USA Statutes : oregon
Title : TITLE 28 PUBLIC FINANCIAL ADMINISTRATION
Chapter : Chapter 294 County and Municipal Financial Administration
As used in ORS
294.005 to 294.025, unless the context requires otherwise:

(1) “Warrant” means a warrant issued by a subdivision.

(2) “Subdivision” means any county, municipal corporation,
quasi-municipal corporation, or civil or political subdivision in this
state.Subject to ORS 294.015,
no warrant issued by a subdivision shall be paid unless such warrant is
surrendered and delivered to the officer charged with the payment
thereof, contemporaneously with payment or prior thereto.A warrant may be paid
without surrender or delivery thereof if the one claiming to be the
lawful owner of the warrant:

(1) Satisfies the officer by whom payment is to be made that the
warrant has been lost, stolen or destroyed prior to the owner having
received value therefor or having negotiated the warrant; and

(2) Furnishes to the issuing officer a written statement signed by
such person specifically alleging that the owner is the lawful owner,
payee or legal representative of the lawful owner or payee of the
original instrument giving the date of issue, the number, amount, for
what services or claim the original instrument was issued and that the
original instrument has been lost, destroyed or stolen, and has not been
paid. However, if the lawful owner, payee or legal representative is (a)
a bank or national bank, (b) the federal government or (c) this state or
any board, department, commission or subdivision of this state, or any
officer thereof in the officer’s official capacity, a certificate may be
furnished in lieu of an affidavit or affirmation. The issuing officer may
also, in the officer’s discretion, require the bank or national bank to
furnish a satisfactory indemnity agreement executed by the bank or
national bank. [Amended by 1979 c.763 §6] When any
warrant is paid, other than as authorized by ORS 294.005 to 294.025, such
wrongful payment does not relieve the political body issuing the warrant
from liability to the true and lawful owner thereof. However, the officer
or person making such wrongful payment and the sureties on the official
bond of the officer or person, if any, shall be responsible to the
political body represented by the officer or person in making such
payment, for the full amount of the loss occasioned thereby. [Amended by
2005 c.22 §222] (1)
In addition to any other provisions of law for the issuance and payment
of warrants of any municipal or quasi-municipal corporation or civil
subdivision of this state other than school districts, the governing body
thereof may by resolution authorize such practices with respect to the
form, issuance, delivery, indorsement and payment of warrants as it shall
deem convenient, efficient and in the public interest, conforming
substantially to those specified in subsection (1) or (2) of this section
or in ORS 294.028.

(2) Such governing body may authorize the use of check-warrant
forms, to be drawn by its appropriate warrant issuing officer or officers
upon the custodian of its funds, so prepared that such custodian may, by
subscribing a direction to the depository of such funds to pay the same
to the order of the payee, convert the instrument to a check or, by
subscribing an indorsement that such warrant is not paid for want of
funds, convert the same to an interest-bearing warrant and such governing
body may direct that such check-warrants shall not be delivered to the
payees therein named until such direction or indorsement shall have been
subscribed by the custodian of its funds.

(3) Such governing body may provide that when funds are available
for the payment of approved claims, the approval of claims for payment
shall, without the issuance of any warrant, be authority to the custodian
of its funds to pay such claims by check. [1953 c.664 §1] When authorized by the
governing body, any custodian of funds of any municipal or
quasi-municipal corporation or civil subdivision of this state other than
a school district may direct the depository of such funds to pay any
warrant drawn upon such custodian upon presentment of such warrant to
such depository, to the same extent and with the same effect as though
such warrant were a check drawn upon such depository by such custodian.
Such direction shall be in writing and shall identify by name and
signature the warrant issuing officer or officers and such depository may
rely upon such direction and identification in the payment of such
warrants. [1953 c.664 §2]
Nothing contained in ORS 294.027 or 294.028 shall be deemed to require
any municipal or quasi-municipal corporation or civil subdivision of this
state or any custodian of public funds to exercise any of the powers
conferred by such sections. [1953 c.664 §3](1) The governing body of a
municipal corporation, quasi-municipal corporation or civil subdivision
of the state may, with the approval of the relevant employees of the
municipal corporation, quasi-municipal corporation or civil subdivision,
make deductions from their salaries and wages for the purpose of
purchasing for them United States War Savings Bonds or other federal
obligations.

(2) The governing body shall take proper precautions for the
depositing, securing and disbursing of the sums so deducted and for the
delivering of all bonds or other obligations purchased.

(3) Balances to the credit of the accounts in which the sums so
deducted are deposited may be used for the purchase in advance, from the
federal government or from any federal reserve bank or other authorized
federal agency, of war savings bonds or other obligations of the federal
government, either in blank or in inscribed form, in convenient
denominations to meet the requirements of the purchasers thereof. Funds set aside
by any local government pursuant to a deferred compensation plan may be
invested in any investment enumerated in ORS 294.035 and are not subject
to the collateral requirements of ORS chapter 295. [1977 c.470 §3; 1997
c.179 §26; 2005 c.91 §1](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.

(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.

(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 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 political 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 institutions 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 annuity contracts as
defined by ORS 731.170 and guaranteed investment 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 company, as defined in ORS 706.008, is insured
by a surety bond that is satisfactory to the public employer, 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 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 Oregon; or

(ii) A financial institution that is wholly owned by a financial
holding company or a bank holding 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 government 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 Aa or better by Moody’s Investors Service or A-1 or AA or better by
Standard & Poor’s Corporation or 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 A or
better by Moody’s Investors Service or A-2 or A or better by Standard &
Poor’s Corporation or equivalent rating by any nationally recognized
statistical 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 business in
Oregon or by a holding company owning not less than a majority interest
in a business enterprise 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 government 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 government that are available for investment to be invested in
corporate indebtedness of any single corporate entity and its affiliates
or subsidiaries.

(j) Securities of any open-end or closed-end management investment
company or investment trust, if the securities are of the types specified
in paragraphs (a) to (c), (h) and (i) of this subsection and if the
investment does not cause the county, municipality, political subdivision
or school district to become a stockholder in a joint company,
corporation or association. A trust company or trust department of a
national bank while acting as indenture trustee may invest funds held by
it as indenture trustee in any open-end or closed-end management
investment company or investment trust for which the trust company or
trust department of a national bank or an affiliate of the trust company
or trust department of a national bank acts as investment adviser or
custodian or provides other services. However, the securities of the
investment company or investment trust in which the funds are invested
must be of the types specified in paragraphs (a) to (c), (h) and (i) of
this subsection and the investment must not cause the county,
municipality, political subdivision or school district whose funds are
invested to become a stockholder in a joint company, corporation or
association. For purposes of this paragraph, companies are affiliated if
they are members of the same affiliated group under section 1504 of the
Internal Revenue Code of 1986 (26 U.S.C. 1504).

(k) 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
Investment Council or the Oregon Short Term Fund Board created by ORS
294.885.

(L) 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 participants and their beneficiaries. [Amended by 1957 c.53
§1; 1957 c.689 §1; 1965 c.404 §1; 1973 c.157 §1; 1973 c.288 §1; 1974 c.36
§9; 1975 c.359 §3; 1977 c.300 §1; 1981 c.804 §84; 1981 c.880 §13; 1983
c.456 §2; 1985 c.256 §2; 1985 c.440 §1; 1985 c.690 §2; 1987 c.493 §1;
1991 c.459 §379; 1993 c.59 §1; 1993 c.452 §1; 1993 c.721 §1; 1995 c.79
§102; 1995 c.245 §2; 1997 c.249 §91; 1997 c.631 §446; 1999 c.601 §1; 2001
c.377 §43; 2003 c.405 §1; 2005 c.443 §§13,13a] The bonds
listed in ORS 294.035 (3)(a) to (c) may be purchased only if there has
been no default in payment of either the principal of or the interest on
the obligations of the issuing county, port, school district or city, for
a period of five years next preceding the date of the investment.
[Amended by 1995 c.245 §3; 2005 c.443 §21] Whenever
the custodial officer is forced to liquidate investments made pursuant to
ORS 294.035 and 294.040 to meet current cash demands and such liquidation
results in a loss of invested principal because the securities were
liquidated prior to maturity under market conditions unfavorable to such
liquidation, the loss shall be charged against current or future
investment earnings and the custodial officer shall not be personally
liable to make good such loss. [1959 c.612 §1; 1963 c.465 §1; 1975 c.359
§5]When funds invested under ORS
294.035 (3)(d) are required to meet current cash demands and when
withdrawal or liquidation of such investments at the time would cause a
loss because the investment would be withdrawn or liquidated prior to
maturity, the custodial officer may, after receiving the approval of the
governing body, borrow funds on short-term promissory notes that shall be
secured by pledging or assigning the investments held under ORS 294.035
(3)(d). The notes shall mature in not more than six months after date of
issue. If a lender demands physical possession of the certificates of
deposit or other evidence of an investment pledged or assigned under this
section, the custodial officer shall deliver the certificate or other
evidence to the lender. [1967 c.411 §1; 1975 c.359 §6; 1995 c.245 §5;
2005 c.443 §23] The
county court or board of county commissioners may borrow money from the
general road fund of the county to supplement depleted election accounts
within the general fund of the county if there is no money within the
emergency fund of the county to supplement the depleted accounts within
the general fund. The amount so borrowed shall be returned to the general
road fund during the following fiscal year from the first funds available
in the general fund, or from the emergency fund. [Amended by 1959 c.664
§29; 1969 c.616 §1](1) As used in this section:

(a) “Bond” has the meaning given that term in ORS 288.605.

(b) “Certificate of participation” has the meaning given that term
in ORS 288.605.

(c) “Municipality” means a unit of local government within Oregon
including, but not limited to, cities, counties, school districts,
special districts, public corporations and intergovernmental corporations
organized under the authority of ORS 190.010.

(2) Notwithstanding ORS 294.135 or 294.145 or any other law or
charter provision, a municipality may invest proceeds of bonds or
certificates of participation and amounts held in a bond or certificate
of participation payment, reserve or proceeds fund or account in float
agreements, debt service deposit agreements, forward investment
agreements, guaranteed investment contracts or other investment
agreements if the agreements or contracts:

(a) Produce a guaranteed rate of return;

(b) Are fully collateralized by direct obligations of, or
obligations guaranteed by, the United States; and

(c) Require that the collateral be held by the municipality, an
agent of the municipality or a third-party safekeeping agent. [1999 c.559
§21; 2001 c.537 §7] A county
treasurer may invest any sinking fund, bond fund or surplus of funds in
the custody of the county treasurer in master warrants of that county
issued under ORS 287.482 to 287.488. [1959 c.208 §1]All funds received from the United States
Government under the Mineral Leasing Act and Acts amendatory thereof and
distributed to counties pursuant to ORS 293.565 shall be used for the
support of public schools or for the construction and maintenance of
public roads in such counties.(1) The moneys received by each
county under ORS 293.560 shall be divided 75 percent to the road fund and
25 percent to the school fund of the county and, subject to subsection
(2) of this section, the moneys shall be expended as other moneys in
those funds are expended.

(2) The moneys apportioned to the county road fund may be applied
in payment of any outstanding road bonds or may be placed in any county
road bond sinking fund for the purpose of being so applied.

(3) Notwithstanding the division of receipts specified in
subsection (1) of this section, in any county east of the summit of the
Cascade Mountains with a population of less than 9,000 and more than
6,500, according to the 1990 federal decennial census, moneys from the
road fund in excess of $2 million may be transferred to the school fund
when the amount of money credited to the road fund under subsection (1)
of this section exceeds the amount needed for county roads, as determined
by the board of county commissioners. Any amount received by a school
district from the school fund of the county that is in excess of the 25
percent required under subsection (1) of this section may not be
considered as a receipt that would reduce the district’s apportionments
from the State School Fund.

