing Authority under ORS 267.227 and 391.500 to 391.660, in which event such advance refunding bonds shall, for purposes of ORS 288.605 to 288.690, be deemed to be issued for the purpose of the advance refunding of revenue bonds.

(7) A financing agreement may be used to refund outstanding financing agreements or certificates of participation under this section. If the obligation to be refunded is a financing agreement or a certificate of participation, then the advance refunding obligation, without regard to the type of obligation, may be secured by the same claims against the public body that secure the financing agreement or certificate of participation to be refunded. [1977 c.536 §4; 1985 c.429 §3; 1993 c.97 §10; 1997 c.820 §2]

288.620 Review and approval by State Treasurer; expenses. (1) Refunding bonds may not be issued under ORS 288.605 to 288.695 unless authorized by the State Treasurer under this section.

(2) Following adoption of an ordinance or resolution approving a refunding plan to issue advance refunding bonds, the refunding plan shall be submitted to the State Treasurer for review and approval.

(3) Following adoption of an ordinance or resolution approving a refunding plan to effect a forward current refunding, the refunding plan must be submitted to the State Treasurer for review and approval if the State Treasurer has adopted rules under ORS 288.592 related to forward current refunding bonds.

(4) After review of a proposed refunding plan, the State Treasurer shall advise the public body, in writing, whether the sale of refunding bonds is authorized. Failure of the State Treasurer 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.

(5) 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.

(6) 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. [1977 c.536 §17; 1989 c.435 §1; 1999 c.559 §13; 2001 c.47 §1]

288.625 Manner of issuance. Advance refunding bonds may be issued or a forward current refunding may be effected for general obligation, revenue or special revenue bonds, at the discretion of the governing body, in the manner provided in ORS 287.016 to 287.022. [1977 c.536 §5; 1987 c.840 §2; 1999 c.44 §20; 1999 c.559 §14]

288.630 Oregon Municipal Debt Advisory Commission assistance. 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. [1977 c.536 §6; 1999 c.559 §15]

288.635 Bonds to be refunded; time of redemption. (1) Bonds may be refunded under ORS 288.605 to 288.695 when the holders of the bonds to be refunded voluntarily surrender them for exchange or payment or if they mature or are subject to redemption prior to maturity of the refunding bonds.

(2) In any advance refunding plan created pursuant to ORS 288.605 to 288.695, the governing body shall provide, irrevocably in the ordinance authorizing the issuance of the advance refunding bonds, for the redemption of the bonds to be refunded not later than six months from the date they are first subject to redemption. [1977 c.536 §7]

288.637 Early redemption; advance refunding; forward current refunding. (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, 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, advance refunding or forward current refunding furthers such policies, the governing body may proceed with the redemption, advance refunding or forward current refunding authorized by this section. [1985 c.429 §2; 1993 c.97 §23; 1999 c.559 §16]

288.640 Redemption of advance refunding bonds. The ordinance or other official action authorizing the issuance of advance refunding bonds pursuant to ORS 288.605 to 288.695 may contain any redemption terms deemed advisable in the discretion of the governing body or its designee. [1977 c.536 §8; 1993 c.97 §24; 1995 c.333 §7]

288.645 Limit on advance refunding amount. Advance refunding bonds shall not be issued in a principal amount in excess of the minimum principal amount necessary:

(1) To purchase a principal amount of government securities which, together with the interest earnings thereon, will be sufficient to pay all installments of principal, interest and redemption premiums, if any, on the bonds being refunded when they fall due in accordance with the advance refunding plan; and

(2) To pay any amounts charged to the issuer as administrative costs, expenses or fees in connection with the advance refunding transaction which can be paid from the proceeds of the advance refunding bond issue. [1977 c.536 §9]

288.650 Investment of proceeds; approval by State Treasurer. Prior to the application of the proceeds derived from the sale of advance refunding bonds to the purposes for which the refunding bonds have been issued, the advance refunding bond proceeds, together with any other funds the governing body may set aside for the payment of the bonds to be refunded, may be invested and reinvested only in government obligations. Investment shall take place at a time or at times as may be required to provide funds sufficient to pay principal, interest and redemption premiums, if any, in accordance with the advance refunding plan. To the extent incidental expenses have been capitalized, the advance refunding bond proceeds may be used to defray such expenses. The governmental obligations used for investment and reinvestment of advance refunding bonds shall be approved by the State Treasurer in accordance with ORS 288.620. [1977 c.536 §10]

288.655 Tax levies. (1) Notwithstanding any other provision of law, no governing body shall cause to be levied upon the taxable property within its district a tax to pay the maturing interest and principal on any bond or bonds being refunded pursuant to ORS 288.605 to 288.695, if the amount owed on the bonds being refunded is secured by the investment of the advance refunding bond proceeds together with any other funds the governing body may set aside for the payment of the bonds to be refunded.

