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ENGROSSED HOUSE
BILL NO. 2896 By: Wallace and Hilbert of the
House
and
Thompson and Hall of the
Senate
An Act relating to transportation infrastructure
finance; authorizing issuance of certain obligations
by the Oklahoma Capitol Improvement Authority;
authorizing the Oklahoma Capitol Improvement
Authority to enter into loan agreements with the
United States Department of Transportation; stating
amount of net proceeds; imposing certain restrictions
related to timing of issuance; clarifying the
treatment of capitalized interest; requiring certain
deposit of proceeds; providing for use of net
proceeds; specifying authorized use of proceeds;
incorporating content of Construction Work Plan;
providing for priority of expenditures; providing for
disposition of certain earnings; authorizing
agreements between the Oklahoma Capitol Improvement
Authority and the Transportation Commission or the
Department of Transportation; specifying content of
agreements; providing for effect of redemption or
defeasance; authorizing borrowing of monies and
issuance of negotiable obligations; authorizing
issuance in series; stating legislative intent with
respect to appropriations to the Department of
Transportation; authorizing payment of certain fees
and costs; authorizing the hiring of professionals to
perform certain services; authorizing utilization of
proceeds portion for certain purpose; authorizing the
pledging of revenues as security; providing
obligations not general obligations of the State of
Oklahoma; providing full faith and credit not pledged
to repayment; requiring certain statement be
contained on the obligations face; prescribing
procedures for sale of obligations; authorizing
credit enhancement and liquidity agreements;
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requiring final maturation within c ertain period;
providing for disposition of interest earnings;
providing exemption from taxation; requiring initial
execution within certain time period; limiting time
period for authorization; providing an exception;
providing for investment of proceeds; providing for
applicability of certain statutory provisions and
clarifying legislative intent with respect to such
applicability; authorizing Oklahoma Capitol
Improvement Authority to initiate certain judicial
proceedings; providing for codification; and
declaring an emergency.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 350.1 of Title 73, unless there
is created a duplication in numbering, reads as follows:
A. Subject to the limitations with respect to the authorized
date of issuance provided by this subsection, the Oklahoma Capitol
Improvement Authority is authorized to issue notes, bonds or other
evidences of obligation, and to execute federal loans with the
United States Department of Transportation pursuant to the
Transportation Infrastructure Finance and Innovation Act (codified
as 23 U.S.C., Sections 601 -609), in an amount necessary to generate
net proceeds of Two Hundred Mi llion Dollars ($200,000,000.00), no
earlier than July 1, 2021, after providing for costs of issuance,
credit enhancement, reserves and other associated expenses related
to the financing. The principal amount of any note, bond or other
evidence of obligati on issued to the United States Department of
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Transportation in connection with any federal loan authorized
hereunder may be increased following disbursement of loan proceeds
by the amount of interest that may be capitalized and added to
principal in accordance with the terms of the federal loan
agreement.
B. Net proceeds of the financing will be deposited into a
construction fund to provide for the financing of the acquisition of
real property, together with improvements located thereon, and
personal property, to construct, maintain and improve those state
highway and state bridge assets identified in the Oklahoma
Transportation Commission Construction Work Plan as represented in
the Appendix of this act, which is incorporated as if fully set out
herein.
C. The Transportation Commission or the Department of
Transportation shall use the proceeds identified in subsection B of
this section according to the priority of the enumerated projects as
they appear for the applicable federal fiscal year in the
Construction Work Plan described in subsection B of this section in
order to facilitate the completion of the enumerated projects,
giving consideration to the ability to match federal funding and
such other factors as the Transportation Commission or the
Department of Transportation shall deem fiscally prudent.
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D. Earnings that result from the investment of the construction
fund may be used for the projects authorized in this section or for
other legal purposes approved by the Authority.
E. The Authority and the Transportation Commission or the
Department of Transportation are authorized to enter into such
agreements as may be necessary to authorize the Authority to hold
title to the real and personal property and improvements until such
time as any obligations is sued for the purpose set forth in
subsection B of this section are retired or defeased and the
Authority may lease the real property and improvements to the
Transportation Commission or the Department of Transportation for
the purposes authorized by this s ection. Upon final redemption or
defeasance of the obligations created pursuant to this section,
title to the real and personal property and improvements shall be
transferred from the Oklahoma Capitol Improvement Authority to the
Transportation Commission or the Department of Transportation.
F. For the purpose of paying the costs for acquisition and
construction of the real property and improvements and personal
property and making the repairs, refurbishments and improvements to
real and personal property , and providing funding for the projects
authorized in this section, and for the purpose authorized in
subsection H of this section, the Authority is hereby authorized to
borrow monies on the credit of the income and revenues to be derived
from the leasing of such real and personal property and improvements
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and, in anticipation of the collection of such income and revenues,
to issue negotiable obligations in one or more series.
