ORS Chapter 287a
Chapter 287A — LocalGovernment Borrowing
2009 EDITION
LOCALGOVERNMENT BORROWING
PUBLICBORROWING
DEFINITIONS
287A.001 Definitionsfor ORS chapter 287A
AUTHORITYFOR BORROWING
287A.010 Powersconveyed to public bodies
(GeneralObligation Bonds)
287A.050 Authorityof city to issue general obligation bonds
287A.100 Authorityof county to issue general obligation bonds
287A.105 Limitationon bonded indebtedness of county
287A.140 Advalorem tax levy to pay general obligation bonds
287A.145 Misspentproceeds of general obligation bonds
(RevenueBonds)
287A.150 Authorityof public body to issue revenue bonds
287A.180 Short-termborrowing by public body
(DebtLimits)
287A.195 Compliancewith constitutional or statutory debt limits
ADMINISTRATIONOF BONDS
287A.300 Termsand conditions of bond sales; delegation of authority
287A.310 Definitionsfor ORS 287A.310 and 287A.315; lien of a pledge; Uniform Commercial Code
287A.315 Pledgeof full faith and credit and taxing power
287A.325 Covenantsof public bodies regarding pledges
287A.335 Agreementsfor exchange of interest rates; rules
287A.339 Terminationpayment of conduit borrower
287A.340 Creditenhancement devices
287A.343 Publicbody purchase of own bonds
287A.345 Statetaxation of bond interest
287A.350 Publicrecords
REFUNDINGBONDS
287A.360 Currentrefunding bonds
287A.365 Advancerefunding bonds and forward current refunding
287A.370 Proposedrefunding plan for advance refunding bonds or forward current refunding; rules;fees
287A.375 Maximumamount of advance refunding bonds
287A.380 Taxlevy to pay maturing general obligation advance refunding bonds
WARRANTSAND CHECKS; INTEREST; UNCLAIMED WARRANTS AND CHECKS; MASTER WARRANTS
287A.472 Intereston municipal warrants not paid on presentation
287A.474 Warrantsand checks more than two years old; report by fiscal officer; claim by owner
287A.482 Definitionsfor ORS 287A.482 to 287A.488
287A.484 Masterwarrant procedure authorized if warrants would be not paid
287A.486 Procedure
287A.488 Taxesmust be levied for payment of claims included in master warrant
OREGONMUNICIPAL DEBT ADVISORY COMMISSION
287A.630 OregonMunicipal Debt Advisory Commission; creation; term; compensation
287A.632 Meetings;quorum; personnel
287A.634 Powersand duties of commission; rules; fees
287A.640 Noticeto commission of proposed issues; duty of public bodies to assist; rules
DEFINITIONS
287A.001Definitions for ORS chapter 287A. As used in this chapter:
(1)“Advance refunding bond” means a bond all or part of the proceeds of which areto be used to pay an outstanding bond one year or more after the advancerefunding bond is issued.
(2)“Agreement for exchange of interest rates” means a contract, or an option orforward commitment to enter into a contract, for an exchange of interest ratesfor related bonds that provides for:
(a)Payments based on levels or changes in interest rates; or
(b)Provisions to hedge payment, rate, spread or similar exposure including, butnot limited to, an interest rate floor or cap or an option, put or call.
(3)“Bond”:
(a)Means a contractual undertaking or instrument of a public body to repayborrowed moneys.
(b)Does not mean a credit enhancement device.
(4)“Capital construction” has the meaning given that term in ORS 310.140.
(5)“Capital improvements” has the meaning given that term in ORS 310.140.
(6)“Credit enhancement device”:
(a)Means a letter of credit, line of credit, standby bond purchase agreement, bondinsurance policy, reserve surety bond or other device or facility used toenhance the creditworthiness, liquidity or marketability of bonds or agreementsfor exchange of interest rates.
(b)Does not mean a bond.
(7)“Current refunding bond” means a bond the proceeds of which are to be used topay or purchase an outstanding bond less than one year after the currentrefunding bond is issued.
(8)“Forward current refunding” means execution and delivery of a purchaseagreement or similar instrument under which a public body contracts to sell currentrefunding bonds for delivery at a future date that is one year or more afterexecution of the purchase agreement or similar instrument.
(9)“General obligation bond” means exempt bonded indebtedness, as defined in ORS310.140, that is secured by a commitment to levy ad valorem taxes outside thelimits of sections 11 and 11b, Article XI of the Oregon Constitution.
