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28	28	STATE OF OKLAHOMA
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30	30	2nd Session of the 58th Legislature (2022 )
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32	32	HOUSE BILL 3336 By: Fugate
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38	38	AS INTRODUCED
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40	40	An Act relating to public trusts; amending 60 O.S.
41	41	2021, Section 176, which relates to trusts for public
42	42	functions; defining term; and providing an effective
43	43	date.
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49	49	BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
50	50	SECTION 1. AMENDATORY 60 O.S. 2021, Section 176, is
51	51	amended to read as follows:
52	52	Section 176. A. Express trusts may be created to issue
53	53	obligations, enter into financing arrangements including, but not
54	54	limited to, lease-leaseback, sale-leaseback, interest rate swaps and
55	55	other similar transactions and to provide funds for the furtherance
56	56	and accomplishment of any authorized and proper publi c function or
57	57	purpose of the state or of any county or municipality or any and all
58	58	combinations thereof, in real or personal property, or either or
59	59	both, or in any estate or interest in either or both, with the
60	60	state, or any county or municipality or any a nd all combinations
61	61	thereof, as the beneficiary thereof by:
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88	88	1. The express approval of the Legisla ture and the Governor if
89	89	the State of Oklahoma is the beneficiary;
90	90	2. The express approval of two -thirds (2/3) of the membership
91	91	of the governing body of th e beneficiary if a county is a
92	92	beneficiary;
93	93	3. The express approval of two -thirds (2/3) of the mem bership
94	94	of the governing body of the beneficiary if a municipality is a
95	95	beneficiary; or
96	96	4. The express approval of two -thirds (2/3) of the membership
97	97	of the governing body of each beneficiary in the event a trust has
98	98	more than one beneficiary; provided, t hat no funds of a beneficiary
99	99	derived from sources other than the trust property, or the operation
100	100	thereof, shall be charged with or expended for the executi on of the
101	101	trust, except by express action of the legislative authority of the
102	102	beneficiary prior to the charging or expending of the funds. The
103	103	officers or any other governmental agencies or authorities having
104	104	the custody, management or control of any prop erty, real or personal
105	105	or mixed, of the beneficiary of the trust, or of a proposed trust,
106	106	which property shall be needful for the execution of the trust
107	107	purposes, are authorized and empowered to lease the property for
108	108	those purposes, after the acceptance o f the beneficial interest
109	109	therein by the beneficiary as hereinafter provided.
110	110	B. Any trust created pursuant to the provisions of this
111	111	section, in whole or in part, may engage in activities outside of
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138	138	the geographic boundaries of its beneficiary, so long a s the
139	139	activity provides a benefit to a large class of the public within
140	140	the beneficiary's geographic area or lessens the burdens of
141	141	government of the beneficiary and which does not solely provide a
142	142	benefit by generating administrative fees.
143	143	C. A municipality may convey title to real property which is
144	144	used for an airport to the trustees of an industrial development
145	145	authority trust whose beneficiary is the municipality. The
146	146	industrial development authority trust must already have the
147	147	custody, management or control of the real property. The conveyance
148	148	must be approved by a majority of the governing body of the
149	149	municipality. A conveyance pursuant to this section may be made
150	150	only for the sole purpose of allowing the authority to sell the
151	151	property for fair mar ket value when the property is to be used for
152	152	industrial development purposes. Conveyances made pu rsuant to this
153	153	subsection shall be made subject to any existing reversionary
154	154	interest or other restrictions burdening the property and subject to
155	155	any reversionary interest or other restriction considered prudent by
156	156	the municipality.
157	157	D. The trustees of a p ublic trust having the State of Oklahoma
158	158	as beneficiary shall make and adopt bylaws for the due and orderly
159	159	administration and regulation of the affairs of t he public trust.
160	160	All bylaws of a public trust having the State of Oklahoma as
161	161	beneficiary shall be submitted in writing to the Governor of the
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188	188	State of Oklahoma. The Governor must approve the proposed bylaws
189	189	before they take effect.
190	190	E. No public trust i n which the State of Oklahoma is the
191	191	beneficiary may be amended without a two -thirds (2/3) vote of
192	192	approval of the trustees of the trust; provided, that any amendment
193	193	is subject to the approval of the Governor of the State of Oklahoma.
194	194	Any amendments shall be sent to the Governor within fifteen (15)
195	195	days of their adoption.