(2) Subject to ORS 288.665, each governing body, where applicable, shall annually cause to be levied upon the taxable property within its boundaries a sum sufficient, with other revenues that are available, to pay the maturing interest and principal of all advance refunding bonds that are general obligation bonds and, within constitutional and statutory limitations, a sum sufficient, with other revenues that are available, to pay the maturing interest and principal of all limited tax bonds, as defined in ORS 288.150. [1977 c.536 §11; 1997 c.820 §3]

288.660 Trustee; use of proceeds; additional pledges. (1) The governing body may contract with respect to the safekeeping and application of the advance refunding bond proceeds and other funds included therewith and the income therefrom including the right to appoint a trustee which may be any trust company or state or national bank having powers of a trust company within the State of Oregon.

(2) The governing body may provide in the refunding plan that until such moneys are required to redeem, retire or pay interest and principal installments on the general obligation or revenue bonds to be refunded, the refunding bond proceeds and other funds and the income from the advance refunding bond proceeds shall be used to pay and secure the payment of the principal of and the interest on the advance refunding bonds.

(3) For the payment of revenue refunding bonds, the governing body may pledge, or otherwise make the bonds payable from, any revenues which might legally be pledged for the payment of revenue bonds of the issuer of the type being refunded.

(4) Provisions shall be made by the governing body for moneys sufficient in amount to accomplish the refunding as scheduled. [1977 c.536 §12; 1993 c.97 §11]

288.665 Advance refunding of revenue bonds; conditions. (1) Subject to subsection (2) of this section, when a public body has irrevocably set aside for and pledged to the payments of revenue bonds to be refunded advance refunding bond proceeds and other moneys in amounts which together with known earned income from the investment of the advance refunding bond proceeds are sufficient in amount to pay the principal of and interest and any redemption premiums on such revenue bonds as the same become due and to accomplish the refunding as scheduled, the governing body may provide that the advance refunding revenue bonds shall be payable from any source which, at the time of the issuance of either the advance refunding bonds or the revenue bonds to be refunded, might legally either be or have been designated as a source from which the advance refunding revenue bonds shall be payable or be or have been pledged for the payment of the revenue bonds refunded to the extent it may legally do so, notwithstanding the designation or pledge of such revenues for the payment of the outstanding revenue bonds being refunded.

(2) The power granted to a public body under subsection (1) of this section shall be exercised only to the extent that all provisions of law and all other contractual provisions in the proceeding authorizing the issuance of the bonds to be refunded are respected. [1977 c.536 §13; 1993 c.97 §12]

288.670 Refunding of certain general obligation bonds; conditions. (1) Except for advance refunding bonds sold pursuant to ORS 288.615 (1)(a), the maturity dates of general obligation bonds issued to refund voted general obligation bonds may not be more than 30 days after the maturity dates of the bonds to be refunded. However, as long as the total debt service on the refunding bonds does not exceed the total debt service on the bonds to be refunded, the amounts maturing on any given date may be changed, and the refunding general obligation bonds may mature earlier than the bonds to be refunded.

(2) Subsection (1) of this section does not apply to general obligation bonds of the State of Oregon. [1977 c.536 §14; 1983 c.798 §9; 2001 c.47 §2]

288.675 Amounts credited to bond retirement not indebtedness. In computing indebtedness for the purpose of any constitutional or statutory debt limitation there shall be deducted from the amount of outstanding indebtedness the amounts of money and investments credited to or on deposit for general obligation or special revenue bond retirement. [1977 c.536 §15]

288.677 Amount credited to escrow account not indebtedness. If a public body causes government obligations to be placed irrevocably in escrow in an amount calculated to be sufficient to pay principal and interest on outstanding bonds issued by the body as they mature or have been irrevocably called for prior redemption, in accordance with rules established by the State Treasurer, the amounts of money and investments credited to or on deposit for the payment of such outstanding bonds shall be deducted from the amount of outstanding indebtedness in computing indebtedness for the purpose of any constitutional or statutory debt limitation. Bonds for which government obligations have been so deposited irrevocably in escrow shall be deemed to be defeased to the same extent as if such bonds had been advance refunded pursuant to the provisions of ORS 288.605 to 288.690. [1983 c.347 §5]

