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HB3231,1220,F,JOINT OKLAHOMA HOUSE OF REPRESENTATIVES COMMITTEE REPORT 5/24/2016 7:20:08 PM JOINT COMMITTEE ON APPROPRIATIONS AND BUDGET HB3231 By: Sears et al of the House Jolley et al of the Senate Title: Public finance; Oklahoma Public Finance Act of 2016; effective date; emergency. Coauthored By: Recommendation: DO PASS AS AMENDED BY CS Amendments: 1. Committee Substitute Attached ______________________________________ Chr. Representative Earl Sears YEAS: 17 Billy, Casey, Coody (A), Cox, Johnson, Martin, McCall, McCullough, Nelson, Ortega, Osborn, Ownbey, Peterson, Russ, Sanders, Sears, Wright NAYS: 7 Brown, Hoskin, Inman, Morrissette, Rousselot, Sherrer, Wesselhoft CONSTITUTIONAL PRIVILEGE: 0 O K L A H O M A S T A T E S E N A T E JOINT COMMITTEE REPORT May 24, 2016 JOINT COMMITTEE ON APPROPRIATIONS AND BUDGET HB 3231 By: Sears of the House and Jolley and Treat of the Senate Title: Public finance; Oklahoma Public Finance Act of 2016; effective date; emergency. Recommendation: DO PASS AS AMENDED Aye: Allen, Barrington, Bice, Boggs, Crain, David, Fields, Ford, Fry, Griffin, Halligan, Holt, Jech, Justice, Loveless, Quinn, Sharp, Simpson, Standridge, Stanislawski, Thompson, Yen, Treat, Jolley Nay: Anderson, Brecheen, Brooks, Brown, Dahm, Dossett, Floyd, Mazzei, Newberry, Paddack, Shaw, Silk, Smalley, Sparks Pass: Senator Clark Jolley, Chair Committee Substitute, motion by Senator JOLLEY - Adopted (Request No: 10126) 1 STATE OF OKLAHOMA 2 2nd Session of the 55th Legislature (2016) 3 COMMITTEE SUBSTITUTE FOR 4 HOUSE BILL NO. 3231 By: Sears and Casey of the House 5 and 6 Jolley and Treat of the 7 Senate 8 9 10 COMMITTEE SUBSTITUTE 11 An Act relating to transportation finance; authorizing issuance of certain obligations by the 12 Oklahoma Capitol Improvement Authority; stating amount of net proceeds; imposing certain restrictions 13 related to timing of issuance; providing for use of net proceeds; specifying authorized use of proceeds; 14 incorporating content of Department of Transportation Construction Work Plan by reference; providing for 15 priority of expenditures; providing for disposition of earnings; authorizing agreements between the 16 Oklahoma Capitol Improvement Authority and the Department of Transportation; specifying content of 17 agreements; providing for effect of redemption; authorizing borrowing of monies and issuance of 18 negotiable obligations; stating legislative intent with respect to appropriations to the Department of 19 Transportation; authorizing payment of certain fees and costs; authorizing issuance in series; requiring 20 repayment from certain revenue sources; providing obligations not general obligations of the State of 21 Oklahoma; providing full faith and credit not pledged to repayment; prescribing procedures for sale of 22 obligations; authorizing liquidity agreements; providing for disposition of interest earnings; 23 providing exemption from taxation; providing for investment of proceeds; providing for applicability 24 of certain statutory provisions; authorizing Oklahoma Req. No. 10126 Page 1 1 Capitol Improvement Authority to initiate certain judicial proceedings; providing for codification; 2 providing an effective date; and declaring an emergency. 3 4 5 BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA: 6 SECTION 1. NEW LAW A new section of law to be codified 7 in the Oklahoma Statutes as Section 342 of Title 73, unless there is 8 created a duplication in numbering, reads as follows: 9 A. Subject to the limitations with respect to the authorized 10 date of issuance provided by this subsection, the Oklahoma Capitol 11 Improvement Authority is authorized to issue notes, bonds or other 12 evidences of obligation in an amount necessary to generate net 13 proceeds of Two Hundred Million Dollars ($200,000,000.00), no 14 earlier than July 1, 2016, after providing for costs of issuance, 15 credit enhancement, reserves and other associated expenses related 16 to the financing. 17 B. Net proceeds of the financing will be deposited into a 18 construction fund to provide for the financing of acquisition of 19 real property, together with improvements located thereon, and 20 personal property, to construct, maintain and improve those state 21 highway and state bridge assets identified in the Oklahoma 22 Transportation Commission Construction Work Plan for the federal 23 fiscal years 2016 through 2023 (FFY-2016 through FFY-2023) as 24 Req. No. 10126 Page 2 1 specifically identified in the Appendix of this act and which is 2 incorporated by reference as if fully set out herein. 3 C. The Transportation Commission or the Department of 4 Transportation shall use the proceeds identified in subsection B of 5 this section according to the priority of the enumerated project as 6 it appears for the applicable federal fiscal year in the 7 Construction Work Plan described in subsection B of this section in 8 order to facilitate the completion of the enumerated projects, 9 giving consideration to the ability to match federal funding and 10 such other factors as the Transportation Commission or the 11 Department of Transportation shall deem fiscally prudent. 