(4) Notwithstanding the division of receipts specified in
subsection (1) of this section, in any county east of the summit of the
Cascade Mountains with a population of less than 58,000 and more than
55,000, according to the 1990 federal decennial census, if the moneys
credited to the road fund under subsection (1) of this section exceed the
amount needed for county roads, as determined by the county governing
body, the portion of such moneys in excess of an amount specified by the
county governing body may be transferred to the school fund of the county
or may be transferred directly to the school districts of the county in
accordance with procedures established by the county governing body. The
county governing body may distribute moneys under this subsection among
the several school districts without regard to the percentage of the
resident average daily membership in each school district. Moneys
transferred under this subsection may be transferred upon the condition
that any school district receiving a share of such moneys must use the
moneys only for a purpose described in ORS 328.205 (1)(a) or (c). Any
amount received by a school district from the county under this
subsection that is in excess of the 25 percent required under subsection
(1) of this section may not be considered as a receipt that would reduce
the district’s apportionments from the State School Fund.

(5) Notwithstanding the division of receipts specified in
subsection (1) of this section, in any county east of the summit of the
Cascade Mountains with a population of less than 6,500, according to the
1990 federal decennial census, moneys received by the county under ORS
293.560 may be divided between the road fund and the school fund of the
county as specified under an agreement between the county governing body
and the education service district board of the county that provides for
a different apportionment of those moneys. Any amount received by a
school district from the school fund of the county that is in excess of
the 25 percent required under subsection (1) of this section may not be
considered as a receipt that would reduce the district’s apportionments
from the State School Fund.

(6) Notwithstanding the division of receipts specified in
subsection (1) of this section, in any county west of the summit of the
Cascade Mountains with a population of less than 19,500 and more than
6,500, according to the 1990 federal decennial census, moneys from the
road fund in excess of $1 million may be transferred to the school fund
when the amount of money credited to the road fund under subsection (1)
of this section exceeds the amount needed for county roads, as determined
by the board of county commissioners. Any amount received by a school
district from the school fund of the county that is in excess of the 25
percent required under subsection (1) of this section may not be
considered as a receipt that would reduce the district’s apportionments
from the State School Fund.

(7) As used in subsections (3) to (6) of this section, “summit of
the Cascade Mountains” has the meaning for that term provided in ORS
477.001. [Amended by 1969 c.327 §1; 1971 c.539 §1; 1977 c.776 §1; 1981
c.342 §1; 1987 c.315 §1; 1989 c.579 §1; 1991 c.309 §1; 2003 c.226 §21](1) It shall be lawful to loan money from any fund to any other
fund of the municipal corporation whenever the loan is authorized by
official resolution or ordinance of the governing body. The loans shall
be made in compliance with the applicable requirements and limitations of
this section. Loans made under this section shall not be made from:

(a) Debt service reserve funds created to provide additional
security for outstanding bonds or other borrowing obligations that the
municipal corporation has covenanted with the holders of such bonds or
other borrowing obligations to maintain at certain specified levels.
However, nothing in this paragraph is intended or shall be construed to
prohibit loans from any such debt service reserve fund to the extent that
the aggregate outstanding amount of the loans does not exceed the amount
by which the amount in such debt service reserve fund exceeds the amount
the municipal corporation has covenanted to maintain in the reserve fund
with the holders of the related bonds or other borrowing obligations;

(b) Debt service funds created to account for moneys needed to make
annual debt service payments on outstanding bonds or other borrowing
obligations; or

(c) Moneys credited to any fund when, under applicable
constitutional provisions, the moneys are restricted to specific uses
unless the purpose for which the loan is to be made is a use allowed
under such constitutional provisions.

(2) The resolution or ordinance authorizing any interfund loan
permitted under this section shall:

(a) State the fund from which the loan is to be made, the fund to
which the loan is to be made, the purpose for which the loan is to be
made and the principal amount of the loan.

(b) If the interfund loan is a capital loan, set forth a schedule
under which the principal amount of the loan, together with interest
thereon at the rate provided for in paragraph (c)(B) of this subsection,
is to be budgeted and repaid to the lending fund. The schedule shall
provide for the repayment in full of the loan over a term not to exceed
five years from the date the loan is made.

(c) If the interfund loan is a capital loan, provide that the loan
shall bear interest at an annual rate equal to:

(A) The rate of return on moneys invested in the local government
investment pool under ORS 294.805 to 294.895, as reported under ORS
294.875, immediately prior to the adoption of the ordinance or resolution
authorizing the loan; or

(B) Such other rate as the governing body may determine.

(d) If the interfund loan is an operating loan, provide that the
money loaned shall be budgeted and repaid to the fund from which the
money was borrowed by the end of the ensuing year or ensuing budget
period.

(3) The payment of any operating loans not repaid in the year or
budget period in which the operating loan was made shall be budgeted as a
requirement in the ensuing year or ensuing budget period.

(4) It shall be lawful to commingle cash balances of funds so long
as all such fund moneys are segregated in the budget and accounting
records.

(5) As used in this section:

(a) “Capital loan” means any interfund loan, or portion thereof,
made for the purpose of financing the design, acquisition, construction,
installation or improvement of real or personal property and not for the
purpose of paying operating expenses.

(b) “Operating loan” means any interfund loan, or portion thereof,
that is not a capital loan, including any interfund loan, or portion
thereof, made for the purpose of paying operating expenses. [1963 c.576
§§27b,27c; 1979 c.310 §7; 1999 c.632 §13; 2001 c.135 §23] (1) A municipal corporation may
establish by ordinance or resolution one or more internal service funds.
The ordinance or resolution creating the fund shall set forth in detail
the following:

(a) The appropriation or appropriations to be charged in order to
provide the initial money for financing the fund;

(b) The object or purpose of the fund;

(c) The methods for controlling of expenditures and encumbering of
such funds; and

(d) The sources from which the fund shall be replenished.

(2) No person shall expend or encumber or authorize expenditure or
encumbrance from funds created in accordance with subsection (1) of this
section in excess of the balance of that fund, or for a purpose for which
there is no appropriation or source of reimbursement authorized at that
time.

(3) The anticipated expenditure for the ensuing year or ensuing
budget period from an internal service fund created in accordance with
subsection (1) of this section shall be budgeted as any other fund in
accordance with ORS 294.305 to 294.565, appropriations shall be made for
each internal service fund in accordance with ORS 294.435 and
expenditures from the internal service fund shall be regulated thereby.

(4) Notwithstanding the limitations in ORS 294.305 to 294.565
applicable to increasing the appropriations of funds during the current
year or current budget period, the governing body may increase
appropriations of the internal service funds by ordinance or resolution.

(5) The charges for services shall be computed to cover all costs
for such services and the charges shall be periodically revised to
eliminate any element of profit or loss. [1963 c.576 §30; 1975 c.319 §1;
1997 c.308 §26; 2001 c.135 §24]
Subject to the provisions contained in the charter of any city or county
or in any law relating to municipal corporations, when the necessity for
maintaining any fund of the municipal corporation has ceased to exist and
a balance remains in the fund, the governing body shall so declare by
ordinance or other order and upon such declaration such balance shall
forthwith be transferred to the general fund of the municipal corporation
unless other provisions have been made in the original creation of the
fund. [1963 c.576 §31](1) Notwithstanding requirements as to
estimates of and limitation on expenditures, the governing body of any
municipal corporation may make a supplemental budget for the fiscal year
or budget period for which the regular budget has been prepared under one
or more of the following circumstances:

(a) An occurrence or condition which had not been ascertained at
the time of the preparation of a budget for the current year or current
budget period which requires a change in financial planning.

(b) A pressing necessity which was not foreseen at the time of the
preparation of the budget for the current year or current budget period
which requires prompt action.

(c) Funds were made available by another unit of federal, state or
local government and the availability of such funds could not have been
ascertained at the time of the preparation of the budget for the current
year or current budget period.

(d) A request for services or facilities, the cost of which shall
be supplied by a private individual, corporation or company or by another
governmental unit and the amount of the request could not have been
accurately ascertained at the time of the preparation of the budget for
the current year or current budget period.

(e) Proceeds from the involuntary destruction, involuntary
conversion, or sale of property has necessitated the immediate purchase,
construction or acquisition of different facilities in order to carry on
the governmental operation.

(f) Ad valorem property taxes are received during the fiscal year
or budget period in an amount sufficiently greater than the amount
estimated to be collected that the difference will significantly affect
the level of government operations to be funded by those taxes as
provided in the budget for the current year or current budget period.

(g) A local option tax described in ORS 294.437 is certified for
extension on the assessment and tax roll under ORS 310.060 for the fiscal
year or budget period in which the local option tax measure is approved
by voters.

(2) A supplemental budget may not extend beyond the end of the
fiscal year or budget period during which it is submitted.

(3) When the estimated expenditures contained in a supplemental
budget for a fiscal year or budget period differ by less than 10 percent
of any one of the individual funds contained in the regular budget for
that fiscal year or budget period that is being changed in the
supplemental budget, the governing body of the municipal corporation may
adopt the supplemental budget at a regular meeting of the governing body.
Notice of such regular meeting, including sufficient detail on revenues
and expenditures, shall be published by one or more of the methods
permitted under ORS 294.311 (34) not less than five days prior to the
meeting. Following such meeting, the governing body shall make additional
appropriations and may thereafter make additional expenditures as
authorized by such appropriations.

(4) When the estimated expenditures contained in a supplemental
budget for a fiscal year or budget period differ by 10 percent or more of
any one of the individual funds contained in the regular budget for that
fiscal year or budget period that is being changed in the supplemental
budget, the supplemental budget, or a summary thereof, shall be
published, or, in counties having a tax supervising and conservation
commission, shall be submitted to the tax supervising and conservation
commission within the county. The governing body, or, where applicable,
the tax supervising and conservation commission shall then hold a public
hearing on the supplemental budget. Publication of the budget and notice
of the hearing shall be given in the manner provided in ORS 294.421.
Following such hearing, the governing body shall make additional
appropriations and may thereafter make additional expenditures as
authorized by such appropriations.

(5) Except as provided in ORS 294.437, the making of a supplemental
budget does not authorize the governing body to increase the municipal
corporation’s total ad valorem property taxes above the amount or rate
published with the regular budget and certified to the assessor under ORS
310.060 in conjunction with the regular budget for the fiscal year or for
each fiscal year of the budget period to which the supplemental budget
applies. [1963 c.576 §32; 1979 c.689 §1; 1991 c.459 §9; 1991 c.573 §1;
1993 c.270 §5; 1997 c.308 §27; 1997 c.541 §333; 1999 c.632 §14; 2001
c.104 §106; 2001 c.135 §25; 2001 c.753 §6](1) A municipal
corporation that has outstanding limited tax bonds, as defined in ORS
288.150, that were issued pursuant to ORS 287.049 shall budget and
appropriate, subject to any applicable covenants or agreements that limit
payment of certain obligations to particular sources of funds, amounts
sufficient to pay, in each succeeding fiscal year or budget period, debt
service on the bonds. However, this section does not require the
municipal corporation to adopt a supplemental budget to pay the principal
and interest coming due on limited tax bonds in the fiscal year or budget
period in which the bonds are authorized and issued.

(2) A municipal corporation is not required to adopt a supplemental
budget to:

(a) Expend during the current year or current budget period
proceeds of the sale of the following bonds or other obligations:

(A) Bonds that are issued under the Uniform Revenue Bond Act, ORS
288.805 to 288.945, for which the referral period described in ORS
288.815 ended after the preparation of the budget for the current year or
current budget period.

(B) Bonds or other obligations that were approved by the electors
during the current year or current budget period.

(C) Bonds or other obligations issued during the current year or
current budget period to refund previously issued bonds or obligations.

(b) Expend during the current year or current budget period other
funds to pay the principal and interest coming due on bonds or other
obligations listed in paragraph (a) of this subsection.

(c) Expend assessments or other revenues to redeem bonds or other
obligations that are payable from the assessments or other revenues, when
the assessments or other revenues are received as a result of prepayments
or other unforeseen circumstances. [1993 c.97 §4; 1995 c.333 §9; 1997
c.308 §28; 2001 c.135 §26; 2003 c.195 §26; 2005 c.443 §28](1) Any ad valorem property tax made contrary to
the provisions of ORS 294.305 to 294.565 or any other law relating to the
making of tax levies shall be voidable as provided in subsection (2) of
this section and ORS 310.070.