288.680 Issuance of refunding bonds with other bonds. Bonds for refunding and bonds for any other purpose or purposes authorized may be issued separately or issued in combination in one or more series or issued by the same issuer. [1977 c.536 §16]

288.685 Rules. The State Treasurer shall adopt such rules as are necessary to carry out the purposes of ORS 288.605 to 288.695, provided that the rules shall as a minimum conform to all applicable laws and regulations thereunder of the United States that pertain to advance refunding. The rules may be changed from time to time as the State Treasurer considers necessary. [1977 c.536 §19]

288.690 Severability. If any provision of ORS 288.605 to 288.695, or its application to any person or circumstances is held invalid, the remainder of ORS 288.605 to 288.695, or the application of the provision to other persons or circumstances is not affected. [1977 c.536 §18]

288.695 Short title. ORS 288.605 to 288.695 may be cited as the Advance Refinancing and Refunding Bond Act of 1977. [1977 c.536 §1]

UNIFORM REVENUE BOND ACT

288.805 Definitions for ORS 288.805 to 288.945. As used in ORS 288.805 to 288.945:

(1) "Credit enhancement device" means a letter of credit, line of credit, municipal bond insurance policy or other device or facility used to enhance the creditworthiness or marketability of municipal bonds.

(2) "Facilities" means real property, including land, streets and other improvements, betterments, appurtenances, structures and fixtures, and personal property which is functionally related and subordinate to real property.

(3) "Municipality" means the political subdivisions in or of this state, municipal, quasi-municipal and public corporations and intergovernmental entities organized under ORS chapter 190. "Municipality" does not include a people’s utility district organized under the authority of ORS chapter 261.

(4) "Private negotiated sale" means the sale of revenue bonds for which the rate or rates and other terms and conditions are negotiated between the public body and the purchaser.

(5) "Public body" means the State of Oregon, its agencies, institutions or any municipality.

(6) "Revenue bonds" means bonds issued for any public purpose, which are secured by revenues either pledged or designated to be payable for such public purpose of the public body and which are sold under the authority granted by ORS 288.805 to 288.945. Nothing in ORS 288.805 to 288.945 is intended to permit a public body to impose fees and charges that are not otherwise authorized by law.

(7) "Revenues" means all fees, tolls, excise taxes, assessments, property taxes and all other taxes of whatever kind or nature, rates, charges, rentals and all other income and receipts of whatever kind or character derived by or to which a public body is entitled from the operation, sale or use of facilities, projects, utilities or systems owned or operated by the public body and other revenues legally available to be pledged to secure the revenue bonds or to be designated as revenues from which the revenue bonds shall be payable. [1983 c.320 §1; 1987 c.354 §1; 1991 c.583 §7; 1991 c.902 §102; 1993 c.97 §13]

288.815 Procedure for municipality to issue revenue bonds. (1) A municipality, upon adoption of a resolution or an ordinance authorizing the issuance of bonds in accordance with subsections (1) to (7) of this section, may issue revenue bonds authorized by ORS 288.805 to 288.945.

(2) The authorizing resolution or ordinance must provide that no bonds may be sold, or in the case of a private negotiated sale, no purchase agreement can be executed, for at least 60 days following publication of the notice required in subsection (6) of this section.

(3) The authorizing resolution or ordinance must provide that electors residing within the municipality may file a petition with the municipality asking to have the question of whether to issue such bonds referred to a vote.

(4) If the municipality receives petitions containing valid signatures of that municipality’s electors totaling not less than five percent of the municipality’s electors, the question of issuing such bonds shall be placed on the ballot at the next legally available election date.

(5) If such a petition is filed with the municipality within 60 days following publication of the notice described in subsection (6) of this section, no bonds may be sold until the resolution or ordinance is approved by a majority of the electors of that jurisdiction voting on the resolution or ordinance.