196	196	F. No trust in which a count y or municipality is the
197	197	beneficiary shall hereafter create an indebtedness or obligation
198	198	until the indebtedness or obligation has been approved by a two -
199	199	thirds (2/3) vote of the governing body of the beneficiary. In the
200	200	event a trust has more than one be neficiary, as authorized by this
201	201	section, the trust shall not incur an indebtedness or obligation
202	202	until the indebtedness or obligation has been approved by a two-
203	203	thirds (2/3) vote of the governing body of two -thirds (2/3) of the
204	204	beneficiaries of the trust. Provided, however, a municipality with
205	205	a governing body consisting of fewer than seven (7) members shall be
206	206	required to approve the creation of an indebted ness or obligation
207	207	under this subsection by a three -fifths (3/5) vote of the governing
208	208	body.
209	209	G. All bonds described in subsection F of this section, after
210	210	December 1, 1976, except bonds sold to the federal government or any
211	211	agency thereof or to any agency of the State of Oklahoma, shall be
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238	238	awarded to the lowest and best bidder based upon open competiti ve
239	239	public offering, advertised at least once a week for two (2)
240	240	successive weeks in a newspaper of general circulation in the county
241	241	where the principal offi ce of the trust is located prior to the date
242	242	on which bids are received and opened; provided, compe titive bidding
243	243	may be waived on bond issues with the approval of three -fourths
244	244	(3/4) of the trustees, unless the trust has fewer than four
245	245	trustees, in which case a two-thirds (2/3) approval shall be
246	246	required, and a three -fourths (3/4) vote of the governin g body of
247	247	the beneficiary, unless the beneficiary is a county in which case a
248	248	two-thirds (2/3) vote of the members of the governing body shall be
249	249	required, or three-fourths (3/4) vote of the governing bodies of
250	250	each of the beneficiaries of the trust, unles s one of the
251	251	beneficiaries is a county in which case a two -thirds (2/3) vote of
252	252	the members of the governing body of such county shall be required.
253	253	No bonds shall be sold for less than par value, except upon approval
254	254	of three-fourths (3/4) of the trustees , unless the beneficiary is a
255	255	county in which case a two -thirds (2/3) vote of the members of the
256	256	governing body shall be required. In no event shall bonds b e sold
257	257	for less than sixty-five percent (65%) of par value; provided,
258	258	however, in no event shall th e original purchaser from the issuer of
259	259	any bonds issued by any public trust for any purpose receive
260	260	directly or indirectly any fees, compensation or other r emuneration
261	261	in excess of four percent (4%) of the price paid for the bonds by
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288	288	the purchaser of the bonds from the original purchaser; and further
289	289	provided, that the average coupon rate thereon shall in no event
290	290	exceed fourteen percent (14%) per annum. No public trust shall sell
291	291	bonds for less than ninety -six percent (96%) of par value until the
292	292	public trust has received from the underwriter or financial advisor
293	293	or, in the absence of an underwriter or financial advisor, the
294	294	initial purchaser of the bonds, a n estimated alternative financing
295	295	structure or structures showing the estimated total interest and
296	296	principal cost of each alternative. At least one alternative
297	297	financing structure shall include bonds sold to the public at par.
298	298	Any estimates shall be cons idered a public record of the public
299	299	trust. Bonds, notes or other evidences of indebtedness issued by
300	300	any public trust shall be eligible for purchase by any state banking
301	301	association or corporation subject to such limitations as to
302	302	investment quality as m ay be imposed by regulations, rules or
303	303	rulings of the State Banking Commissioner.
304	304	H. Public trusts created pursuant to this section shall file
305	305	annually, with their respective beneficiaries, copies of financial
306	306	documents and reports sufficient to demonstra te the fiscal activity
307	307	of such trust, including, but not limited to, budgets, financial
308	308	reports, bond indentures and audits. Amendments to the adopted
309	309	budget shall be approved by the trustees of the public trust and
310	310	recorded as such in the official minute s of such trust.