(2) The county assessor, county court, board of county
commissioners, the Department of Revenue, tax supervising and
conservation commission or 10 or more interested taxpayers may appeal to
the regular division of the Oregon Tax Court and such appeal shall be
perfected in the following manner only:

(a) Within 30 days after the certification of ad valorem property
taxes is filed with the county assessor under ORS 310.060, the appealing
party shall file a complaint with the clerk of the tax court at its
principal office in Salem, Oregon. Such filing in the tax court shall
constitute the perfection of the appeal. Service upon the Department of
Revenue shall be accomplished by the clerk of the tax court filing a copy
of the complaint with the Director of the Department of Revenue and with
the secretary or clerk of the municipal corporation. When a complaint is
filed under this section by 10 or more interested taxpayers, if following
perfection of the court’s jurisdiction to hear the case:

(A) One or more of the taxpayers withdraws from the proceedings,
and five or more of the taxpayers do not withdraw, the court shall
nevertheless retain jurisdiction to hear the matter; or

(B) One or more of the taxpayers withdraws from the proceedings,
and fewer than five of the taxpayers remain parties and do not withdraw,
the court shall not retain jurisdiction to hear the matter but shall
dismiss the case with prejudice.

(b) The complaint shall state the facts and the grounds upon which
the plaintiff contends the tax should be voided or modified. The case
shall proceed thereafter in the manner provided in ORS 305.405 to 305.494.

(3) If the tax court finds that the budget and the tax
certification in question were not prepared and made in substantial
compliance with ORS 294.305 to 294.565 and any other applicable law
relating to the making of ad valorem property taxes, it shall declare
void or modify any such tax and shall direct that such action be taken,
all as in the circumstances it shall deem appropriate. [1963 c.576 §33;
1967 c.78 §12; 1977 c.250 §1; 1993 c.270 §6; 1995 c.79 §103; 1995 c.650
§101; 1997 c.541 §334; 1999 c.340 §7; 1999 c.632 §15; 2005 c.225 §1]The department’s authority pursuant to ORS
294.495 to 294.510 shall be limited to obtaining compliance with ORS
294.305 to 294.565 and shall not interfere in any way with the fiscal
policy of a municipal corporation as established by its governing body or
budget committee. [1963 c.576 §34c]
Notwithstanding ORS 294.695, the Department of Revenue shall:

(1) Construe ORS 294.305 to 294.565 and any other law relating to
the making of tax levies when requested by any interested person or by
any officer acting under such laws and shall instruct such officers as to
their duties under such laws. Such officers shall submit to the
department all questions arising with them which affect the construction
of laws of this state relating to local budgetary procedures.

(2) Make such rules and regulations and prescribe such forms as it
considers proper to effectually carry out the purposes of ORS 294.305 to
294.565 or any other law relating to the making of tax levies. [1963
c.576 §34]The Department of Revenue may, on petition by 10
interested taxpayers or municipal corporation, issue a declaratory ruling
with respect to the validity or applicability to any person, municipal
corporation or state of facts of any rule or regulation promulgated by
it. The department shall prescribe by rule the form, content and
procedure for submission, consideration and disposition of such
petitions. Full opportunity for hearing shall be afforded to interested
parties. A declaratory ruling shall bind the department and all parties
to the proceedings on the state of facts alleged, unless it is altered or
set aside by a court. A ruling shall be subject to review in the Oregon
Tax Court in the manner provided by ORS 294.515 and shall be subject to
the same limitations as appeals provided in ORS 294.515. [1963 c.576 §34d](1) The Division of Audits created by ORS 297.020
shall notify the municipal corporation and Department of Revenue of any
irregularities in the budget procedure of the municipal corporation which
is brought to its attention in the audits prepared by the division or
brought to its attention in audits which are required to be filed with
the division.

(2) If the Department of Revenue finds from the information
submitted by the Division of Audits pursuant to subsection (1) of this
section that ORS 294.305 to 294.565 have not been followed, the
Department of Revenue shall order the municipal corporation to correct
its procedures in the preparation of its subsequent budgets. The order
shall set forth the irregularities and the steps necessary to prevent
such irregularities from happening in the future. Such order shall be a
public record. [1963 c.576 §34a]
(1) The Department of Revenue may order a municipal corporation to revise
its budget procedures to conform with ORS 294.305 to 294.565 when
irregularities in the procedures of the municipal corporation are called
to its attention.

(2) The Department of Revenue may require the municipal corporation
in its order to file for inspection a copy of the budget document at any
stage in the procedure of the budget preparation.

(3) If the municipal corporation or officer or employee thereof
neglects or refuses to comply with the department order, the department
may apply to the judge of the Oregon Tax Court for an order returnable
within five days from the date thereof, to compel such municipal
corporation, public officer or employee to comply with such order or to
show cause why the order should not be complied with.

(4) Any order issued by the judge pursuant to subsection (3) of
this section may be appealed from as provided by ORS 305.445, except that
the appeal shall be filed within 10 days of the entering of the order.
The Supreme Court shall hear and determine the appeal expeditiously, as
may be appropriate for the timely and orderly completion of the budgetary
process of the municipal corporation and the extension of its levy upon
the assessment and tax roll.

(5) The remedy provided in this section is cumulative and shall not
preclude the department from exercising any power or right otherwise
provided by law. [1963 c.576 §34b; 1977 c.221 §1]Any municipal corporation aggrieved by and directly affected by an
order of the Department of Revenue relating to the preparation of budgets
or the extension of any tax levy may appeal to the Oregon Tax Court in
the manner provided by ORS 305.404 to 305.560. [1963 c.576 §33a; 1979
c.689 §2; 1995 c.650 §102] The appeal
filed with the Oregon Tax Court pursuant to ORS 294.485, 294.500 and
294.515 shall have priority over all other cases pending before the
Oregon Tax Court and shall be heard and decided as soon after coming to
issue as is reasonably possible. [1963 c.576 §33b](1) Any municipal corporation, by ordinance or resolution of its
governing body, may establish one or more reserve funds to hold moneys to
be accumulated and expended for the purposes specified in ORS 280.050,
without submitting the question of establishing the reserve fund to a
vote of the electors. The municipal corporation may cause to be credited
to any reserve fund all or any portion of the revenues derived from taxes
levied under ORS 280.060 and any other taxes, charges or revenues as the
governing body may determine. The municipal corporation may also limit
the crediting of such taxes, charges or revenues to a reserve fund to a
specific period of time designated by the governing body.

(2) Not less frequently than every 10th anniversary of the date
upon which a reserve fund is established under subsection (1) of this
section, the governing body of the municipal corporation shall review the
reserve fund and determine whether the fund will be continued or
abolished. When the governing body determines, by resolution, that it is
no longer necessary to maintain such a reserve fund:

(a) Commencing with the next succeeding fiscal year, the political
subdivision shall discontinue the levy of any taxes under ORS 280.060
that would otherwise be required to be credited to such fund; and

(b) There shall be transferred to the general fund or any other
fund of the political subdivision that the governing body determines is
appropriate:

(A) Any unexpended balance in the fund to be abolished that is not
required to be held for subsequent expenditure for the purposes for which
the fund was established; and

(B) Any subsequent receipts from tax levies that are otherwise
required to be credited to such fund, together with any penalties and
interest thereon.

(3) This section does not apply to system development charges
imposed under ORS 223.297 to 223.314, and no system development charges
shall be credited to any reserve fund established under this section.
[1997 c.308 §2; 1999 c.632 §16](1) On or before July 15 of each
year, or upon such other date as the Department of Revenue shall
designate, each civil subdivision in the state that does not levy an ad
valorem property tax, that is subject to the Local Budget Law and that
prepares an annual budget shall file with the Department of Revenue a
copy of the resolution adopting the budget and of the resolution making
appropriations.

(2) On or before July 15 of the first fiscal year of the budget
period, or upon such other date as the Department of Revenue shall
designate, each civil subdivision in the state that does not levy an ad
valorem property tax, that is subject to the Local Budget Law and that
prepares a biennial budget shall file with the Department of Revenue a
copy of the resolution adopting the budget and of the resolution making
appropriations.

(3) Each municipal corporation subject to the Local Budget Law that
certifies an ad valorem property tax shall file with the county assessor
as provided in ORS 310.060 the following:

(a) Two copies each of the notice required to be filed under ORS
310.060 and the categorization certification.

(b) Two copies of a statement confirming the ad valorem property
taxes approved by the budget committee.

(c) Two copies each of the following ordinances or resolutions: to
adopt the budget; to make the appropriations; to itemize and categorize
the taxes; and to certify the taxes.

(4) As soon as received, the county assessor shall forward one copy
of each of the documents listed in subsection (2) of this section to the
Department of Revenue.

(5) Each civil subdivision and municipal corporation that is
subject to the Local Budget Law shall retain a true copy of its budget
for, if an annual budget is prepared, two years following the end of the
fiscal year or, if a biennial budget is prepared, two budget periods
following the budget period for which the biennial budget was prepared.
During this period, the civil subdivision or municipal corporation shall
send a copy of the budget to the county assessor, Department of Revenue
or the Division of Audits if requested to do so by one of those entities.
[Formerly 294.420; 1965 c.451 §11; 1973 c.333 §1; 1977 c.884 §2; 1985
c.319 §1; 1995 c.79 §104; 1997 c.154 §4; 1997 c.541 §336; 2001 c.135 §27]If any city shall fail to file its documents or
reports required by ORS 294.555 or 297.405 to 297.555 with the Department
of Revenue or Secretary of State, as the case may be, within 30 days
after a request therefor has been made by certified mail to the city, the
Department of Revenue or Secretary of State may certify to the officer
responsible for disbursing funds to cities under ORS 323.455, 366.785 to
366.820 and 471.810 the fact of such failure to file the documents or
reports. Notwithstanding the requirements under ORS 323.455, 366.785 to
366.820 and 471.810 for prompt payment of funds due a city, such officer
shall withhold payment to the city of any funds ordinarily payable to it
under ORS 323.455, 366.785 to 366.820 and 471.810 until notified by the
Department of Revenue or Secretary of State that the required document or
report has been received as required by law. A copy of such certification
and request shall be furnished the delinquent city. [1973 c.252 §1; 1977
c.774 §18; 1979 c.286 §5]TAX SUPERVISING AND CONSERVATION COMMISSION As used in ORS
294.605 to 294.705, unless the context otherwise requires:

(1) “Commission” means the tax supervising and conservation
commission.

(2) “Commissioner” means a member of the tax supervising and
conservation commission.

(3) “Municipal corporations” means the county, and any city, town,
port, school district, union high school district, road district,
irrigation district, water district, dock commission, and all other
public and quasi-public municipal corporations that have power to levy a
tax within the county.

(4) “Levying board” means the common council, board of
commissioners, board of directors, county court or other managing board
of the county, or of any city, town, port, school district, union high
school district, road district, irrigation district, water district, dock
commission, and of all other public or quasi-public corporations that
have power to levy a tax within the county.

(5) “County court” means the county court or board of county
commissioners of the county.

(6) “Fiscal year” means the calendar year ending on December 31, or
any period of 12 months ending during the calendar year on the last day
of any month other than December.

(7) “Assessor” means the county assessor or other officer charged
by law with the duty of extending taxes upon the assessment and tax roll.

(8) “Current year” means the present year.(1) The governing body of each county with a
population of 500,000 or more inhabitants, based on the most recently
available data published or officially provided by the Portland State
University Population Research Center, shall elect to:

(a) Seek to establish a tax supervising and conservation commission
under ORS 294.710; or

(b) Require each municipal corporation to submit to the county a
copy of the financial summary prepared under ORS 294.386 and made
available to the public under ORS 294.401 (9).

(2) Each municipal corporation required to submit a copy of the
financial summary of the municipal corporation shall comply with the
requirement prior to the date of the first budget committee meeting of
the municipal corporation under ORS 294.401.

