1. (1) The State Treasurer, at the request of the Director of the Oregon Department of Administrative Services, may issue lottery bonds from time to time to finance any lottery bond program and to pay costs of issuing lottery bonds and administering the lottery bond program, and the State Treasury may be paid for all bond-related costs the State Treasury incurs.
2. (2) Lottery bond proceeds and unobligated net lottery proceeds may be used to pay bond-related costs.

3. (3) In addition to lottery bonds for any lottery bond program, the State Treasurer may, at the request of the affected agency or the Oregon Department of Administrative Services, issue one or more series of refunding lottery bonds. The refunding lottery bonds shall be structured so that the amount required to pay those bonds in each year does not exceed the amount of unobligated net lottery proceeds that could have been committed to pay the lottery bonds that are refunded. Refunding lottery bonds shall be issued in such amount as the State Treasurer determines is necessary or appropriate in order to:

   1. (a) Pay or defease the principal of and the interest and redemption premium, if any, on the bonds to be refunded; and
   2. (b) Pay any bond-related costs related to the refunding lottery bonds.

4. (4) All lottery bonds issued under this section shall be payable from:

   1. (a) The amount pledged for payment under subsection (7) of this section; and
   2. (b) Any appropriated funds.
5. (5) The lottery bonds shall not be general obligations of this state and shall not be secured by or payable from any funds or assets of this state other than the amounts pledged for payment or security and any appropriated funds. The Legislative Assembly shall not be under any legal compulsion or obligation to provide any appropriated funds and shall not be liable to any party for any failure to provide appropriated funds. All lottery bonds issued under ORS 286A.560 to 286A.585 shall contain a statement that this state is not obligated to pay lottery bond principal, interest or premium thereon from any source other than the amounts pledged for payment and any appropriated funds, and that the full faith and credit or the taxing power of the State of Oregon are not pledged to the payment of lottery bond principal, interest or premium.
6. (6) The State Treasurer may establish reserves for lottery bonds. The reserves may be in the form of cash, investments, surety bonds, municipal bond insurance, lines of credit, letters of credit or other similar instruments. The State Treasurer, on behalf of the State of Oregon, may covenant to maintain the reserves at particular levels, but solely from the amounts that may be pledged to pay lottery bonds under subsection (7) of this section. If the reserves are drawn down below the level that this state has covenanted to maintain, the Director of the Oregon Department of Administrative Services shall promptly certify to the Legislative Assembly or, if the Legislative Assembly is not then in session, to the Emergency Board, the amount needed to restore the reserves to their required level. The Legislative Assembly or the Emergency Board may provide appropriated funds in the amount certified by the Director of the Oregon Department of Administrative Services. Any appropriated funds so provided shall be used immediately to restore the balance in the reserves established for the lottery bonds. The State of Oregon may enter into covenants with the owners of the lottery bonds that specify the timing and content of the director’s certification. By enacting this subsection, the Legislative Assembly acknowledges its current intention to provide appropriated funds in the amount certified by the director under this subsection. However, the Legislative Assembly or the Emergency Board shall not have any legal obligation to provide any appropriated funds.
7. (7) Notwithstanding any other provision of law, the State Treasurer may pledge all or any portion of the unobligated net lottery proceeds, amounts in the Lottery Bond Fund and any unexpended lottery bond proceeds to pay lottery bonds and to pay amounts due in connection with any credit enhancement or any instrument authorized by subsection (6) of this section. The lien of such pledge shall be valid and binding immediately upon delivery by the state of the lottery bonds, credit enhancement agreement or instrument secured by the pledge. The amounts so pledged shall be immediately subject to the lien of the pledge upon receipt of the amounts by this state regardless of when or whether they are allocated or transferred to the Lottery Bond Fund or the Lottery Bond Administrative Fund and regardless of whether there was physical delivery, filing or other act. Except to the extent provided in the pledge, the lien of the pledge shall be superior to all other claims, liens and appropriations of any kind. The State Treasurer may provide that lottery bonds may be issued in different series and that each series may be secured by a lien on, and pledge of, the unobligated net lottery proceeds that is superior to, subordinate to, or on a parity with, the lien of the pledge securing other series of lottery bonds. Nothing in this section shall be construed to limit the powers granted in any other part of ORS 286A.560 to 286A.585.

8. (8) Any covenants made under this section for the benefit of owners of lottery bonds shall constitute contracts between the State of Oregon and the owners of lottery bonds. The State Treasurer, or the Director of the Oregon Department of Administrative Services with the consent of the State Treasurer, may, on behalf of the State of Oregon and in addition to the covenants authorized by subsection (6) of this section, make the following covenants for the benefit of the owners of lottery bonds and any providers of credit enhancement or instruments authorized by subsection (6) of this section:

   1. (a) Except as permitted by a pledge made under subsection (7) of this section, this state shall not create any lien or encumbrance on the unobligated net lottery proceeds that is superior to the liens of the pledges authorized by subsection (7) of this section.

   2. (b) Subject only to the availability of unobligated net lottery proceeds, the State of Oregon shall budget and appropriate in each fiscal year an amount of unobligated net lottery proceeds that, when added to other funds lawfully budgeted and appropriated and available for the purpose, will be sufficient:

      1. (A) To pay in full the principal, interest and premium due and to become due on all outstanding lottery bonds in the fiscal year;
      2. (B) To maintain the required balance in any reserves established for lottery bonds; and
      3. (C) To pay amounts due to the providers of credit enhancement for lottery bonds or instruments authorized by subsection (6) of this section.
   3. (c) This state shall apply the unobligated net lottery proceeds and any other amounts so budgeted and appropriated for those purposes.
   4. (d) This state shall continue to operate the Oregon State Lottery until all lottery bonds are paid or defeased.
9. (9) In connection with the issuance of any lottery bonds, the State Treasurer may establish such accounts and subaccounts within the Lottery Bond Fund that the State Treasurer determines are necessary or appropriate. In addition, the State Treasurer or the Director of the Oregon Department of Administrative Services may, on behalf of this state, enter into any agreements that the State Treasurer determines are necessary or appropriate to issue lottery bonds and carry out the provisions of ORS 286A.560 to 286A.585 and all legislation authorizing lottery bond programs.
10. (10) If the State Treasurer determines that the acquisition is cost-effective, the State Treasurer may acquire a municipal bond insurance policy, letter of credit, line of credit, surety bond or other credit enhancement device for lottery bonds, and may enter into any related agreements.
11. (11) The State Treasurer may provide that all or any portion of the Lottery Bond Fund, the Lottery Bond Administrative Fund or any accounts in either fund shall be held by a trustee, may enter into agreements with the trustee regarding the use and application of the amounts held in those funds and accounts and may transfer amounts credited to those funds and accounts to the trustee.

[Formerly 286.580]