G. It is the intent of the Legislature to appropriate to the
Department of Transportation sufficient monies to make rental
payments for the purposes of retiring the obligations created
pursuant to this section.
H. To the extent funds are available from the proceeds of the
borrowing authorized by subsection A of this section, the Okl ahoma
Capitol Improvement Authority shall provide for the payment of
professional fees and associated costs related to the projects
authorized in this section.
I. The Authority may issue obligations in one or more series
and in conjunction with other issu es of the Authority. The
Authority is authorized to hire bond counsel, financial consultants
and such other professionals as it may deem necessary to provide for
the efficient sale of the obligations or the issuance of obligations
to the United States Dep artment of Transportation in connection with
federal loans, as described in subsection A of this section, and may
utilize a portion of the proceeds of any borrowing to create such
reserves as may be deemed necessary and to pay costs associated with
the issuance and administration of such obligations.
J. The bond indenture or other instrument pursuant to which the
Oklahoma Capitol Improvement Authority becomes obligated for the
repayment of principal and interest of the proceeds from the sale of
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obligations or the execution of a loan with the United States
Department of Transportation authorized in subsection A of this
section shall provide that all obligations are to be repaid from the
source of revenue specified in this section. Such bond indenture or
other instrument may provide for the pledge of such revenue and the
associated funds and accounts established thereunder as security for
the payment of such obligations.
K. The bonds or other obligations issued pursuant to this
section shall not at any time be deemed to constitute a debt of the
state or of any political subdivision thereof or a pledge of the
faith and credit of the state or of any such political subdivision.
L. Such bonds or other obligations shall contain on the face
thereof a statement tha t neither the faith and credit nor the taxing
power of the state or any political subdivision thereof is pledged,
or may hereafter be pledged, to the payment of the principal of or
the interest on such bonds or other obligations.
M. The obligations author ized under this section may be sold at
either competitive, negotiated sale, or may be directly placed with
the United States Department of Transportation as determined by the
Authority, and in such form and at such prices as may be authorized
by the Authority. The Authority may enter into agreements with such
credit enhancers and liquidity providers as may be determined
necessary to efficiently market the obligations. The obligations
may mature and have such provisions for redemption as shall be
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determined by the Authority, but in no event shall the final
maturity of such obligations occur later than thirty (30) years from
the first principal maturity date.
N. Any interest earnings on funds or accounts created for the
purposes of this section may be utili zed as partial payment of the
annual debt service or for the purposes directed by the Authority.
O. The obligations issued under this section, the transfer
thereof and the interest earned on such obligations, including any
profit derived from the sale the reof, shall not be subject to
taxation of any kind by the State of Oklahoma, or by any county,
municipality or political subdivision therein.
P. Obligations authorized under this section shall have an
initial execution no later than five (5) years from th e effective
date of this act. If no obligations have been issued by the end of
such five-year period, the authorization provided by this section
shall be null and void. Provided that, an issuance of a portion of
the obligations authorized in subsection A of this section during
such five-year period shall satisfy the issuance requirement of this
subsection.
Q. The Authority may direct the investment of all monies in any
funds or accounts created in connection with the offering of the
obligations authorize d under this section. Such investments shall
be made in a manner consistent with the investment guidelines of the
State Treasurer. The Authority may place additional restrictions on
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the investment of such monies , if necessary, to enhance the
marketability of the obligations.
R. Insofar as they are not in conflict with the provisions of
this section, the provisions of Section 151 et seq. of Title 73 of
the Oklahoma Statutes shall apply to this section. It is the intent
of the Legislature that the Oklahom a Capitol Improvement Authority
shall have the same powers to require the Oklahoma Department of
Transportation to use and occupy the capital improvements and real
property financed by the Oklahoma Capitol Improvement Authority, and
to pay rent for such us e and occupancy, as the Oklahoma Capitol
Improvement Authority has under Sections 161(3) and 163 of Title 73
of the Oklahoma Statutes with respect to buildings.
S. The Oklahoma Capitol Improvement Authority may initiate
proceedings for purposes of validat ing the obligations authorized
pursuant to the provisions of this section according to the
provisions of Section 14.1 of Title 20 of the Oklahoma Statutes not
later than one hundred twenty (120) days after the effective date of
this act.
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.
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Passed the House of Representatives the 18th day of May, 2021.
Presiding Officer of the House
of Representatives
Passed the Senate the ___ day of __________, 2021.
Presiding Officer of the Senate
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