(3) The copy of the financial summary submitted to the county under
this section shall be in an electronic format that is compatible with
Internet publication. The county shall publish all financial summaries
received from municipal corporations under this section on the Internet
website of the county. [2005 c.750 §7](1) A tax
supervising and conservation commission shall consist of five members
appointed by the Governor. The commissioners appointed shall be citizens
of the United States and of Oregon and residents in the county for which
they are appointed and shall be electors therein. The commissioners shall
serve wholly without compensation.

(2) Unless sooner removed by the Governor, as provided in this
section, the commissioners shall hold office for a term of four years and
until their successors are appointed and qualified. The term of office of
the members of the commission shall commence on January 1.

(3) The Governor may, for good and sufficient cause, remove any
commissioner at any time and appoint a successor.

(4) In case of death, resignation or inability of any member of the
commission to serve, or of removal of any member of the commission from
office, the Governor shall make an appointment to fill the balance of the
unexpired term of that commissioner. [Amended by 1961 c.644 §2; 1973 c.61
§2; 1991 c.80 §1; 2005 c.750 §3] Before taking office each
commissioner shall take and subscribe the following oath, before an
officer qualified to administer oaths, in substantially the following
form:

___________________________________________________________________________
___State of Oregon   )

                             ) ss.

County of______ )I, ________, being first duly sworn, depose and say that for the
term of ___ year (s), to which I have been appointed as a member of the
tax supervising and conservation commission for ______ County, I will
faithfully and impartially discharge the duties of my said office; that I
will support the Constitution of the United States and the Constitution
of the State of Oregon and all laws passed in pursuance of either; that I
will endeavor to secure economical expenditure of public funds sufficient
in amount to afford efficient and economical administration of government
in the county for which I have been appointed, and in each city, town,
port, school district, union high school district, road district,
irrigation district, water district, dock commission and all other
municipal corporations within the territorial limits of my county; and
that I will perform said duty without fear, favor or compulsion, and
without hope of reward._______________

Subscribed and sworn to before me this ___ day of______, 2__.

_______________Notary Public of Oregon

My commission expires______.

___________________________________________________________________________
___(1) The county court shall furnish an office in the county
courthouse or other convenient place for the use of the commission, as is
furnished to other departments.

(2) The commission may employ and fix the salaries of such clerks
and other assistants as in their judgment shall seem meet and proper to
keep the records of the commission and perform any other service to which
they may be assigned by the commission. Such clerks and assistants shall
be paid out of the general fund of the county in the same manner as other
county officers and employees are paid. The commission shall have
jurisdiction over all municipal corporations in the county subject to the
provisions of the Local Budget Law. If the territory of the municipal
corporation lies in two or more counties, the municipal corporation shall
be within the jurisdiction of the commission if the real market value of
all property subject to taxation by the municipal corporation in a county
having a commission is greater than the real market value of property
subject to taxation by the municipal corporation in any other county.
Real market value is the real market value computed according to ORS
308.207 from the assessment rolls last in the process of collection.
[Amended by 1961 c.678 §3; 1965 c.451 §12; 1969 c.155 §4; 1981 c.623 §1;
1991 c.459 §10] There
hereby is created an account to be known as the tax supervising and
conservation commission account in the general fund of each county
subject to ORS 294.605 to 294.705. The tax supervising and conservation
commission shall on or before April 1 of each year submit certified
budgets for the ensuing fiscal year to the county court or board of
county commissioners. The budget shall contain a complete and detailed
estimate of the proposed expenditures of the commission for all purposes.
Following the receipt of the budget the county court or board of county
commissioners shall include the budget as submitted as a part of the
county budget and shall make an appropriation for the tax supervising and
conservation commission account sufficient to cover the proposed
expenditures, but no appropriation shall be made in any county in any
year for such purpose in excess of $280,000. The county court or board of
county commissioners shall not reduce the amount of the budget as
presented by the tax supervising and conservation commission, within the
amount stated in this section, nor shall it refuse to approve any lawful
request for disbursement of money from the tax supervising and
conservation commission account. [Amended by 1955 c.263 §1; 1961 c.644
§1; 1969 c.363 §1; 1973 c.68 §1; 1975 c.116 §1; 1977 c.88 §1; 1981 c.96
§1; 1985 c.228 §1; 1989 c.222 §1; 1999 c.632 §20] (1) In
each county that has a tax supervising and conservation commission, the
levying boards of all municipal corporations shall on or before May 15 of
each fiscal year or on or before May 15 of the first fiscal year of a
budget period, submit their detailed estimates of the budget deemed
necessary to be expended by the municipal corporations, respectively, for
all purposes for the next ensuing fiscal year or ensuing budget period.
The tax supervising and conservation commission may, if a good and
sufficient reason exists therefor and if application is made to the
commission in writing, grant any municipal corporation such extension of
time for filing its budget as may seem to the commission just and
reasonable.

(2) The budget estimates required by this section to be filed with
the commission shall be in writing and shall be certified to as correct
and shall be so prepared and arranged as to show in plain and succinct
language each particular item of proposed expenditure. There shall be
attached to each budget, and made a part thereof, the levying board’s
estimate of the probable receipts of the municipal corporation from all
other sources than direct tax levy and bond issues during the fiscal
years for which the budget has been prepared. The budget estimates shall
show in parallel columns the actual expenditures for the two fiscal years
next preceding the current year, the estimated expenditures for the
current year and the estimated expenditures for the next ensuing fiscal
year. [Amended by 1961 c.678 §4; 1963 c.576 §37; 1977 c.431 §2; 1991 c.80
§2; 2001 c.135 §28; 2005 c.750 §4] Every levying board shall be entitled to
a hearing by the commission upon the budget submitted by it. The
commission shall set times and places for such hearings, which shall be
open to the public. The commission shall give notice, in such form and
manner as it shall prescribe, of such hearing to every levying body
entitled to such hearing. The levying boards shall meet with the
commission at such times and places fixed by the commission for such
hearings and discuss the budget with the commission.(1) After the hearings
have been held the commission shall carefully consider the proposed
budgets and shall by majority vote of the members of the commission
certify in writing to the levying board of any municipal corporation, on
or before June 25 of each fiscal year, or on or before June 25 of the
first fiscal year of a budget period, any objections which the commission
may have to the adoption of the budget, or any item therein, or any
recommendations which the commission may desire to make regarding the
budget. If the commission does not desire to make any recommendations or
objections, it shall certify that fact to the levying board. The
responsibility of the commission shall be advisory only.

(2) Certification of a budget for a municipal corporation holding
its own hearing shall be made in the same manner as required by
subsection (1) of this section, except that any recommendations or
objections shall be certified to the levying board prior to the date of
the hearing. [Amended by 1961 c.678 §5; 1963 c.576 §38; 1999 c.632 §17;
2001 c.135 §29](1) If in the
examination of any budget of any municipal corporation the commission
finds that any item is an expenditure not authorized by law to be made by
the municipal corporation, the commission may order the item to be
stricken from the budget. The levying board of the municipal corporation
thereupon shall strike the item from the budget and shall not thereafter
levy any tax for the payment of the same.

(2) If, after the hearing, the commission finds that the total
amount of the tax levy of any municipal corporation exceeds the amount
permitted by law or any provision of the Constitution of this state to be
levied by the municipal corporation, the commission shall order that the
total amount of the budget be reduced to within the limits permitted by
law or constitutional limitation, and shall file certified copies of such
order with the county assessor and county clerk. The levying board of the
municipal corporation thereupon shall comply with the order of the
commission by so reducing the total amount of the budget.The commission shall conduct public hearings on all
special tax levies and bond issues proposed for elector approval by the
levying boards. Any levying board proposing to ask elector approval of a
special tax levy or of a bond issue shall notify the commission in
writing of its proposal not less than 30 days prior to the filing date
for the election and set forth its reasons therefor, but the commission
in its discretion may permit such notification to be filed in such
shorter period of time as it sees fit. Upon the receipt of the
notification the commission shall fix the time and place of hearing and
notify the levying board to attend the hearing and discuss the proposed
special tax levy or bond issue with the commission. The hearings provided
for in this section shall be in addition to the regular budget hearings
provided for by ORS 294.640. [Amended by 1999 c.632 §18]The commission shall compile accurate statistical and
other information as to bonded or other indebtedness within the county
and of all municipal corporations within the county and shall keep a
permanent record thereof. The commission shall issue a statement thereof
as of June 30 of each year, in the annual report of the commission. The
statement shall show also the interest charges for the ensuing year on
account of such indebtedness and the amount of principal to be retired in
that year.The levying board of each municipal corporation
under the jurisdiction of the commission shall annually submit a copy of
the full report of its independent auditor under ORS 297.425, or a copy
of the financial statements submitted to the Secretary of State under ORS
297.435, as soon as practicable after the close of each fiscal year.
[Amended by 1999 c.632 §19](1) The commission may inquire into the management, books of
account and systems employed, of each municipal corporation, and of each
department thereof within its respective county.

(2) Notwithstanding ORS 294.495 (2), the commission may prescribe
such rules and regulations as are considered proper to effectually carry
out the purposes of ORS 294.305 to 294.705. In any case where rules
adopted pursuant to this subsection conflict with rules adopted by the
Department of Revenue, rules adopted by the department shall prevail.
[Amended by 1975 c.669 §1] The commission
may call joint meetings of the levying boards subject to ORS 294.605 to
294.705 and may require their attendance for the purpose of discussing
problems common to two or more municipal corporations under the
jurisdiction of the commission, including long range financial planning,
building programs, special levies, bond issues and cooperative ventures
such as joint purchasing.If at any time the
commission finds that any municipal corporation, or public official
thereof, has expended any public money in excess of the amounts or for
any other or different purpose or purposes than is authorized by law, the
commission shall certify to the district attorney for the county that
fact, and the district attorney shall proceed for the recovery thereof as
by law provided. A complete and comprehensive
report of the budgets as presented by the several levying boards, as
provided by ORS 294.635 to 294.650, and of any and all other information
pertaining to the administration of government in the county and to the
expenditures and conservation of public funds, shall be made annually by
the commission and published in document form for the information of the
electors and taxpayers. Copies of the report shall be filed with the
Governor and with the county court.
The public shall have access to the records and files of the commission
at the office of the commission at all times during office hours.The Attorney General shall be the legal advisor and counsel
of the commission and shall represent it in all suits and actions and
other legal proceedings in any court in this state. The Attorney General
shall receive compensation for any services rendered in such capacity.
[Amended by 1969 c.363 §2; 1973 c.775 §6] The penalties provided
for in ORS 294.990 (2) and (3) shall be recovered by actions at law
instituted in the name of the commission by the district attorney. Any
proceedings against a municipal corporation shall be taken against the
municipal corporation, as such, and the penalty when recovered shall be
deducted from any money in the county treasury to the credit of the
municipal corporation. Any proceeding against a levying board shall be
taken against the individual members of the levying board who are
responsible for the failure, neglect or refusal to comply. [Amended by
1971 c.267 §14] There is established
the tax supervising and conservation commission fund in the county
treasury. The fund shall consist of any penalties recovered under ORS
294.700.(1) Any county with a population of less than 500,000
inhabitants, based on the most recently available data published or
officially provided by the Portland State University Population Research
Center, may establish, with the approval of a majority of its electors
voting on the question, a tax supervising and conservation commission
that substantially conforms to the provisions of ORS 294.605 to 294.705.

(2) Any county with a population of 500,000 or more inhabitants,
based on the most recently available data published or officially
provided by the Portland State University Population Research Center, may
establish a tax supervising and conservation commission that
substantially conforms to the provisions of ORS 294.605 to 294.705
provided the county obtains the approval of a majority of the members of
its governing body voting on the question.

(3) Notwithstanding ORS 294.630, a county under this section may
establish its own maximum annual appropriation to a tax supervising and
conservation commission in the ordinance creating the commission. [1977
c.431 §1; 1991 c.80 §3; 2005 c.750 §5]LOCAL GOVERNMENT EMPLOYER BENEFIT TRUST FUND For the purposes of
ORS 294.725 to 294.755:

(1) “Account balance” means the amount a political subdivision has
paid into the Local Government Employer Benefit Trust Fund less the
amount of unemployment benefits paid by the Employment Department on
behalf of the political subdivision.

