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83rd OREGON LEGISLATIVE ASSEMBLY--2025 Regular Session
House Bill 2515
Introduced and printed pursuant to House Rule 12.00. Presession filed (at the request of House Interim Committee
on Education for Oregon Association of Education Service Districts)
SUMMARY
The following summary is not prepared by the sponsors of the measure and is not a part of the body thereof subject
to consideration by the Legislative Assembly. It is an editor’s brief statement of the essential features of the
measure as introduced.The statement includes a measure digest written in compliance with applicable readability
standards.
Digest: The Act allows public bodies to agree to create pools of funds or proceeds to invest
without help from the State Treasurer and the OIC. (Flesch Readability Score: 66.4).
Authorizes public bodies to enter into an intergovernmental agreement to pool bond proceeds
or other funds into commonly managed investments without the oversight of the State Treasurer and
the Oregon Investment Council.
A BILL FOR AN ACT
Relating to pools for the investment of funds of public bodies; creating new provisions; and amending
ORS 294.035 and 294.820.
Be It Enacted by the People of the State of Oregon:
SECTION 1. ORS 294.820 is amended to read:
294.820. [If the State Treasurer and the Oregon Investment Council terminate the operation of all
investment pools created under ORS 293.863,] Public bodies may establish by written agreement un-
der ORS chapter 190 one or more pools for the investment of proceeds for the purposes identified
in ORS 293.861.In establishing one or more such pools, the participating public bodies may exercise
those powers conferred on the State Treasurer and the Oregon Investment Council by ORS 293.863.
SECTION 2. Section 3 of this 2025 Act is added to and made a part of ORS 294.805 to
294.895.
SECTION 3.In lieu of or in addition to an investment pool and in addition to a pool for
the investment of proceeds described in ORS 294.820, public bodies may establish by written
agreement under ORS chapter 190 one or more pools for the investment of funds of the
public bodies that do not constitute proceeds as defined in ORS 293.863. In establishing one
or more pools for the investment of funds, participating public bodies may exercise those
powers conferred on the State Treasurer and the Oregon Investment Council by ORS 293.863.
SECTION 4. ORS 294.035 is amended to read:
294.035. (1) Subject to ORS 294.040 and 294.135 to 294.155, the custodial officer may invest any
sinking fund, bond fund or surplus funds in the custody of the custodial officer in the bank accounts,
classes of securities at current market prices, insurance contracts and other investments listed in
this section, but only after obtaining from the governing body of the county, municipality, political
subdivision or school district a written order that has been entered in the minutes or journal of the
governing body.
(2) This section does not:
(a) Limit the authority of the custodial officer to invest surplus funds in other investments when
the investment is specifically authorized by another statute.
NOTE:Matter in boldfaced type in an amended section is new; matter [italic and bracketed] is existing law to be omitted.
New sections are in boldfaced type.
LC 1852 HB2515
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(b) Apply to a sinking fund or a bond fund established in connection with conduit revenue bonds
issued by a county, municipality, political subdivision or school district for private business entities
or nonprofit corporations.
(3) Investments authorized by this section are:
(a) Lawfully issued general obligations of the United States, the agencies and instrumentalities
of the United States or enterprises sponsored by the United States Government and obligations
whose payment is guaranteed by the United States, the agencies and instrumentalities of the United
States or enterprises sponsored by the United States Government.
(b) Lawfully issued debt obligations of the agencies and instrumentalities of the State of Oregon
and its political subdivisions that have a long-term rating of A- or an equivalent rating or better or
are rated on the settlement date in the highest category without any refinement or gradation for
short-term municipal debt by a nationally recognized statistical rating organization.
(c) Lawfully issued debt obligations of the States of California, Idaho and Washington and poli-
tical subdivisions of those states if the obligations have a long-term rating of AA- or an equivalent
rating or better or are rated on the settlement date in the highest category for short-term municipal
debt by a nationally recognized statistical rating organization.
(d) Time deposit open accounts, certificates of deposit and savings accounts in insured insti-
tutions as defined in ORS 706.008, in credit unions as defined in ORS 723.006 or in federal credit
unions, if the institution or credit union maintains a head office or a branch in this state.
(e) Share accounts and savings accounts in credit unions in the name of, or for the benefit of,
a member of the credit union pursuant to a plan of deferred compensation.
(f) Fixed or variable life insurance or annuities as defined in ORS 731.170 and guaranteed in-
vestment contracts issued by life insurance companies authorized to do business in this state.