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337	337	I. Contracts for construction, labor, equipment, material or
338	338	repairs in excess of Fifty Thousand Dollars ($50,000.00) shall be
339	339	awarded by public trusts to the lowest and best competitive bidder,
340	340	pursuant to public invitation to bid, which shall be published in
341	341	the manner provided in subsection G of this section; the
342	342	advertisements shall appear in the county where the work, or the
343	343	major part of it, is to be done, or the equipment or materials are
344	344	to be delivered, or the services are to be r endered; provided,
345	345	however, should the trustee or the trustees find that an immediate
346	346	emergency exists, which findings shall be entered in the journal of
347	347	the trust proceedings, by reason of which an immediate outlay of
348	348	trust funds in an amount exceeding Se venty-five Thousand Dollars
349	349	($75,000.00) is necessary in order to avoid loss of life,
350	350	substantial damage to property or damage to the public peace or
351	351	safety, then the contracts may be made and entered into without
352	352	public notice or competitive bids; provide d that the provisions of
353	353	this subsection shall not apply to contracts of industrial and
354	354	cultural trusts. Notwithstanding the provisions of this subsection,
355	355	equipment or materials may be purchased by a public trust directly
356	356	from any contract duly awarded b y this state or any state agency
357	357	under the Oklahoma Central Purchasing Act, or from any contract du ly
358	358	awarded by a governmental entity which is the beneficiary of the
359	359	public trust. Furthermore, any construction contract issued under
360	360	this section may provi de for a local bid preference of not more than
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387	387	five percent (5%) of the bid price if the public tru st governing
388	388	body determines that there is an economic benefit to the local area
389	389	or economy. Provided, however, the local bidder or contractor must
390	390	agree to perform the contract for the same price and terms as the
391	391	bid proposed by the nonlocal bidder or co ntractor. Any bid
392	392	preference granted hereunder must be in accordance with an
393	393	established policy adopted by the governing body of the trust to
394	394	clearly demonstrate the economic benefit to the local area or
395	395	economy. Provided, further, no local bid preferenc e shall be
396	396	granted unless the local bidding entity is the second lowest
397	397	qualified bid on the contract. The bid specifications shall clearly
398	398	state that the bid is subject to a local bidder preference law. For
399	399	purposes of this section, "local bid" means the bidding person is
400	400	authorized to transact business in this state and maintains a bona
401	401	fide establishment for transacting such business within this state.
402	402	This provision does not apply to any construction contract for which
403	403	federal funds are available for expenditure when its provisions may
404	404	be in conflict with federal law or regulation.
405	405	J. Any public trust created pursuant to the provisions of this
406	406	section shall have the power to acquire lands by use of eminent
407	407	domain in the same manner and according to t he procedures provided
408	408	for in Sections 51 through 65 of Title 66 of the Oklahoma Statutes.
409	409	Any exercise of the power of eminent domain by a public trust
410	410	pursuant to the provisions of this section shall be limited to the
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437	437	furtherance of public purpose proje cts involving revenue-producing
438	438	utility projects of which the public trust retains ownership;
439	439	provided, for public trusts in which the State of Oklahoma is t he
440	440	beneficiary the exercise of the power of eminent domain may also be
441	441	used for public purpose proj ects involving air transportation.
442	442	Revenue-producing utility projects shall be limited to projects for
443	443	the transportation, delivery, treatment or furnishing of water for
444	444	domestic purposes or for power, including, but not limited to, the
445	445	construction of lakes, pipelines and water treatment plants or for
446	446	projects for rail transportation. Any public trust formed pursuant
447	447	to this section which has a county as it s beneficiary shall have the
448	448	power to acquire, by use of eminent domain, any lands located either
449	449	inside the county, or contiguous to the county pursuant to the
450	450	limitations imposed pursuant to this section.
451	451	K. Provisions of this section shall not apply to entities
452	452	created under Sections 1324.1 through 1324.26 of Title 82 of the
453	453	Oklahoma Statutes.
454	454	L. Any trust created under Section 176 et seq. of this title,
455	455	in whole or in part, to operate, administer or oversee any county
456	456	jail facility shall consist of no t less than five members and
457	457	include a county commissioner and the county sheriff, or their
458	458	designee, and one member appointed by each of the county
459	459	commissioners. The appointed members shall not be elected
460	460	officials.
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487	487	M. As used in this section, "any authorized and proper public
488	488	function or purpose" includes, for municipalities which have a
489	489	population of more than six hundred seventy-five thousand (675,000)
490	490	persons according to the Federal Decennial Census or most recent
491	491	population estimate, allowing endowments earmarked for social
492	492	services, rendering services in partnership with state agencies,
493	493	leveraging federal matching dollars for social services, providing
494	494	more efficient or effective services for the municipality, or any
495	495	other purpose that may result in cost savings for the municipality .
496	496	SECTION 2. This act shall become effective N ovember 1, 2022.
497	497
498	498	58-2-9585 AQH 12/28/21

Oklahoma 2022 Regular Session

Oklahoma House Bill HB3336 Compare Versions