(2) “Aggregate benefit cost rate” means the total unemployment
benefits paid during a cost rate period that is attributable to wages
paid by all political subdivisions divided by the gross wages paid to
individuals subject to ORS chapter 657 during the cost rate period by all
political subdivisions. The rate shall be expressed as a percent and
rounded to the nearest one-tenth of one percent.

(3) “Benefit cost rate” means the total unemployment benefits paid
during a cost rate period that is attributable to wages paid by a
political subdivision divided by gross wages paid to individuals subject
to ORS chapter 657 during the cost rate period by the political
subdivision. The rate shall be expressed as a percent and carried to four
decimal places.

(4) “Cost rate period” means the prior three-year period ending
June 30 of each year except that with respect to June 30, 1977, the cost
rate period is the two-year period ending June 30, 1977.

(5) “Account reserve ratio” means the account balance of the
political subdivision on June 30, divided by gross wages paid to
individuals subject to ORS chapter 657 during the four calendar quarters
ending on such June 30 by such political subdivision. The ratio shall be
expressed as a percent carried to four decimal places.

(6) “Department” means the Employment Department.

(7) “Director” means the Director of the Employment Department.

(8) “Erroneous benefit payments” means any amount paid to an
individual to which the individual is not entitled due to:

(a) Any error, whether or not due to misrepresentation or
nondisclosure of material fact by the claimant; or

(b) An initial decision to pay benefits is subsequently reversed by
a decision finding the individual was not eligible for such benefits and
such decision has become final.

(9) “Political subdivision” means a political subdivision as
defined by ORS 657.097.

(10) “Local Government Employer Benefit Trust Fund” or “fund” means
the fund created by ORS 294.730.

(11) “Unemployment benefits” or “benefits” means regular and
extended benefits paid under ORS chapter 657. [1977 c.491 §3; 1989 c.135
§1; 1993 c.344 §9](1) There is created a Local Government
Employer Benefit Trust Fund, separate and distinct from the General Fund.
The State Treasurer shall be the custodian of such fund and the fund
shall consist of:

(a) All moneys received from political subdivisions under the
provisions of ORS 293.701, 294.725 to 294.755 and 657.513;

(b) Interest earned upon any moneys in the fund;

(c) Moneys transferred from other funds to cover shortages in the
fund; and

(d) All other moneys received from a political subdivision to be
applied against benefit payment charges for any period the political
subdivision has requested the Employment Department to reimburse the
Unemployment Compensation Trust Fund on its behalf.

(2) Moneys in the fund are continuously appropriated to the
department and, notwithstanding ORS 657.505, shall be the sole source of
funds for payment to the Unemployment Compensation Trust Fund for
benefits attributable to a political subdivision during its period of
participation in the fund and repayment of advances and the interest
thereon due to any shortages in the fund.

(3) Interest earned upon any moneys in the fund is continuously
appropriated to the department for the payment of:

(a) Administrative expenses of ORS 293.701, 294.725 to 294.755 and
657.513 and expenses incurred in the investment of the fund in the amount
authorized by ORS 293.718;

(b) Erroneous benefit payments determined during the period in
which a political subdivision is a participant in the fund; and

(c) Benefits attributed to a political subdivision that has ceased
to exist, has no positive account balance and has no successor.

(4) When insufficient interest exists to pay obligations under
subsection (3) of this section, such amounts may be paid from the fund.
When the fund again begins earning interest, all obligations paid
pursuant to this subsection shall be repaid to the fund before any
allocation is made under subsection (5) of this section.

(5) As soon as possible after the end of each calendar quarter, the
State Treasurer shall review the applicable quarterly interest earnings
and payments made therefrom and distribute any excess interest earnings
to the political subdivision accounts that had a positive balance on the
last day of the applicable quarter. Such allocation shall be in a ratio
that the political subdivision positive account balance on the last day
of the calendar quarter bears to the total balance of all political
subdivisions with positive account balances on the last day of the
calendar quarter. The amounts distributed for the quarter ending June 30
shall be included in the account reserve ratio determination for such
June 30.

(6) The Director of the Employment Department is authorized to
requisition from the fund such amounts determined to be necessary for the
payment of benefits attributable to wages of political subdivisions.

(7) Interest accrued each quarter on advances pursuant to
subsection (2) of this section shall be allocated each quarter to those
political subdivision accounts with a negative balance on the last day of
such calendar quarter. The allocation shall be in a ratio that the
political subdivision negative account balance on the last day of the
calendar quarter bears to the total balance of all political subdivisions
with negative account balances on the last day of the calendar quarter.
The amounts allocated for the quarter ending June 30 shall be included in
the account reserve ratio determination for such June 30. [1977 c.492 §4;
1983 c.53 §1; 1989 c.135 §2; 1989 c.966 §22](1) A political
subdivision shall pay into the fund a percentage of the gross wages it
pays to individuals in employment subject to ORS chapter 657 except that
minor adjustments to wages in a calendar quarter on which payments have
previously been made shall not result in either a credit to the employer
or an additional amount due the fund. Such percentage shall be as
determined in subsections (2) to (6) of this section.

(2) As soon as possible after June 30, 1977, and each June 30
thereafter, the Employment Department shall for each political
subdivision determine the benefit cost rate and the account reserve ratio
applicable as of that June 30.

(3) The percentage rate assigned to a political subdivision whose
account has been potentially chargeable with benefits for each of the
last four calendar quarters ending on the June 30 immediately preceding
the determination shall be the benefit cost rate of the political
subdivision plus one-third of the difference obtained by subtracting the
political subdivision’s account reserve ratio from 1.5 times the
political subdivision’s benefit cost rate. The resulting rate shall be
rounded up to the nearest one-tenth of one percent. A political
subdivision’s rate shall be not less than one-tenth of one percent nor
more than five percent.

(4) The percentage rate assigned to a political subdivision whose
account has not been potentially chargeable with benefits for each of the
last four quarters ending on the immediately preceding June 30 shall be
the greater of one percent or 1.5 times the aggregate benefit cost rate
for the cost rate period ending on that June 30.

(5) Notwithstanding subsections (3) and (4) of this section, a
local government employer with an account balance on June 30 that is less
than five percent of the taxable wage base currently in effect shall not
be assigned a rate of:

(a) Less than two percent if the payroll of the employer was less
than $25,000 during the four most recently completed calendar quarters; or

(b) Less than one percent if the payroll of the employer was
$25,000 or more but less than $50,000 during the four most recently
completed calendar quarters; or

(c) Less than one-half of one percent if the payroll of the
employer was $50,000 or more but less than $100,000 during the four most
recently completed calendar quarters; or

(d) Less than two-tenths of one percent if the payroll of the
employer was $100,000 or more during the four most recently completed
calendar quarters.

(6) Percentages determined in subsections (3) to (5) of this
section shall be applicable for the four-calendar-quarter period
beginning July 1 of the year immediately following the determination.

(7) In addition to the payment made into the fund under subsections
(1) to (6) of this section, any political subdivision which has a
negative account balance at the end of a calendar quarter and had a
negative account balance at the end of each of the three immediately
preceding calendar quarters shall make additional payments into the fund
during each of the next four calendar quarters. The additional payment
required shall be computed as follows with all computations omitting
cents:

(a) Multiply the gross payroll reported by the employer during the
four most recent calendar quarters by the current percentage rate of
payment into the fund.

(b) Subtract the amount of benefits attributable to the employer
that was reimbursed from the fund during the most recent four calendar
quarters from the product determined in paragraph (a) of this subsection.

(c) If the remainder obtained in paragraph (b) of this subsection
is more than zero, subtract the remainder from the negative balance of
the account.

(d) If the remainder in paragraph (b) of this subsection is zero or
less, make no adjustment to the amount of the negative balance of the
account.

(e) Divide the amounts determined in either paragraph (c) or (d) of
this subsection by four. The resulting amount shall be the additional
payment required for each quarter.Only one such determination shall be made in any four-quarter period. If
the negative balance is eliminated before the end of the four quarters in
which the additional payments were determined necessary, no further
additional payments will be required under this subsection.

(8) During the first four calendar quarters in which a political
subdivision is a participant in the fund, additional payments shall be
required if the account balance of the political subdivision is negative
at the end of any of the four quarters. The additional payment shall be
determined in the same manner described in subsection (7) of this section
except that the computation in subsection (7)(a) and (b) of this section
shall include only those quarters in which the political subdivision was
a participant in the fund.

(9) Employers subject to the provisions of this section may request
a refund of amounts in excess of the amount required to obtain the
minimum contribution rate. [1977 c.491 §5; 1981 c.5 §1; 1983 c.53 §2;
1989 c.135 §3; 1993 c.778 §3](1) The Employment Department shall refund to a
political subdivision electing to cancel its request as provided by ORS
657.513 any account balance remaining after the department has made all
payments to the Unemployment Compensation Trust Fund required to be made
on behalf of the political subdivision.

(2) A political subdivision canceling a request having a negative
account balance shall make such additional payments into the fund as
necessary to maintain a zero account balance.

(3) Erroneous benefit payments determined after June 30, 1978, and
attributable to wages paid by a political subdivision making payments
under ORS 294.735 shall be excluded from the account balance
determination and the determination of the benefit cost rate of that
political subdivision. [1977 c.491 §§6,7; 1989 c.135 §4]The Employment Department shall investigate the
experience of political subdivision participation in operations of the
fund, including the relationship of fund receipts to fund expenditures
and report the results of the investigation to the legislature at least
30 days prior to the date a regular session of the legislature is
scheduled to convene. The report shall include any recommended changes in
the provisions of ORS 293.701, 294.725 to 294.755 and 657.513. [1977
c.491 §8; 1989 c.135 §5](1) The experience and liabilities of a
political subdivision that has ceased to exist shall be acquired by the
successor political subdivision.

(2) Notwithstanding subsection (1) of this section, all units of
government who are parties to an agreement to form a political
subdivision shall be liable for any unpaid assessments of that political
subdivision and for such amounts as necessary to maintain the account
balance of the political subdivision, if no longer in existence, at zero
dollars. [1977 c.491 §9]
Political subdivisions electing to participate in the Local Government
Employer Benefit Trust Fund shall pay into the fund on a quarterly basis
and are subject to all remedies for the collection of delinquent taxes
provided in ORS chapter 657. [1977 c.491 §10]LOCAL GOVERNMENT INVESTMENT POOL As used in ORS
294.805 to 294.895:

(1) “Board” means the Oregon Short Term Fund Board.

(2) “Council” means the Oregon Investment Council created under ORS
293.706.

(3) “Funds” means funds under the control or in the custody of any
local government official by virtue of office that are not required to
meet current demands.

(4) “Investment officer” means the State Treasurer in capacity as
investment officer for the council and the investment pool.

(5) “Investment pool” means the aggregate of all funds from local
government officials that are placed in the custody of the investment
officer for investment and reinvestment as provided under ORS 294.805 to
294.895.

(6) “Local government official” means each officer or employee of
any agency, political subdivision or public corporation of this state,
including the Oregon State Bar, who by law is made the custodian of or
has control of any funds. [1973 c.748 §1; 1981 c.880 §14; 1987 c.381 §1](1) With the consent of the governing body, a local government
official may place in the aggregate up to $30 million of its funds in the
investment pool, or, if the assets of the investment pool have been
transferred pursuant to ORS 294.882, in the state investment fund
established pursuant to ORS 293.721, for investment and reinvestment by
the investment officer as provided under ORS 293.701 to 293.820 or
294.805 to 294.895, as the case may be. The $30 million limitation stated
in this section shall not apply either to funds of a governing body which
are placed in the investment pool on a pass-through basis or to funds
invested on behalf of another government unit. Local governments must
remove pass-through funds which result in an account balance in the pool
in excess of $30 million within 10 business days. County governments must
remove such excess funds within 20 business days. The investment officer
shall promptly report each instance of noncompliance with, or apparent
abuse of, the limitations of this section to the Secretary of State and
to the governing body of the local government involved.