(6) A notice describing the purposes for which the bonds are sold shall be published by the municipality in at least one newspaper of general circulation within the municipality, and in the same manner as are other public notices of that municipality. Such notice shall contain:

(a) The date the authorizing resolution or ordinance was adopted and the number thereof, if any;

(b) Expected source of revenue for repayment of the revenue bonds;

(c) Estimated principal amount of the bonds to be sold;

(d) The procedures by which the question of issuing the revenue bonds may be referred to a vote;

(e) The time in which the required signatures must be gathered;

(f) Any other information the municipality may wish to include; and

(g) The fact that the authorizing resolution or ordinance is available for inspection at the appropriate office of the municipality.

(7) Nothing in subsections (1) to (7) of this section shall in any way prohibit the municipality on its own initiative from referring the resolution or ordinance authorizing the sale of revenue bonds to a vote of the electors of the municipality.

(8) When the public body issuing revenue bonds is a municipality, the municipality shall issue such bonds in accordance with the provisions of ORS 288.515 to 288.560. [1983 c.320 §§2,7]

288.825 Pledge of revenues; revenue estimates; excluded revenue. (1) A public body either may pledge to the payment of revenue bonds, or may make revenue bonds payable from, all or any portion of:

(a) The revenues of any revenue producing facility providing services related to the services financed by the public bonds;

(b) The revenues of a public utility or system, or an addition or extension to the public utility or system, where the improvements, projects or facilities financed by the revenue bonds are a portion of the public utility or system;

(c) All or any portion of the revenues of the public body; or

(d) Any other legally available moneys.

(2) A public body shall cause to be prepared a plan showing that the estimated net revenues which will be pledged or designated are sufficient to pay the estimated debt incurred under the bond issue.

(3) If the public body determines that it is necessary to provide additional security for revenue bonds, a public body may mortgage, grant security interests in or otherwise encumber facilities, projects, utilities or systems owned or operated by the public body. Such security may be given in favor of the holders of revenue bonds, a trustee therefor or as security for its obligations arising under any credit enhancement device. The public body may obtain a credit enhancement device for revenue bonds provided that such credit enhancement device shall be payable solely from revenues.

(4) When issuing revenue bonds, a public body may exercise any one or more of the following powers:

(a) The governing body, in the ordinance or resolution authorizing the issuance of such bonds, may delegate to any elected or appointed official or employee of the governmental unit the authority to determine the maturity dates, principal amounts, redemption provisions, interest rates or the method for determining a variable or adjustable interest rate, denominations and other terms and conditions of such bonds which are not appropriately determined at the time of enactment of the authorizing ordinance or resolution, which delegated authority shall be exercised subject to the applicable requirements of law and such limitations and criteria as may be set forth in such ordinance or resolution.

(b) The public body may pledge as security for its obligations arising under or with respect to any credit enhancement device any revenues pledged to the payment of the related bonds or designated as revenues from which the bonds shall be payable, and such obligations shall in any event be payable from the same sources from which such bonds are payable.

(c) The public body may enter into agreements with bond trustees and deposit funds with trustees for the benefit of such bondowners.

(d) The public body may establish a debt service reserve for the purpose of paying when due all amounts owing on such bonds, which debt service reserve may be funded out of the proceeds derived from the issuance and sale of such bonds or from such other sources as the governing body of the public body may determine. [1983 c.320 §§3,3a,4; 1991 c.902 §103; 1993 c.97 §14]

288.835 Method of sale; findings. Revenue bonds authorized to be sold as provided for in ORS 288.815 may be sold at public competitive bid or at private negotiated sale, as determined by the public body. However, before a private negotiated sale is authorized, the public body must make specific findings that such a method of sale is desirable. [1983 c.320 §5; 1991 c.902 §104]

288.845 Requirements for private negotiated sale; exceptions. (1) Unless the bonds are to be sold to the federal government or the State of Oregon or to any corporation, department or agency of those governments, a municipality when issuing revenue bonds at a private negotiated sale must retain independent expert advice which shall evaluate:

(a) The terms and conditions of the proposed sale;

(b) The pricing of the proposed sale; and

(c) Any other relevant aspects of the sale.

