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STATE OF OKLAHOMA
2nd Session of the 58th Legislature (2022 )
HOUSE BILL 3336 By: Fugate
AS INTRODUCED
An Act relating to public trusts; amending 60 O.S.
2021, Section 176, which relates to trusts for public
functions; defining term; and providing an effective
date.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 60 O.S. 2021, Section 176, is
amended to read as follows:
Section 176. A. Express trusts may be created to issue
obligations, enter into financing arrangements including, 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 publi c function or
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 a nd all combinations
thereof, as the beneficiary thereof by:
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1. The express approval of the Legisla ture 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 th e beneficiary if a county is a
beneficiary;
3. The express approval of two -thirds (2/3) of the mem bership
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, t hat 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 executi on of the
trust, except by express action of the legislative 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 prop erty, real or personal
or mixed, of the beneficiary of the trust, or of a proposed trust,
which property shall be needful for the execution of the trust
purposes, are authorized and empowered to lease the property for
those purposes, after the acceptance o f the beneficial interest
therein by the beneficiary 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
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the geographic boundaries of its beneficiary, so long a s 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 mar ket value when the property is to be used for
industrial development purposes. Conveyances made pu rsuant 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 prudent by
the municipality.
D. The trustees of a p ublic 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 t he public trust.
All bylaws of a public trust having the State of Oklahoma as
beneficiary shall be submitted in writing to the Governor of the
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State of Oklahoma. The Governor must approve the proposed bylaws
before they take effect.
E. No public trust i n 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 count y 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 beneficiary. In the
event a trust has more than one be neficiary, 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 two -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 indebted ness or obligation
under this subsection by a three -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
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awarded to the lowest and best bidder based upon open competiti ve
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 offi ce of the trust is located prior to the date
on which bids are received and opened; provided, compe titive bidding
may be waived on bond issues with the approval of three -fourths
(3/4) of the trustees, unless the trust has fewer than four
trustees, in which case a two-thirds (2/3) approval shall be
required, and a three -fourths (3/4) vote of the governin g 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, unles s 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 b e sold
for less than sixty-five percent (65%) of par value; provided,
however, in no event shall th e original purchaser from the issuer of
any bonds issued by any public trust for any purpose receive
directly or indirectly any fees, compensation or other r emuneration
in excess of four percent (4%) of the price paid for the bonds by
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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, a n 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 cons idered 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 any state banking
association or corporation subject to such limitations as to
investment quality as m ay 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 demonstra te the fiscal activity
of such trust, including, but not limited to, budgets, financial
reports, bond indentures and audits. Amendments to the adopted
budget shall be approved by the trustees of the public trust and
recorded as such in the official minute s of such trust.
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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 r endered; 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 Se venty-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; provide d that the provisions of
this subsection shall not apply to contracts of industrial and
cultural trusts. Notwithstanding the provisions of this subsection,
equipment or materials may be purchased by a public trust directly
from any contract duly awarded b y this state or any state agency
under the Oklahoma Central Purchasing Act, or from any contract du ly
awarded by a governmental entity which is the beneficiary of the
public trust. Furthermore, any construction contract issued under
this section may provi de for a local bid preference of not more than
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five percent (5%) of the bid price if the public tru st 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 co ntractor. 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 preferenc e shall be
granted unless the local bidding entity is the 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 t he procedures provided
for in Sections 51 through 65 of Title 66 of the Oklahoma Statutes.
Any exercise of the power of eminent domain by a public trust
pursuant to the provisions of this section shall be limited to the
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furtherance of public purpose proje cts involving revenue-producing
utility projects of which the public trust retains ownership;
provided, for public trusts in which the State of Oklahoma is t he
beneficiary the exercise of the power of eminent domain may also be
used for public purpose proj ects 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 it s beneficiary shall have the
power to acquire, by use of eminent domain, any lands located either
inside the county, or contiguous to the county pursuant 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 title,
in whole or in part, to operate, administer or oversee any county
jail facility shall consist of no t 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
commissioners. The appointed members shall not be elected
officials.
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M. As used in this section, "any authorized and proper public
function or purpose" includes, for municipalities which have a
population of more than six hundred seventy-five thousand (675,000)
persons according to the Federal Decennial Census or most recent
population estimate, allowing endowments earmarked for social
services, rendering services in partnership with state agencies,
leveraging federal matching dollars for social services, providing
more efficient or effective services for the municipality, or any
other purpose that may result in cost savings for the municipality .
SECTION 2. This act shall become effective N ovember 1, 2022.
58-2-9585 AQH 12/28/21