(2) The $30 million limitation contained in subsection (1) of this
section shall increase in proportion to the increase occurring after
September 9, 1995, in the Consumer Price Index for All Urban Consumers of
the Portland, Oregon, Standard Metropolitan Statistical Area, as compiled
by the United States Department of Labor, Bureau of Labor Statistics.
[1973 c.748 §2; 1981 c.880 §15; 1987 c.381 §2; 1995 c.245 §10] Subject to the
right of the unit of local government to specify the period in which its
funds may be held in the investment pool for investment and reinvestment,
the investment officer by rule shall prescribe the time periods for
investments in the investment pool and the procedure for withdrawal of
funds. [1973 c.748 §3]If the State Treasurer and the Oregon
Investment Council terminate the operation of all investment pools
created under ORS 293.824, governmental units, as defined in ORS 288.150,
may establish by written agreement under ORS chapter 190 one or more
pools for the investment of proceeds for the purposes identified in ORS
293.822. In establishing one or more such pools, the participating
governmental units may exercise those powers conferred on the State
Treasurer and the Oregon Investment Council by ORS 293.824. [1973 c.748
§4; 1979 c.608 §1; 1995 c.245 §11](1) The State Treasurer is the investment officer for
the Oregon Investment Council and the investment pool, and shall perform
functions in that capacity as authorized or required by law and,
consistent with law, by the council.

(2) The bond of the State Treasurer required from the State
Treasurer by law shall be deemed to extend to the faithful performance of
all functions of the office of investment officer under ORS 294.805 to
294.895.

(3) The investment officer may:

(a) Subject to any applicable provision of the State Personnel
Relations Law, employ, prescribe the functions and fix the compensation
of personnel necessary to facilitate and assist in carrying out the
functions of the council, investment officer and investment pool.

(b) Require a fidelity bond of any person employed by the
investment officer who has charge of, handles or has access to any of the
moneys in the investment pool. The amounts of the bonds shall be fixed by
the investment officer, except as otherwise provided by law, and the
sureties shall be approved by the investment officer. The premiums on the
bonds shall be an expense of the State Treasurer.

(4) Subject to review by the board, the investment officer may,
pursuant to ORS chapter 183, make reasonable rules necessary for the
administration of ORS 294.805 to 294.895. [1973 c.748 §§5,18] (1) The
local government investment pool shall seek to obtain a competitive
return on investments subject to the standards set forth in ORS 294.835
and consistent with the liquidity requirements demanded by the short term
nature of local government deposits in the pool.

(2) The investment officer shall at all times hold investments
which mature in three years or less, in an amount not less than an amount
equal to the aggregate of all funds placed with the investment officer by
local governments under ORS 294.805 to 294.895, which investments shall
be from the funds defined in ORS 293.701 (2)(p).

(3) Notwithstanding subsection (2) of this section, the investment
officer may purchase legally issued general obligations of the United
States and of the agencies and instrumentalities of the United States if
the seller of the obligations agrees to repurchase the obligations within
90 days following the date on which the investment officer makes the
investment. The price paid by the investment officer for such obligations
may not exceed amounts or percentages prescribed by written policy of the
Oregon Investment Council or the Oregon Short Term Fund Board created by
ORS 294.885.

(4) Investments and commitments of the investment pool which do not
conform to the quality or maturity requirements set forth in ORS 294.805
to 294.895 shall be liquidated by the investment officer once the market
value of such investments and commitments reaches book value, or as soon
as is practicable thereafter. [1979 c.608 §3 (enacted in lieu of
294.830); 1981 c.880 §16; 1987 c.381 §3; 1993 c.18 §61; 1995 c.40 §1]
(1) In investing and reinvesting moneys in the investment pool and in
acquiring, retaining, managing and disposing of investments of the
investment pool there shall be exercised the judgment and care under the
circumstances then prevailing, which individuals of prudence, discretion
and intelligence exercise in the management of their own affairs, not in
regard to speculation but in regard to the permanent disposition of their
funds, considering the probable income as well as the probable safety of
their capital. Within the limitations of the foregoing standard and
subject to subsection (2) of this section, there may be acquired,
retained, managed and disposed of as investments of the investment pool
every kind of investment which individuals of prudence, discretion and
intelligence acquire, retain, manage and dispose of for their own account.

(2) Notwithstanding subsection (1) of this section, moneys in the
investment pool may not be invested in the stock of any company,
association or corporation. [1973 c.748 §8; 1979 c.608 §4; 2005 c.294 §2]Subject to the objective set forth in
ORS 294.831 and the standards set forth in ORS 294.835, the Oregon
Investment Council shall formulate policies for the investment and
reinvestment of moneys in the investment pool and the acquisition,
retention, management and disposition of investments of the investment
pool. The council, from time to time, shall review those policies and
make changes therein as it considers necessary or desirable. The council
may formulate separate policies for any funds from any single
governmental unit included in the investment pool. [1973 c.748 §9] In
amounts available for investment purposes and subject to the policies
formulated by the Oregon Investment Council, the investment officer shall
invest and reinvest moneys in the investment pool and acquire, retain,
manage, including exercise of any voting rights, and dispose of
investments of the investment pool. [1973 c.748 §10] In making
investments pursuant to ORS 294.805 to 294.895, the investment officer
shall not:

(1) Make a commitment to invest funds or sell securities more than
14 business days prior to the anticipated date of settlement of the
purchase or sale transaction;

(2) Enter into any agreement to invest funds or sell securities for
future delivery for a fee other than interest;

(3) Lend securities to any person or institution, except on a fully
collateralized basis;

(4) Pay for any securities purchased by the investment officer
until the investment officer has received physical possession, or other
sufficient evidence, as determined under ORS 293.751 (1), of title
thereof. However, the investment officer may instruct any custodian bank,
defined in ORS 295.005 (2), to accept securities on the investment
officer’s behalf against payment therefor previously deposited with the
institution by the investment officer; or

(5) Deliver securities to the purchaser thereof upon sale prior to
receiving payment in full therefor. However, the investment officer may
deliver the securities to any custodian bank, defined in ORS 295.005 (2),
upon instructions to hold the same pending receipt by the institution of
full payment therefor. [1981 c.880 §11; 1991 c.88 §6]The Oregon Investment Council may enter into
contracts with one or more persons whom the council determines to be
qualified, whereby the persons undertake, in lieu of the investment
officer, to perform the functions specified in ORS 294.845 to the extent
provided in the contract. Performance of functions under contract so
entered into shall be paid for out of the gross interest or other income
of the investments with respect to which the functions are performed, and
the net interest or other income of the investments after that payment
shall be considered income of the investment pool. The council may
require a person contracted with to give to the state a fidelity bond in
a penal sum as may be fixed by law or, if not so fixed, as may be fixed
by the council, with corporate surety authorized to do business in this
state. Contracts so entered into and functions performed thereunder are
not subject to the State Personnel Relations Law or ORS 279A.140. [1973
c.748 §11; 2003 c.794 §251](1) In the acquisition or disposition of bonds with which
approving legal opinions ordinarily are furnished, the investment officer
may require an original or certified copy of the written opinion of a
reputable bond attorney or attorneys, or the written opinion of the
Attorney General, certifying to the legality of the bonds.

(2) The Oregon Investment Council may arrange for the furnishing to
the investment officer of investment counseling services. The furnishing
and acquisition of those services are not subject to the State Personnel
Relations Law or ORS 279A.140.

(3) The investment officer, with the approval of the council, may
arrange for services with respect to mortgages in which moneys in the
investment pool are invested. Those services shall be paid for out of the
gross interest of the mortgages with respect to which the services are
furnished, and the net interest of the mortgages after that payment shall
be considered income of the investment pool. The furnishing and
acquisition of those services are not subject to the State Personnel
Relations Law or ORS 279A.140. [1973 c.748 §12; 2003 c.794 §252](1) Except as provided in ORS 294.850 and this subsection,
all instruments of title of all investments of the investment pool shall
remain in the custody of the investment officer. The investment officer
may deposit with one or more custodial agents or banks those instruments
of title that the State Treasurer considers advisable, to be held in
safekeeping by the agents or banks for collection of the principal and
interest or other income, or of the proceeds of sale or maturity. For
purposes of this section, instruments of title of investments of the
investment pool may include such evidence of title as the investment
officer shall consider secure and consistent with modern investment,
banking and commercial practices, and may include book entry and
automated recordation of such title.

(2) Except as provided in ORS 294.850 and 294.855 (3) and
subsections (1) and (3) of this section, the investment officer shall
collect the principal and interest or other income of investments of the
investment pool, title of which is in the investment officer’s custody,
when due and payable, and shall pay to the appropriate local government
official the principal and interest or other income, within 30 days after
the last day of the calendar quarter in which the principal and interest
or other income accrues. Not less often than quarterly and without regard
to whether the short-term investments were made with moneys placed by
local government officials or by other sources, the investment officer
shall compute the amount by which the current fair market value exceeds
or is less than the net purchase price of all short-term investments
administered by the investment officer that mature more than 270 days
from the date computation is made. The investment officer shall compute
the fair market value of such investments based upon the mean value of
the bid and ask price of such investments as of the date of computation,
based upon quotations from reputable dealers or financial institutions
dealing in such investments. If the amount so computed by the investment
officer totals more than one percent of the balance of the pool, either
in terms of a gain or loss, the investment officer shall allocate the
amount to all pool participants. Any addition to or deduction from
amounts to be distributed shall be allocated among the municipalities
participating in the pool at any time during the month in proportion to
their average daily balances of funds invested through the pool.
Investments maturing 270 days or less from the date of computation shall
not be subject to the foregoing computation, but for other purposes shall
be valued at book value or original purchase price.

(3) In the event of default in the payment of principal or interest
or other income of any investment of the investment pool, the investment
officer, with the approval of the council, may:

(a) Institute the proper proceedings to collect the matured
principal or interest or other income.

(b) Accept for exchange purposes refunding bonds or other evidences
of indebtedness at interest rates to be agreed upon by the investment
officer and obligor.

(c) Make compromises, adjustments or disposition of the matured
principal or interest or other income as the investment officer considers
advisable for the purpose of protecting the moneys invested.

(d) Make compromises or adjustments as to future payments of
principal or interest or other income as the investment officer considers
advisable for the purposes of protecting the moneys invested. [1973 c.748
§13; 1979 c.475 §2; 1987 c.381 §4; 1991 c.88 §1; 1995 c.40 §2]The State Treasurer may deduct monthly a maximum of 0.435 basis
points of the most recent market value of assets under the management of
the investment pool. Amounts so deducted shall pay the State Treasurer
for expenses of the State Treasurer as investment officer and to the
extent the amounts deducted are so used shall be deposited into the
Miscellaneous Receipts Account established in the General Fund for the
State Treasurer, and are continuously appropriated for payment of the
expenses of the State Treasurer as investment officer. [1973 c.748 §6;
1975 c.740 §9; 1977 c.266 §11; 1991 c.88 §2; 1995 c.288 §2; 1999 c.1043
§3; 2001 c.716 §25](1) The
investment officer shall keep, for each governmental unit with funds in
the investment pool, a separate account, which shall record the
individual amounts and the totals of all investments of its moneys in the
investment pool.

