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HOUSE OF REPRESENTATIVES - FLOOR VERSION
STATE OF OKLAHOMA
1st Session of the 58th Legislature (2021)
COMMITTEE SUBSTITUTE
FOR
HOUSE BILL NO. 2601 By: Roberts (Sean)
COMMITTEE SUBSTITUTE
An Act relating to public trusts; amending 60 O.S.
2011, Section 176, as last amended by Section 1,
Chapter 405, O.S.L. 2019 (60 O.S. Supp. 2020, Section
176), which relates to formation of certain public
trusts; modifying provisions related to appointment
by board of county commissioners; providing for
method of selection; restricting appointment of
certain county commissioners based upon trust
indenture provisions; and declaring an emergency.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 60 O.S. 2011, Section 176, as last
amended by Section 1, Chapter 405, O.S.L. 2019 (60 O.S. Supp. 2020,
Section 176), is amended to read as follows:
Section 176. A. Express trusts may be created to issue
obligations, enter into financing arrangements incl uding, but not
limited to, lease-leaseback, sale-leaseback, interest rate swaps and
other similar transactions and to provide funds for the furtherance
and accomplishment of any authorized and proper public function or
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purpose of the state or of any county or municipality or any and all
combinations thereof, in real or personal property, or either or
both, or in any estate or interest in either or both, with the
state, or any county or municipality or any and all combinations
thereof, as the beneficiary the reof by:
1. The express approval of the Legislature and the Governor if
the State of Oklahoma is the beneficiary;
2. The express approval of two -thirds (2/3) of the membership
of the governing body of the beneficiary if a county is a
beneficiary;
3. The express approval of two -thirds (2/3) of the membership
of the governing body of the beneficiary if a municipality is a
beneficiary; or
4. The express approval of two -thirds (2/3) of the membership
of the governing body of each beneficiary in the event a trust has
more than one beneficiary; provided, that no funds of a beneficiary
derived from sources other than the trust property, or the operation
thereof, shall be charged with or expended for the execution of the
trust, except by express action of the le gislative authority of the
beneficiary prior to the charging or expending of the funds. The
officers or any other governmental agencies or authorities having
the custody, management, or control of any property, real or
personal or mixed, of the beneficiar y of the trust, or of a proposed
trust, which property shall be needful for the execution of the
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trust purposes, are authorized and empowered to lease the property
for those purposes, after the acceptance of the beneficial interest
therein by the beneficia ry as hereinafter provided.
B. Any trust created pursuant to the provisions of this
section, in whole or in part, may engage in activities outside of
the geographic boundaries of its beneficiary, so long as the
activity provides a benefit to a large class of the public within
the beneficiary's geographic area or lessens the burdens of
government of the beneficiary and which does not solely provide a
benefit by generating administrative fees.
C. A municipality may convey title to real property which is
used for an airport to the trustees of an industrial development
authority trust whose beneficiary is the municipality. The
industrial development authority trust must already have the
custody, management, or control of the real property. The
conveyance must be approved by a majority of the governing body of
the municipality. A conveyance pursuant to this section may be made
only for the sole purpose of allowing the authority to sell the
property for fair market value when the property is to be used for
industrial development purposes. Conveyances made pursuant to this
subsection shall be made subject to any existing reversionary
interest or other restrictions burdening the property and subject to
any reversionary interest or other restriction considered pr udent by
the municipality.
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D. The trustees of a public trust having the State of Oklahoma
as beneficiary shall make and adopt bylaws for the due and orderly
administration and regulation of the affairs of the public trust.
All bylaws of a public trust ha ving the State of Oklahoma as
beneficiary shall be submitted in writing to the Governor of the
State of Oklahoma. The Governor must approve the proposed bylaws
before they take effect.
E. No public trust in which the State of Oklahoma is the
beneficiary may be amended without a two -thirds (2/3) vote of
approval of the trustees of the trust; provided, that any amendment
is subject to the approval of the Governor of the State of Oklahoma.
Any amendments shall be sent to the Governor within fifteen (15)
days of their adoption.
F. No trust in which a county or municipality is the
beneficiary shall hereafter create an indebtedness or obligation
until the indebtedness or obligation has been approved by a two -
thirds (2/3) vote of the governing body of the benef iciary. In the
event a trust has more than one beneficiary, as authorized by this
section, the trust shall not incur an indebtedness or obligation
until the indebtedness or obligation has been approved by a two -
thirds (2/3) vote of the governing body of t wo-thirds (2/3) of the
beneficiaries of the trust. Provided, however, a municipality with
a governing body consisting of fewer than seven (7) members shall be
required to approve the creation of an indebtedness or obligation
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under this subsection by a thr ee-fifths (3/5) vote of the governing
body.