(g) Trusts in which deferred compensation funds from other public employers are pooled, if:
(A) The purpose is to establish a deferred compensation plan;
(B) The trust is a public instrumentality of such public employers and described in section (2)(b)
of the Investment Company Act of 1940, 15 U.S.C. 80a-2(b), as amended, in effect on September 20,
1985, or the trust is a common trust fund described in ORS 709.170;
(C) Under the terms of the plan the net income from or gain or loss due to fluctuation in value
of the underlying assets of the trust, or other change in such assets, is reflected in an equal increase
or decrease in the amount distributable to the employee or the beneficiary thereof and, therefore,
does not ultimately result in a net increase or decrease in the worth of the public employer or the
state; and
(D) The fidelity of the trustees and others with access to such assets, other than a trust com-
pany, as defined in ORS 706.008, is insured by a surety bond that is satisfactory to the public em-
ployer, issued by a company authorized to do a surety business in this state and in an amount that
is not less than 10 percent of the value of such assets.
(h)(A) Banker’s acceptances, if the banker’s acceptances are:
(i) Guaranteed by, and carried on the books of, a qualified financial institution;
(ii) Eligible for discount by the Federal Reserve System; and
(iii) Issued by a qualified financial institution whose short-term letter of credit rating is rated
in the highest category without any refinement or gradation by one or more nationally recognized
statistical rating organizations.
(B) For the purposes of this paragraph, “qualified financial institution” means:
(i) A financial institution that is located and licensed to do banking business in the State of
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Oregon;or
(ii) A financial institution that is wholly owned by a financial holding company or a bank hold-
ing company that owns a financial institution that is located and licensed to do banking business in
the State of Oregon.
(C) A custodial officer shall not permit more than 25 percent of the moneys of a local govern-
ment that are available for investment, as determined on the settlement date, to be invested in
banker’s acceptances of any qualified financial institution.
(i)(A) Corporate indebtedness subject to a valid registration statement on file with the Securities
and Exchange Commission or issued under the authority of section 3(a)(2) or 3(a)(3) of the Securities
Act of 1933, as amended. Corporate indebtedness described in this paragraph does not include
banker’s acceptances.The corporate indebtedness must be issued by a commercial, industrial or
utility business enterprise, or by or on behalf of a financial institution, including a holding company
owning a majority interest in a qualified financial institution.
(B) Corporate indebtedness must be rated on the settlement date P-1 or Aa3 or better by
Moody’s Investors Service or A-1 or AA- or better by S&P Global Ratings and Fitch Ratings or an
equivalent rating by any nationally recognized statistical rating organization.
(C) Notwithstanding subparagraph (B) of this paragraph, the corporate indebtedness must be
rated on the settlement date P-2 or A3 or better by Moody’s Investors Service or A-2 or A or better
by S&P Global Ratings and Fitch Ratings or an equivalent rating by any nationally recognized sta-
tistical rating organization when the corporate indebtedness is:
(i) Issued by a business enterprise that has its headquarters in Oregon, employs more than 50
percent of its permanent workforce in Oregon or has more than 50 percent of its tangible assets in
Oregon; or
(ii) Issued by a holding company owning not less than a majority interest in a qualified financial
institution, as defined in paragraph (h) of this subsection, located and licensed to do banking busi-
ness in Oregon or by a holding company owning not less than a majority interest in a business en-
terprise described in sub-subparagraph (i) of this subparagraph.
(D) A custodial officer may not permit more than 35 percent of the moneys of a local govern-
ment that are available for investment, as determined on the settlement date, to be invested in
corporate indebtedness, and may not permit more than five percent of the moneys of a local gov-
ernment that are available for investment to be invested in corporate indebtedness of any single
corporate entity and its affiliates or subsidiaries.
(j) Repurchase agreements whereby the custodial officer purchases securities from a financial
institution or securities dealer subject to an agreement by the seller to repurchase the securities.
The repurchase agreement must be in writing and executed in advance of the initial purchase of the
securities that are the subject of the repurchase agreement. Only securities described in paragraph
(a) of this subsection may be used in conjunction with a repurchase agreement and such securities
shall have a maturity of not longer than three years. The price paid by the custodial officer for such
securities may not exceed amounts or percentages prescribed by written policy of the Oregon In-
vestment Council or the Oregon Short Term Fund Board created by ORS 294.885.
(k) Shares of stock of any company, association or corporation, including but not limited to
shares of a mutual fund, but only if the moneys being invested are funds set aside pursuant to a
local government deferred compensation plan and are held in trust for the exclusive benefit of par-
ticipants and their beneficiaries.
(L) The investment pool as defined in ORS 294.805 and, with the approval of the State Treasurer,
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any other commingled investment pool that may be established in the discretion of the State
Treasurer for investment of the funds of local governments.The State Treasurer may require the
governing body of a local government to enter into an investment agreement with the State Treas-
urer as a condition of investing funds in a commingled investment pool under this paragraph.
(m) A pool for the investment of proceeds or funds as established under ORS 294.820 or
section 3 of this 2025 Act.
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