(2) The investment officer shall report monthly to the local
government official of a governmental unit with funds in the investment
pool the changes in its account made during the preceding month for the
investment pool. The investment officer shall also furnish a financial
report monthly to each participating governmental unit investor in the
local government investment pool. The financial report shall include, but
not be limited to, such comparative data for the preceding six months
operation of the investment pool as will provide a basis for analyzing
trends and comparing operating results and financial position. A monthly
statement shall be distributed within 30 days after the end of that
month. [1973 c.748 §§14,15; 1979 c.608 §5; 1989 c.569 §4]
Not later than 15 days after the last day of each month, the investment
officer shall submit to the Oregon Investment Council and the Oregon
Short Term Fund Board a report of the investments made during the
preceding month. The report shall include a detailed summary of
investment, reinvestment, purchase, sale and exchange transactions,
setting forth, among other matters, the investments bought, sold and
exchanged, the dates thereof, the prices paid and obtained, the names of
the dealers involved and a statement of the accounts referred to in ORS
294.870 (1). The reports shall include a description of every investment
in the portfolio of assets in the investment pool showing issuer, coupon,
purchase date, maturity date, yield to maturity, book value, market value
as of the end of the month for which the report is rendered and the
method used to value pool investments; a computation of the average life
of the portfolio of assets in the investment pool weighted according to
the market value of each investment that matures more than 270 days from
the report date as of the end of the month for which the report is
rendered; and a computation of the annualized rate of return of the
investment pool portfolio, net of expense. A copy of the reports shall be
made available to each county, municipality, school district and other
political subdivision the funds of which are then being invested by the
investment officer. The investment officer may send copies of the report
to investment bankers and brokers recommended by the council. [1973 c.748
§16; 1981 c.880 §17; 1987 c.381 §5] An
examination and audit of the investment pool shall be made separately
from the audit of the treasurer for submission to the Oregon Investment
Council, local governmental units which are investors in the pool, the
Legislative Assembly and the board at least once a year and at other
times as the council may require. An audit report shall be submitted to
the individuals and units specified within 60 days after the end of the
fiscal year or as soon as practical. The report shall include a statement
prepared by the State Treasurer of the investment rules governing
investments authorized by the council. [1973 c.748 §17; 1979 c.608 §6](1) It is
recognized that a time may come when the interest of local governments
diminishes to the extent that participation in the local government
investment pool no longer warrants its operation as a separate fund. If
the local government investment pool decreases to a level below $125
million, the State Treasurer may transfer the assets of the pool to the
state investment fund established under ORS 293.701 (2)(o). In that
event, the local government investment pool participant accounts will be
treated as are other state funds and accounts in receiving a
proportionate share of the earnings of that investment fund.
Notwithstanding ORS 294.860, 294.865, 294.870, 294.875 or 294.880, when
the State Treasurer transfers the assets of the local government
investment pool to the state investment fund, the distributions of income
to local governments, payment of related expenses and the reporting,
program examination and audit functions with respect to the investment
pool participant accounts shall be administered in accordance with ORS
293.718, 293.751, 293.756, 293.761, 293.766, 293.771, 293.776 and 293.820.

(2) The State Treasurer, at the discretion of the treasurer may
reestablish the local government investment pool as a separate fund, if
the participant accounts increase to over $125 million and in the State
Treasurer’s judgment, sufficient interest by local government exists to
insure the local government investment pool will remain over $125
million. Prior to reestablishing the pool as a separate fund, the State
Treasurer shall first present a plan for operation, including the reasons
for such action, to the Oregon Investment Council at a regularly
scheduled meeting for its review and comment. The State Treasurer shall
publish notice in the Secretary of State’s administrative rules bulletin
of the treasurer’s intent to reestablish the pool as a separate fund at
least 30 days prior to the meeting at which the Oregon Investment Council
shall review the proposal, and notice of the meeting time and location of
the Oregon Investment Council at which the proposal will be discussed.
[1979 c.608 §9; 1980 c.19 §7; 1983 c.456 §3; 1993 c.18 §62; 1997 c.129
§1; 1999 c.1043 §7](1) There is created the Oregon Short Term Fund Board
consisting of seven members.

(2) One member shall be the State Treasurer or the treasurer’s
designated representative. Three members who are qualified by training
and experience in the field of investment or finance and who do not hold
any other public office or employment, shall be appointed by the State
Treasurer. Three members, who are treasurers, finance or fiscal officers
or business managers of any county, city or school district, shall be
appointed by the Governor. In making the appointment, the Governor may
consider persons recommended by:

(a) The Association of Oregon Counties.

(b) The League of Oregon Cities.

(c) The Oregon School Boards Association.

(3) The term of office of each appointed member of the board is
four years, but each appointed member serves at the pleasure of the
appointing authority. A vacancy in the appointed membership occurring
other than by expiration of term shall be filled in the same manner as
the original appointment, but for the unexpired term only. [1973 c.748
§19; 1979 c.608 §7; 1981 c.880 §18; 1989 c.1006 §2](1) A member of the Oregon Short Term Fund Board shall serve
without compensation.

(2) The board shall select one of its members as chairperson, for a
term and with the powers and duties necessary for the performance of the
functions of the office as the board shall determine. [1973 c.748 §20] The Oregon Short Term Fund Board
shall:

(1) Advise the Oregon Investment Council and the investment officer
in the management of the investment pool and in the investment of all
funds defined in ORS 293.701 (2)(p) and invested pursuant to ORS 293.721.

(2) Review the rules promulgated by the investment officer as
authorized under ORS 294.825 (4).

(3) Consult with the council and the investment officer on any
matter relating to the investment and reinvestment of funds in the
investment pool and on any matter relating to the investment or
reinvestment of funds defined in ORS 293.701 (2)(p) and invested pursuant
to ORS 293.721. [1973 c.748 §21; 1981 c.880 §19; 1993 c.18 §63]COUNCILS OF GOVERNMENTSAs used in ORS 294.900 to
294.930, “council of governments” means an entity organized by units of
local government under an intergovernmental agreement under ORS 190.003
to 190.130, which does not act under the direction and control of any
single member government and does provide services directly to
individuals. [1987 c.666 §1]Note: 294.900 to 294.930 were enacted into law by the Legislative
Assembly but were not added to or made a part of ORS chapter 294 or any
series therein by legislative action. See Preface to Oregon Revised
Statutes for further explanation.(1) A council of governments shall establish a
budget committee in accordance with the provisions of this section.

(2) The budget committee shall consist of the members of the
governing body of the council of governments and an equal number of
representatives of the services provided by the council of governments.
If there are fewer representatives of the services than the number of
members of the governing body of the council, the governing body and the
representatives willing to serve shall be the budget committee. If there
are no representatives willing to serve, the governing body shall be the
budget committee.

(3) The members of the budget committee shall receive no
compensation for their services as members of such committee.

(4) Appointive members of the budget committee shall not be
officers, agents or employees of the council of governments or providers
of the services.

(5) The appointive members of the budget committee shall be
appointed for terms of three years. The terms shall be staggered so that
one-third or approximately one-third of the terms of the appointive
members end each year.

(6) If any appointive member is unable to serve the term for which
the member was appointed, or an appointive member resigns prior to
completion of the term for which the member was appointed, the governing
body of the council of governments shall fill the vacancy by appointment
for the unexpired term.

(7) The budget committee, at its first meeting after its
appointment, shall elect a chairperson and a secretary from among its
members.

(8) Meetings of the budget committee shall comply with the
requirements of ORS 192.610 to 192.710. [1987 c.666 §2]Note: See note under 294.900.(1) Each council of governments shall prepare estimates
of expenditures for the ensuing year.

(2) The estimates required by subsection (1) of this section shall
be prepared by organizational unit or by program.

(3) Estimates required by subsection (1) of this section and
prepared by organizational unit shall be detailed under separate object
classifications of personal services, materials and services and capital
outlay. Separate estimates shall be made for special payments, debt
service, interfund revenue transfers, operating expenses and general
capital outlays which cannot reasonably be allocated to an organizational
unit.

(4) Estimates required by subsection (1) of this section and
prepared by program shall be arranged for each activity of a program.
Estimates under each activity shall be detailed under separate object
classifications of personal services, materials and services and capital
outlay. Separate estimates shall be made for each program for special
payments, debt service, interfund revenue transfers, operating expenses
and general capital outlays which cannot reasonably be allocated to an
activity within a function.

(5) Estimates of expenditures for personal services, other than
services of persons who receive an hourly wage or who are hired on a
part-time basis, shall list the salary for each officer and employee,
except that employees of like classification and salary range in each
organizational unit or activity may be listed by the number of those
employees, the limits of each salary range and the amount of their
combined salaries.

(6) The general capital outlay estimate shall include separate
amounts for land, buildings, improvements to land other than buildings
and machinery and equipment which cannot be reasonably allocated to an
organizational unit or activity.

(7) The debt service estimates shall include separate amounts for
principal and interest of each bond issue in each fund.

(8) If the estimates required by subsection (1) of this section are
not prepared by fund, there shall be prepared a summary which
cross-references programs or organizational units to the appropriations
required by ORS 294.435. [1987 c.666 §3]Note: See note under 294.900.(1) Not less than eight days and not more than 14 days prior
to the meeting of the budget committee of the council of governments,
notice of the meeting shall be published in a newspaper of general
circulation within each county represented by the council of governments.
The notice shall contain the purpose, time and place of the meeting and
the place where the budget document is available. The notice shall also
state that the meeting is a public meeting where deliberations of the
budget committee will take place and that any person may discuss proposed
programs with the budget committee at that time.

(2) The governing body shall either provide the means of
duplicating the budget or part thereof, in those situations where the
budget document or portion thereof may be quickly reproduced, or shall
provide copies of the budget document or part thereof so that a copy of
the budget document or part thereof may be readily obtained by any
individual interested in the affairs of the council of governments. [1987
c.666 §4]Note: See note under 294.900. (1) Each council of governments
shall hold a public hearing on the budget document as approved by the
budget committee.

(2) Not less than eight days and not more than 14 days prior to the
meeting held as required by subsection (1) of this section, notice of the
meeting shall be published in a newspaper of general circulation within
each county represented by the council of governments. The notice shall
contain the time and place of the meeting and the place where the budget
document, as approved by the budget committee, is available. The notice
shall also state that the meeting is a public meeting where any person
may appear for or against any item in the budget document. [1987 c.666 §5]Note: See note under 294.900. (1)
Notwithstanding requirements as to estimates of and limitation on
expenditures, any council of governments may make a supplemental budget
for the fiscal year for which the regular budget has been prepared under
one or more of the following circumstances:

(a) An occurrence or condition which had not been ascertained at
the time of the preparation of a budget for the current year which
requires a change in financial planning.

(b) A pressing necessity which was not foreseen at the time of the
preparation of the budget for the current year which requires prompt
action.

(c) Funds were made available by another unit of federal, state or
local government and the availability of such funds could not have been
ascertained at the time of the preparation of the budget for the current
year.

(d) A request for services or facilities, the cost of which shall
be supplied by a private individual, corporation or company or by another
governmental unit and the amount of the request could not have been
accurately ascertained at the time of the preparation of the budget for
the current year.

(e) The involuntary destruction, involuntary conversion, or sale of
property has necessitated the immediate purchase, construction or
acquisition of different facilities in order to carry on the governmental
operation.

(2) A supplemental budget shall not extend beyond the end of the
fiscal year during which it is submitted.

(3) The supplemental budget shall be published. [1987 c.666 §6;
1989 c.171 §40]Note: See note under 294.900. (1) The Department of
Revenue shall exercise the same powers and authority with regard to
councils of governments and the budgets and budget committees of councils
of governments as the department exercises under ORS 294.495 to 294.510
with regard to municipal corporations.

(2) On or before July 15 of each year, or upon such other date as
the Department of Revenue shall designate, each council of governments
shall file with the Department of Revenue a true copy of its budget as
finally adopted, a copy of the notices required to be published under ORS
294.915 (1) and 294.920 (2) and a copy of the resolution adopting the
budget.

(3) The copies of budgets filed with the Department of Revenue
under subsection (2) of this section shall be turned over to the Division
of Audits created by ORS 297.010 on or before the end of the fiscal year
for which the budget was prepared, and shall be retained by the Division
of Audits for a period of two years following the end of the fiscal year
for which the budget was prepared. [1987 c.666 §7]Note: See note under 294.900.MISCELLANEOUS (1) Subject to the
limitation contained in subsection (3) of this section, a county may
give, out of its general fund, moneys that are not otherwise obligated
for county purposes to any city situated in whole or in part within the
county. Such moneys may be used by the city for general municipal
purposes.