12 D. Earnings that result from the investment of the construction 13 fund may be used for the projects authorized in this section or for 14 other legal purposes approved by the Authority. 15 E. The Authority and the Transportation Commission and the 16 Department of Transportation are authorized to enter into such 17 agreements as may be necessary to authorize the Authority to hold 18 title to the real and personal property and improvements until such 19 time as any obligations issued for the purpose set forth in 20 subsection B of this section are retired or defeased and the 21 Authority may lease the real property and improvements to the 22 Transportation Commission or the Department of Transportation for 23 the purposes authorized by this section. Upon final redemption or 24 defeasance of the obligations created pursuant to this section, Req. No. 10126 Page 3 1 title to the real and personal property and improvements shall be 2 transferred from the Oklahoma Capitol Improvement Authority to the 3 Transportation Commission or the Department of Transportation. 4 F. For the purpose of paying the costs for acquisition and 5 construction of the real property and improvements and personal 6 property and making the repairs, refurbishments and improvements to 7 real and personal property, and providing funding for the project 8 authorized in this section, and for the purpose authorized in 9 subsection H of this section, the Authority is hereby authorized to 10 borrow monies on the credit of the income and revenues to be derived 11 from the leasing of such real and personal property and improvements 12 and, in anticipation of the collection of such income and revenues, 13 to issue negotiable obligations in one or more series. 14 G. It is the intent of the Legislature to appropriate to the 15 Department of Transportation sufficient monies to make rental 16 payments for the purposes of retiring the obligations created 17 pursuant to this section. 18 H. To the extent funds are available from the proceeds of the 19 borrowing authorized by subsection A of this section, the Oklahoma 20 Capitol Improvement Authority shall provide for the payment of 21 professional fees and associated costs related to the projects 22 authorized in this section. 23 I. The Authority may issue obligations in one or more series 24 and in conjunction with other issues of the Authority. The Req. No. 10126 Page 4 1 Authority is authorized to hire bond counsel, financial consultants 2 and such other professionals as it may deem necessary to provide for 3 the efficient sale of the obligations and may utilize a portion of 4 the proceeds of any borrowing to create such reserves as may be 5 deemed necessary and to pay costs associated with the issuance and 6 administration of such obligations. 7 J. The bond indenture or other instrument pursuant to which the 8 Oklahoma Capitol Improvement Authority becomes obligated for the 9 repayment of principal and interest of the proceeds from the sale of 10 obligations authorized in subsection A of this section shall provide 11 that all obligations are to be repaid from the source of revenue 12 specified in this section. 13 K. The bonds or other obligations issued pursuant to this 14 section shall not at any time be deemed to constitute a debt of the 15 state or of any political subdivision thereof or a pledge of the 16 faith and credit of the state or of any such political subdivision. 17 L. Such bonds or other obligations shall contain on the face 18 thereof a statement that neither the faith and credit nor the taxing 19 power of the state or any political subdivision thereof is pledged, 20 or may hereafter be pledged, to the payment of the principal of or 21 the interest on such bonds. 22 M. The obligations authorized under this section may be sold at 23 either competitive or negotiated sale, as determined by the 24 Authority, and in such form and at such prices as may be authorized Req. No. 10126 Page 5 1 by the Authority. The Authority may enter into agreements with such 2 credit enhancers and liquidity providers as may be determined 3 necessary to efficiently market the obligations. The obligations 4 may mature and have such provisions for redemption as shall be 5 determined by the Authority, but in no event shall the final 6 maturity of such obligations occur later than fifteen (15) years 7 from the first principal maturity date. 8 N. Any interest earnings on funds or accounts created for the 9 purposes of this section may be utilized as partial payment of the 10 annual debt service or for the purposes directed by the Authority. 11 O. The obligations issued under this section, the transfer 12 thereof and the interest earned on such obligations, including any 13 profit derived from the sale thereof, shall not be subject to 14 taxation of any kind by the State of Oklahoma, or by any county, 15 municipality or political subdivision therein.