(2) The evaluation required by subsection (1) of this section shall be made either in writing or, if orally, at a public meeting of the municipality authorizing a private negotiated sale. [1983 c.320 §6; 1995 c.333 §30]

288.855 State authority to issue revenue bonds. The State of Oregon, its institutions and agencies, may issue revenue bonds under the authority of ORS 288.805 to 288.945 to finance revenue producing facilities. Such revenue bonds shall be issued by the State Treasurer under such terms and conditions as the State Treasurer shall determine. [1983 c.320 §8]

288.865 Preliminary official statement; content; availability; waiver; exemption. (1) If revenue bonds are issued by a municipality, the municipality shall prepare and make available to bidders and investors a preliminary official statement that includes the following:

(a) Past and current financing and estimated future financing of the issuer;

(b) Brief description of the financial administration and organization of the issuer;

(c) Brief description of the economic and social characteristics of the issuer;

(d) A detailed description of the project being financed, the sources of revenue to repay the debt and an analysis of the economic feasibility of the project;

(e) Any information the Oregon Municipal Debt Advisory Commission may by rule require; and

(f) Any other information the issuer may provide.

(2) The preliminary official statement described in subsection (1) of this section shall be available not fewer than 10 calendar days preceding the date of the revenue bond sale.

(3) The preliminary official statement described in subsection (1) of this section shall contain the best available information, shall be accurate to the best knowledge of the issuer, and shall be specifically approved by the municipality.

(4) The requirement for the preliminary official statement described in subsections (1) to (3) of this section, at the request of the purchaser, may be waived if the revenue bonds are not being bought with the intent to resell them.

(5) If circumstances warrant, and if the revenue bonds are to be issued at a private negotiated sale, the State Treasurer may on an individual sale basis approve a shorter period than 10 days for the availability of the preliminary official statement required by subsection (2) of this section. [1983 c.320 §9]

288.875 Public competitive bid sales; notice; bid requirements. (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.

(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, which may be in the form of a certified or cashier’s check on 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.

(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 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. [1983 c.320 §10; 1997 c.631 §441; 1999 c.559 §17]

288.885 Public competitive bid sale by municipality; notice of sale. 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:

(1) The issuer shall cause the notice of bond sale, or a summary thereof, to be published as provided in subsection (2) of this section not fewer than 10 calendar days prior to the date of the bond sale.

(2) The issuer shall publish the notice of bond sale, or a summary of the notice of bond sale, by one or more of the following methods:

(a) Publication in a newspaper of general circulation within the boundaries of the issuer;

(b) Publication in a newspaper of general circulation in Portland, Oregon;

(c) Publication in a national newspaper;

(d) Electronic publication on the Internet; or

(e) Electronic publication in another form that is reasonably calculated to reach potential bidders effectively.

(3) If a summary of the notice of bond sale is published under this section, the summary must specify where the complete notice of bond sale is published or available.

(4) Copies of the complete notice of bond sale shall be furnished upon request to bidders, investors and the public. [1983 c.320 §11; 1991 c.143 §2; 1991 c.902 §105; 1999 c.559 §18; 2001 c.537 §4]

288.895 Competitive bid process by state. For the state, a competitive bid process shall be conducted in the manner prescribed by the State Treasurer, which may include, but is not limited to, notifying potential purchasers, conducting sales, accepting and awarding bids by written, telephonic, facsimile, electronic or any other means of communication and offering for sale and accepting bids on any combination of bonds or on an all or none basis. [1983 c.320 §12; 1999 c.44 §19]

288.905 [1983 c.320 §13; 1995 c.333 §31; repealed by 2001 c.537 §6]

288.915 Award on competitive bid. (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. [1983 c.320 §§14,15; 1995 c.333 §32; 1999 c.559 §19]

288.925 Form of revenue bonds. The revenue bonds issued under the authority of ORS 288.805 to 288.945 shall:

(1) Contain a statement that such bonds are payable solely out of pledged revenues, or out of revenues designated as revenues from which the bonds shall be payable, of the public body and are not general obligations of the public body;

(2) Be in such denominations of $5,000 or multiples thereof, as the public body determines; and

(3) Be payable at the place designated by the public body. [1983 c.320 §16; 1993 c.97 §15]

288.935 Other authority of municipality. The powers conveyed by ORS 288.805 to 288.945 are in addition to any other powers possessed by municipalities and shall not be deemed to limit such powers. [1983 c.320 §17]

288.945 Short title. ORS 288.805 to 288.945 may be cited as the Uniform Revenue Bond Act. [1983 c.320 §18]

MISCELLANEOUS PROVISIONS

288.950 Compliance with debt limit; effect of bond interest on value. 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. [1999 c.559 §7]

288.990 [Formerly 287.990; repealed by 1959 c.213 §3]

288.991 [1959 c.410 §7; repealed by 1971 c.743 §432]