Department of Administrative Services
Chief Financial Office - Chapter 122
Division 70
STATE OF OREGON FINANCING AGREEMENTS
122-070-0140
Records Creation and Maintenance, and Ongoing Use of Financed Assets
(1) In conjunction with the execution of a Financing Agreement, the Benefiting Agency must enter into a written agreement with the Director outlining the Benefiting Agency’s responsibilities related to asset maintenance, recordkeeping and debt repayment. The agreement must include, without limitation, the following terms:
(a) Identification of the source of funds the Benefiting Agency intends to use to repay the Financing Agreement;
(b) A commitment by the Benefiting Agency:
(A) To use its best efforts to seek funds and budget authority each biennium to repay the Financing Agreement so long as it is outstanding;
(B) To inform the Finance Manager in the event available funds expected to be used to repay any Financing Agreement are not appropriated;
(C) That the financed property will be used only by state government and only for authorized government purposes, unless the Benefiting Agency first obtains written consent from the Finance Manager; and
(D) To not to lease, sublease, sell or otherwise encumber any financed property without prior written consent from the Finance Manager.
(2) A Benefiting Agency may not permit the property to be used by anyone except state government for authorized government purposes, lease, sublease, sell or otherwise encumber any property, unless it first obtains written consent from the Finance Manager.
(3) Prior to software or property acquisition or development of capital assets, each Benefiting Agency will certify that all software, property or capital assets paid for through a Financing Agreement are essential to providing the governmental functions that the Benefiting Agency performs and that the property is free and clear of all liens and encumbrances.
(4) Benefiting Agencies must cooperate with the Department and the State Treasurer in their efforts to comply with provisions of the Internal Revenue Code and regulations related to Tax-advantaged Financing Agreements.
(5) Benefiting Agencies must:
(a) Record the appropriate accounting entries for all Financing Agreements related to their project(s) in accordance with generally accepted accounting principles and the State Accounting Manual;
(b) Maintain all records related to asset acquisition or development through a Financing Agreement, and ongoing use of the asset in compliance with state law and provisions of the Internal Revenue Code;
(c) Prepare and file Form 1099 and other tax documents required as a result of payment to vendors or contractors for asset acquisition or development; and
(d) File all forms and take any other required action related to tax matters, including those to ensure ongoing compliance with the Internal Revenue Code, as requested by the Finance Manager for Financing Agreements that are Tax-advantaged borrowings. Costs incurred by the Department related to tax compliance, including but not limited to the fees of bond counsel, financial advisors, Department of Justice counsel, or other experts, will be the responsibility of the Benefiting Agency.
(6) The Department and Benefiting Agency will retain records related to Financing Agreements and projects financed for three (3) years beyond the scheduled final maturity date. The Benefiting Agency must respond promptly to any requests for information from the Department related to a Financing Agreement.
(7) The Department will:
(a) Assist any Benefiting Agency in developing debt service budgets for its outstanding Financing Agreements;
(b) Bill and collect from all Benefiting Agencies their respective portion of debt service relative to each Benefiting Agency’s outstanding Certificates of Participation and, if not paid directly by the Benefiting Agency, other Financing Agreements;
(c) Send moneys that are collected from Benefiting Agencies to a trustee for payments due under the Certificates of Participation, or any moneys so collected for other applicable Financing Agreements related to such Benefiting Agencies;
(d) At the direction of the State Treasurer, manage the investments of all Certificates of Participation sale proceeds or debt service funds that are held by a trustee. At the end of each debt service cycle, the earnings from any investment of moneys by a trustee may be credited to the appropriate Benefiting Agency or may be credited against the interest due on outstanding certificates at the next payment date, at the discretion of the Department. When allocating such interest earnings, the Department may take any actions necessary to achieve cost-effective administration, provided such actions do not have a materially adverse impact on any outstanding certificates or the funds or accounts used to pay them; and
(e) After the Certificates of Participation, or other Financing Agreements, for which moneys held by a trustee are completely paid and no longer outstanding, provide to the appropriate Benefiting Agency any remaining moneys, together with interest earnings to be recorded under generally accepted accounting principles.
Statutory/Other Authority: ORS 184.340
Statutes/Other Implemented: ORS 283.085 - 283.092
History:
BMD 1-2012, f. 1-26-12, cert. ef. 2-1-12