WASHINGTON — The Oregon Senate is considering legislation that would allow a state authority to issue bonds for projects reaching beyond the Beaver State's borders.
Oregon House Bill 2492-A, which passed the House last month and is now awaiting action by a Senate committee, would give the Oregon Facilities Authority the power to issue revenue bonds for projects both within and outside of Oregon.
The 26 year-old OFA works with the State Treasurer's office to finance projects for nonprofits that provide healthcare, housing, education, and cultural benefits to Oregonians. The conduit issuer has issued over $3.2 billion in tax-exempt revenue bonds over its history.
In written testimony presented to the Senate Finance and Revenue Committee, OFA executive director Gwendolyn Griffith urged passage of the bill, which was introduced at the request of Treasurer Ted Wheeler.
Griffith pointed out that as a conduit issuer OFA bonds are not obligations of nor guaranteed by Oregon tax dollars, but are rather backed by fees charged to borrowers in the program.
"Allowing multiple state projects to be financed in a single transaction can significantly lower the cost of financing for nonprofits (such as hospitals and retirement communities) that have facilities in both Oregon and in other states," Griffith wrote.
"Multiple-state issuance is a trend we are seeing in other states," she wrote
Multi-state conduit issuers have emerged in recent years.
The Wisconsin-based Public Finance Authority has been executing deals across state lines since 2010 and is authorized by Wisconsin law to issue bonds in all 50 states.
This year, the Wyoming Infrastructure Authority pursued and won legislative authorization to issue bonds in support of out-of-state projects that would benefit Wyoming's energy industry.
Oregon's proposal is less far-reaching.
Only nonprofits with operations or facilities in Oregon could benefit from the bill.
The bill would also help strengthen OFA's Small Nonprofit Accelerated Program or "SNAP" bond program for smaller nonprofits, Griffith wrote.
"Oregon nonprofits typically use this program to acquire buildings to be used in providing valuable services to Oregonians," she wrote.
"The average size of a SNAP Bond is $2.3 million," Griffith wrote. "Yet the services provided by OFA to the smaller nonprofits would not be possible without the fees paid by the larger borrowers in OFA's traditional bond program. HB 2492-A will help secure that source of funding so that SNAP Bond borrowers can continue to access the tax-exempt bond market at a reasonable cost."
Beaverton Democrat Mark Hass chairs the Senate committee considering the bill.
It is unclear when the bill might get a committee vote, but a spokesman for Wheeler said the treasurer's office is working to get the bill moving.
The state legislature is expected to adjourn either late this month or in early July, and if the bill is not passed by then it will die.
If HB492-A becomes law, the state personal income tax exemption for interest on OFA bonds would only be available for projects within Oregon.