G. All bonds described in subsection F of this section, after
December 1, 1976, except bonds sold to the federal government or any
agency thereof or to any agency of the State of Oklahoma, shall be
awarded to the lowest and best bidder based upon open competitive
public offering, advertised at least once a week for two (2)
successive weeks in a newspaper of general circulation in the county
where the principal office of the trust is located prior to the date
on which bids are received and opened; provided, competitive bidding
may be waived on bond issues with the approval of three -fourths
(3/4) of the trustees, and a three -fourths (3/4) vote of the
governing body of the beneficiary, unless the beneficiary is a
county in which case a two -thirds (2/3) vote of the members of the
governing body shall be required, or three -fourths (3/4) vote of the
governing bodies of each of the beneficiaries of the trust, unless
one of the beneficiaries is a county in which case a two -thirds
(2/3) vote of the members of the governing body of such county shall
be required. No bonds shall be sold for less than par value, except
upon approval of three -fourths (3/4) of the trustees, unless the
beneficiary is a county in which case a two -thirds (2/3) vote of the
members of the governing body shall be required. In no event shall
bonds be sold for less than sixty -five percent (65%) of par value;
provided, however, in no event shall the original purchaser from the
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issuer of any bonds issued b y any public trust for any purpose
receive directly or indirectly any fees, compensation, or other
remuneration in excess of four percent (4%) of the price paid for
the bonds by the purchaser of the bonds from the original purchaser;
and further provided, that the average coupon rate thereon shall in
no event exceed fourteen percent (14%) per annum. No public trust
shall sell bonds for less than ninety -six percent (96%) of par value
until the public trust has received from the underwriter or
financial advisor or, in the absence of an underwriter or financial
advisor, the initial purchaser of the bonds, an estimated
alternative financing structure or structures showing the estimated
total interest and principal cost of each alternative. At least one
alternative financing structure shall include bonds sold to the
public at par. Any estimates shall be considered a public record of
the public trust. Bonds, notes or other evidences of indebtedness
issued by any public trust shall be eligible for purchase by an y
state banking association or corporation subject to such limitations
as to investment quality as may be imposed by regulations, rules or
rulings of the State Banking Commissioner.
H. Public trusts created pursuant to this section shall file
annually, with their respective beneficiaries, copies of financial
documents and reports sufficient to demonstrate the fiscal activity
of such trust, including, but not limited to, budgets, financial
reports, bond indentures, and audits. Amendments to the adopted
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budget shall be approved by the trustees of the public trust and
recorded as such in the official minutes of such trust.
I. Contracts for construction, labor, equipment, material or
repairs in excess of Fifty Thousand Dollars ($50,000.00) shall be
awarded by public trusts to the lowest and best competitive bidder,
pursuant to public invitation to bid, which shall be published in
the manner provided in subsection G of this section; the
advertisements shall appear in the county where the work, or the
major part of it, is to be done, or the equipment or materials are
to be delivered, or the services are to be rendered; provided,
however, should the trustee or the trustees find that an immediate
emergency exists, which findings shall be entered in the journal of
the trust proceedings, by reason of which an immediate outlay of
trust funds in an amount exceeding Seventy -five Thousand Dollars
($75,000.00) is necessary in order to avoid loss of life,
substantial damage to property, or damage to the public peace or
safety, then the contracts may be made and entered into without
public notice or competitive bids; provided that the provisions of
this subsection shall not apply to contracts of industrial and
cultural trusts. Notwithstanding the provisions of this subsectio n,
equipment or materials may be purchased by a public trust directly
from any contract duly awarded by this state or any state agency
under The Oklahoma Central Purchasing Act, or from any contract duly
awarded by a governmental entity which is the benefi ciary of the
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public trust. Furthermore, any construction contract issued under
this section may provide for a local bid preference of not more than
five percent (5%) of the bid price if the public trust governing
body determines that there is an economic benefit to the local area
or economy. Provided, however, the local bidder or contractor must
agree to perform the contract for the same price and terms as the
bid proposed by the nonlocal bidder or contractor. Any bid
preference granted hereunder must be in accordance with an
established policy adopted by the governing body of the trust to
clearly demonstrate the economic benefit to the local area or
economy. Provided, further, no local bid preference shall be
granted unless the local bidding entity is t he second lowest
qualified bid on the contract. The bid specifications shall clearly
state that the bid is subject to a local bidder preference law. For
purposes of this section, "local bid" means the bidding person is
authorized to transact business in this state and maintains a bona
fide establishment for transacting such business within this state.
This provision does not apply to any construction contract for which
federal funds are available for expenditure when its provisions may
be in conflict with federal law or regulation.
J. Any public trust created pursuant to the provisions of this
section shall have the power to acquire lands by use of eminent
domain in the same manner and according to the procedures provided
for in Sections 51 through 65 of Title 66 of the Oklahoma Statutes.
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Any exercise of the power of eminent domain by a public trust
pursuant to the provisions of this section shall be limited to the
furtherance of public purpose projects involving revenue -producing
utility projects of whi ch the public trust retains ownership;
provided, for public trusts in which the State of Oklahoma is the
beneficiary the exercise of the power of eminent domain may also be
used for public purpose projects involving air transportation.
Revenue-producing utility projects shall be limited to projects for
the transportation, delivery, treatment, or furnishing of water for
domestic purposes or for power, including, but not limited to, the
construction of lakes, pipelines, and water treatment plants or for
projects for rail transportation. Any public trust formed pursuant
to this section which has a county as its beneficiary shall have the
power to acquire, by use of eminent domain, any lands located either
inside the county, or contiguous to the county pursuan t to the
limitations imposed pursuant to this section.
K. Provisions of this section shall not apply to entities
created under Sections 1324.1 through 1324.26 of Title 82 of the
Oklahoma Statutes.
L. Any trust created under Section 176 et seq. of this ti tle,
in whole or in part, to operate, administer or oversee any county
jail facility shall consist of not less than five members and
include a county commissioner and the county sheriff, or their
designee, and one member appointed by each of the county
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commissioners at least three members chosen at large by the board of
county commissioners . The appointed members shall not be elected
officials. Notwithstanding any provision to the contrary in the
trust indenture, no individual county commissioner shall ha ve the
right to any appointment to the trust.
SECTION 2. It being immediately necessary for the preservation
of the public peace, health or safety, an emergency is hereby
declared to exist, by reason whereof this act shall take effect and
be in full force from and after its passage and approval.
COMMITTEE REPORT BY: COMMITTEE ON GENERAL GOVERNMENT, dated
02/25/2021 - DO PASS, As Amended.