(10)“Lawfully available funds” means revenues or other moneys of a public bodyincluding, but not limited to, moneys credited to the general fund of thepublic body, revenues from an ad valorem tax and revenues derived from othertaxes levied by the public body that are not dedicated, restricted or obligatedby law or contract to an inconsistent expenditure or use.
(11)“Operative document” means a bond declaration, trust agreement, indenture,security agreement or other document in which a public body pledges revenue orproperty as security for a bond.
(12)“Pledge” means:
(a)To create a lien on property pursuant to ORS 287A.310.
(b)A lien created on property pursuant to ORS 287A.310.
(13)“Public body” means:
(a)A county of this state;
(b)A city of this state;
(c)A local service district as defined in ORS 174.116 (2);
(d)A special government body as defined in ORS 174.117;
(e)Oregon Health and Science University; or
(f)Any other political subdivision of this state that is authorized by theLegislative Assembly to issue bonds.
(14)“Refunding bond” means an advance refunding bond, a current refunding bond or aforward current refunding bond.
(15)“Related bond” means a bond for which the public body enters into an agreementfor exchange of interest rates or obtains a credit enhancement device.
(16)“Revenue” means all fees, tolls, excise taxes, assessments, property taxes andother taxes, rates, charges, rentals and other income or receipts derived by apublic body or to which a public body is entitled.
(17)“Revenue bond” means a bond that is not a general obligation bond.
(18)“Termination payment” means the amount payable under an agreement for exchangeof interest rates by one party to another party as a result of the termination,in whole or part, of the agreement prior to the expiration of the stated term. [2007c.783 §42; 2009 c.537 §9]
AUTHORITYFOR BORROWING
287A.010Powers conveyed to public bodies. The powers conveyed to public bodies byORS 287A.001 to 287A.380 are in addition to any other powers possessed bypublic bodies and do not limit those other powers. [2007 c.783 §68]
(GeneralObligation Bonds)
287A.050Authority of city to issue general obligation bonds. (1) A city mayissue general obligation bonds to finance capital construction or capitalimprovements upon approval of the electors of the city.
(2)Unless the city charter provides a lesser limitation, a city may not issue orhave outstanding at the time of issuance general obligation bonds in aprincipal amount that exceeds three percent of the real market value of thetaxable property within its boundaries, calculated as provided in ORS 308.207.
(3)The limitation described in subsection (2) of this section does not apply togeneral obligation bonds issued to finance the costs of local improvementsassessed and paid for in installments under statutory or charter authority orto finance capital construction or capital improvements for:
(a)Water supply, treatment or distribution;
(b)Sanitary or storm sewage collection or treatment;
(c)Hospitals or infirmaries;
(d)Gas, power or lighting; or
(e)Off-street motor vehicle parking facilities. [2007 c.783 §43]
287A.100Authority of county to issue general obligation bonds. (1) Unless thecounty charter expressly provides otherwise, a county may issue generalobligation bonds to finance capital construction or capital improvements uponapproval of the electors of the county.
(2)Unless the county charter provides a lesser limitation, a county may not issueor have outstanding at the time of issuance general obligation bonds in aprincipal amount that exceeds two percent of the real market value of thetaxable property in the county, calculated as provided in ORS 308.207. [2007c.783 §44]
287A.105Limitation on bonded indebtedness of county. (1) A county may incur bondedindebtedness within the meaning of section 10, Article XI of the Oregon Constitution,by issuing revenue bonds when a county is expressly authorized to issue revenuebonds by a law other than this section. The amount of revenue bonds permittedby this section may not exceed the lesser of:
(a)One percent of the real market value of all taxable property in the county,calculated as provided in ORS 308.207; or
(b)A limitation on bonded indebtedness in the county charter.
(2)The limitation on bonded indebtedness in subsection (1) of this section doesnot apply to revenue bonds issued to finance pension liabilities under ORS238.692 to 238.698 or any other law in effect prior to enactment of ORS 238.692to 238.698. [2007 c.783 §45]
287A.140Ad valorem tax levy to pay general obligation bonds. (1) In additionto other taxes imposed, a public body shall levy annually an ad valoremproperty tax on the taxable property within the boundaries of the public bodyin an amount that is sufficient, when added to other amounts available, to paythe principal of and interest on outstanding general obligation bonds issued bythe public body.
(2)A public body may:
(a)Use the revenues collected under this section and earnings on the revenues onlyto pay the principal of and interest on general obligation bonds.
(b)Not use or divert taxes levied under subsection (1) of this section for anotherpurpose while principal or interest remains unpaid on the bonds.
(c)If a surplus amount remains after the principal of and interest on an issue ofgeneral obligation bonds have been paid and the public body does not have otherexpenses related to the bonds, transfer the surplus moneys to a fund designatedby the governing body of the public body. [2007 c.783 §67]
287A.145Misspent proceeds of general obligation bonds. (1) If a courtof competent jurisdiction determines that the proceeds of an issue of generalobligation bonds have been used by a public body for expenditures that are notcapital construction or capital improvements, the court may order the publicbody to:
(a)Replace the misspent proceeds with interest, on a reasonable scheduledetermined by the court, from moneys other than the tax revenues that thepublic body levies to pay the debt service; and
(b)Use the replaced moneys for capital construction or capital improvementexpenditures or to pay the debt service.
(2)If the public body fails to comply with an order to replace the misspentproceeds or acknowledges that the public body is unable to replace the misspentproceeds, the court may determine that a portion of the future levies to paythe debt service is subject to the limits of sections 11 and 11b, Article XI ofthe Oregon Constitution, by calculating the amount of the tax revenues that arenecessary to pay the principal and interest on the bonds that is allocable tothe misspent proceeds.
(3)An action may not be filed or maintained against a public body because of analleged expenditure of the bond proceeds of general obligation bonds forpurposes other than capital construction or capital improvements, if themisspent moneys are less than $5,000. [2007 c.783 §66]
287A.150Authority of public body to issue revenue bonds. (1) In additionto any other authority to issue revenue bonds, a public body may authorizerevenue bonds by resolution or nonemergency ordinance pursuant to this sectionfor a public purpose.
(2)If revenue bonds are authorized by nonemergency ordinance, a public body maynot sell the revenue bonds pursuant to this section until the period forreferral of the ordinance has expired. If electors of a public body refer anonemergency ordinance authorizing issuance of revenue bonds, the public bodymay not sell the revenue bonds unless the electors approve issuance of therevenue bonds.
(3)If revenue bonds are authorized by resolution:
(a)A public body may not sell the revenue bonds until at least 60 days followingpublication of the notice required in subsection (4) of this section.
(b)The resolution must provide that electors residing within the public body mayfile a petition with the public body asking the public body to refer thequestion of whether to issue the revenue bonds to a vote. If within 60 daysafter the publication of the notice described in subsection (4) of thissection, electors file petitions with the public body containing valid signaturesof at least five percent of the public body’s electors, the public body:
(A)Shall place the question of issuing the revenue bonds on the ballot at the nextlawfully available election date; and
(B)May not sell the revenue bonds described in the notice unless a majority of theelectors voting on the question of issuing the revenue bonds approve.
(4)A public body authorizing revenue bonds by resolution shall publish a noticedescribing the purposes for which the revenue bonds will be sold in at leastone newspaper of general circulation within the boundaries of the public bodyin the same manner as other public notices of the public body. At a minimum,the notice must contain:
(a)The date the resolution was adopted and the number thereof, if any;
(b)The expected source of revenue for repayment of the revenue bonds;
(c)The estimated principal amount of the revenue bonds to be sold;
(d)The procedures by which electors may cause the question of issuing the revenuebonds to be referred to a vote;
(e)The period within which electors must file signed petitions to cause referral;and
(f)The fact that the resolution is available for inspection at the appropriateoffice of the public body.
(5)If revenue bonds are authorized by nonemergency ordinance under subsection (2)of this section, the revenue bonds may be secured by the revenues or otherproperty of the public body that is described in the nonemergency ordinance. Ifrevenue bonds are authorized by resolution under subsection (3) of this section,the revenue bonds may be secured by the revenues or other property of thepublic body that is described in the notice required under subsection (4) ofthis section.
(6)A public body may issue refunding bonds under ORS 287A.360 to 287A.380 to payrevenue bonds that were authorized by this section. The procedures andlimitations of subsections (1) to (5) of this section do not apply to refundingbonds. [2007 c.783 §46]
287A.180Short-term borrowing by public body. (1) In addition to any other authorityto issue revenue bonds, but subject to applicable limitations imposed by theOregon Constitution or the charter or ordinance of the public body, a publicbody may issue revenue bonds pursuant to this section:
(a)In anticipation of tax revenues or other moneys;
(b)To provide interim financing for capital projects to be undertaken by thepublic body; or
(c)To refund revenue bonds issued pursuant to this section.
(2)To secure revenue bonds authorized under this section, a public body may:
(a)Pledge all or part of the revenues of the public body that may lawfully be usedto secure payment of the revenue bonds.
(b)Obtain credit enhancement devices for the revenue bonds authorized by thissection.