(2) Subject to the limitation contained in subsection (3) of this
section, a county may share the proceeds of any tax or excise described
in section 3a, Article IX of the Oregon Constitution, with any city
situated in whole or in part within the county for the purposes stated in
that section.

(3) In any fiscal year, moneys given to a city under this section
shall not exceed the amount of revenue raised in any manner by the county
within the boundaries of that city.

(4) Any sharing of revenues between a county and city under this
section is declared to be for a public purpose. [1981 c.335 §2]
Pursuant to ORS 293.250, a county may collect any moneys owed to the
county pursuant to a judgment obtained under ORS 169.151. The county
shall provide to the Department of Revenue the amount owed and the name,
Social Security number and address of the person who owes the moneys.
[2001 c.641 §1]Note: 294.960 was enacted into law by the Legislative Assembly but
was not added to or made a part of ORS chapter 294 or any series therein
by legislative action. See Preface to Oregon Revised Statutes for further
explanation.PENALTIES (1) Any officer willfully violating any of the
provisions of ORS 51.340 shall, upon conviction thereof, be fined not
more than $25 for each offense, to be paid into the county treasury for
the benefit of the common schools.

(2) Unless the time is extended by the commission, any municipal
corporation subject to ORS 294.605 to 294.705 which fails, neglects or
refuses to submit its annual or biennial budget to the commission on or
before May 15 of each fiscal year, or on or before May 15 of the first
fiscal year of a budget period, as provided in ORS 294.635, shall forfeit
to the use of the tax supervising and conservation commission fund $50
for each day of such failure, refusal or neglect.

(3) Any levying board subject to ORS 294.605 to 294.705 which
fails, neglects or refuses to attend any budget hearing at the time and
place fixed by the commission, or to be represented by counsel thereat,
shall forfeit to the use of the tax supervising and conservation
commission fund $25 for each member of such levying board responsible for
such failure, neglect or refusal. [Amended by 1953 c.306 §17; 1971 c.267
§15; 1999 c.654 §26; 2001 c.135 §30]

_______________
All moneys received from the United
States Government under the federal Flood Control Act, and Acts
amendatory thereof and supplemental thereto, and distributed to counties
pursuant to ORS 293.570, shall be used for the benefit of the public
schools and public roads of the counties receiving the funds.
(1) Except for moneys required to be expended through the county general
fund as required by subsection (5) of this section, all moneys paid to a
county under ORS 293.575 shall be deposited with the county treasurer and
credited to a special fund designated the Range Improvement Fund of
Grazing District No. _____. The county treasurer as ex officio district
treasurer shall disburse the moneys in the Range Improvement Fund only
upon the written order of the grazing advisory board.

(2) Except as provided in subsection (4) of this section, money
from grazing fees of grazing districts shall be expended within such
district as the grazing advisory board may direct and shall be expended
only for range improvements, such as fences, reservoirs, wells, water
development, maintenance and other range improvements approved by the
grazing advisory board.

(3) Pending approval by the grazing advisory board of the
expenditure of such money, all or any part of it may be invested in
United States Government securities. In such case the securities shall be
held by the county treasurer in lieu of such money so invested and
subject to liquidation and expenditure when recommended by the grazing
advisory board.

(4) In counties receiving funds from grazing districts containing
Indian lands ceded to the United States for disposition under public land
laws, funds therefrom shall be expended only for the benefit of public
schools and public roads of such county.

(5) In counties in which there are leased lands but no grazing
district, such funds shall be expended by the county court through the
county general fund.

(6) As used in this section, “grazing advisory board” means a board
appointed by the governing body of any county receiving funds under ORS
293.575 and authorized to expend those funds as provided in this section.
[Formerly 606.230; 1969 c.255 §1; 1977 c.115 §1; 1981 c.42 §1; 1991 c.67
§73](1) Except as provided in subsections (2) and (3) of this
section, the county treasurer shall credit to the general fund of the
county all interest received from any investment made from the general
cash balance of any funds in the hands of the county treasurer. If the
entire investment is made from a specific fund, however, the treasurer
shall credit the interest to the fund from which the investment was made.

(2) The county fiscal officer of a community college district, as
defined in ORS 341.005, shall credit to the general fund of the district
all interest received from any investment made by funds in the hands of
the county fiscal officer. If the entire investment is made from a
specific fund, however, the county fiscal officer shall credit the
interest to the fund from which the investment was made.

(3) Interest earned by investment of any moneys received by the
county treasurer from any source, which moneys have been designated for a
particular municipal corporation as defined in ORS 294.311, shall be
credited to the account of the particular municipal corporation and not
to any county fund. [1963 c.316 §1; 1971 c.513 §54; 1979 c.762 §8; 1997
c.308 §33] (1) The
county court or board of county commissioners, while sitting for county
business at the regular terms in January and July of each year, shall
carefully examine all books and papers relating to the financial affairs
of the county offices of county clerk, clerk of the county court,
treasurer and sheriff of the county.

(2) The county clerk and clerk of the county court shall exhibit
the numbered orders and vouchers referred to in ORS 294.090, together
with the stubs of the warrants, and all other books and papers relating
to the financial affairs of the county, for the inspection of the county
court or board of county commissioners at the time provided for in
subsection (1) of this section. [Amended by 1985 c.565 §49]The county clerk and clerk of the county court shall
number all orders and vouchers with numbers to correspond with warrants
drawn.Wherever it is provided by law that any
action or proceeding of any county, city, school district or other
municipal corporation or body politic shall be taken with respect to a
budget or tax levy for the calendar year, or for a fiscal year closing on
any day other than June 30, each such action or proceeding shall be taken
with respect to the fiscal year commencing on July 1 and closing on June
30.(1) It
is unlawful for any public official to expend any moneys in excess of the
amounts provided by law, or for any other or different purpose than
provided by law.

(2) Any public official who expends any public moneys in excess of
the amounts or for any other or different purpose than authorized by law
shall be civilly liable for the return of the money by suit of the
district attorney of the district in which the offense is committed, or
at the suit of any taxpayer of such district, if the expenditure
constitutes malfeasance in office or willful or wanton neglect of duty.

(3) On the demand in writing of 10 taxpayers of any municipal
corporation with a population exceeding 100,000 inhabitants, filed with
the tax supervising and conservation commission in the county in which
the municipal corporation is situated, which demand sets forth that a
public official has unlawfully expended public moneys in excess of the
amount or for any other or different purpose than provided by law and
that the expenditure constitutes malfeasance in office or willful or
wanton neglect of duty, the tax supervising and conservation commission
shall make an investigation of the facts as to the expenditure. If the
tax supervising and conservation commission finds that public moneys have
been unlawfully expended and that the expenditure constitutes malfeasance
in office or willful or wanton neglect of duty, the commission shall
proceed at law in the courts against the public official who has
unlawfully expended the moneys for the return of the moneys unlawfully
expended to the treasury of the municipal corporation. A right of action
hereby is granted to the tax supervising and conservation commission for
the purposes of this section.

(4) This section does not apply to the expenditure of revenues that
are allowed to be accrued from a fiscal year to the prior fiscal year
under ORS 294.447. [Amended by 2001 c.399 §1; 2002 s.s.4 c.1 §§9,10] (1) When authorized to use
facsimile signatures by the governing body of any county, city, district
organized for public purposes or any other public corporation or
political subdivision of the state, any person authorized to sign any
check, warrant or other instrument on behalf of the county, city,
district, public corporation or political subdivision may, in the
discretion of the person, sign the check, warrant or other instrument by
facsimile signature affixed by rubber stamp or by any mechanical
equipment or device.

(2) Where the use of facsimile signatures is authorized under this
section, the holder or drawee of any check, warrant or other instrument
bearing or purporting to bear a facsimile signature shall be under no
duty to determine the authority of the person who affixed the facsimile
signature to use facsimile signatures. [1955 c.261 §1](1) Subject to ORS 294.040 and 294.135 to 294.155, the
custodial officer of any county, municipality, school district or other
political subdivision of this state may, after having obtained a written
order from the governing body of the county, municipality, school
district or other political subdivision, which order shall be spread upon
the minutes or journal of the governing body, invest any sinking fund,
bond fund or surplus funds belonging to that county, municipality, school
district or other political subdivision in the bank accounts, classes of
securities at current market prices, insurance contracts and other
investments described in ORS 294.035. However, notwithstanding any
provision of ORS 190.003 to 190.250, except as provided in ORS 294.035:

(a) No custodial officer of any political subdivision of this state
may accept for investment or invest the funds of any other political
subdivision of this state; and

(b) No such political subdivision may tender funds for investment
to the custodial officer of any other such political subdivision.

(2) Subject to ORS 294.040, 294.135 to 294.155 and subsection (1)
of this section, the custodial officer of a port organized under ORS
chapter 777 or 778 may invest any sinking fund, bond fund or surplus
funds belonging to the port in interest-bearing revenue bonds issued by
an export trading corporation formed by the port under ORS 777.755 to
777.800. A custodial officer of a port shall not invest in the aggregate
more than $3 million in revenue bonds issued by an export trading
corporation. [1981 c.880 §5; 1983 c.200 §17; 1995 c.245 §6] (1) An investment made by a
custodial officer under ORS 294.035 (3)(a) to (f) and (h) to (j) or
294.125 may not exceed a maturity of 18 months or the date of anticipated
use of the funds by the county, municipality, school district or other
political subdivision to which the funds belong, whichever period is
shorter. However:

(a) The custodial officer may make investments having a maturity
longer than 18 months when the governing body of the county,
municipality, school district or other political subdivision to which the
funds belong has adopted a written investment policy that, prior to
adoption, was submitted to the Oregon Short Term Fund Board for review
and comment to the governing body, that includes guidelines concerning
maximum investment maturity dates and that provides by its terms for
readoption not less than annually; or

(b) When the funds in question are being accumulated for an
anticipated use that will occur more than 18 months after the funds are
invested, then, upon the approval of the governing body of the county,
municipality, school district or other political subdivision, the
maturity of the investment or investments made with the funds may occur
when the funds are expected to be used.

(2) The maximum term of any repurchase agreement transaction may
not exceed 90 days. [1981 c.880 §§6, 8; 1987 c.389 §1; 1989 c.303 §1;
1995 c.245 §7; 2003 c.41 §1; 2005 c.443 §24] In making
investments pursuant to ORS 294.035, the custodial officer shall not:

(1) Make a commitment to invest funds or sell securities more than
14 business days prior to the anticipated date of settlement of the
purchase or sale transaction;

(2) Enter into any agreement to invest funds or sell securities for
future delivery for a fee other than interest;

(3) Lend securities to any person or institution, except on a fully
collateralized basis, and except when such lending is specifically
permitted under an investment policy adopted pursuant to ORS 294.135
(1)(a);

(4) Pay for any securities purchased by the custodial officer until
the officer has received sufficient evidence of title thereof. Evidence
of title shall be consistent with modern investment, banking and
commercial practices and may include physical possession, book entry and
automated recordation of such title. However, the custodial officer may
instruct one or more custodian banks, as defined in ORS 295.005, to
accept or release securities as that custodial officer considers
advisable to be held in safekeeping for collection of principal and
interest or other income; or

(5) Deliver securities to the purchaser thereof upon sale prior to
receiving payment in full therefor. However, the custodial officer may
deliver the securities to any custodian bank, defined in ORS 295.005 upon
instructions to hold the same pending receipt by the institution of full
payment therefor. [1981 c.880 §7; 1991 c.88 §5; 1995 c.245 §8] (1) The custodial
officer for a local government that holds and invests funds on behalf of
another government unit shall at least once a year submit an audited
report to that government unit for which funds are invested. An audit
report shall be submitted to the local governmental unit or units within
30 days after receipt of the audit report by the custodial officer’s
governing body. This subsection shall not apply to municipal corporations
or political subdivisions exempt from municipal audits in ORS 297.435.

(2) The custodial officer shall prepare a report not less than
monthly to each county, municipality, school district and other political
subdivision the segregated funds of which the custodial officer is then
investing, as to changes made in the investments of the funds of that
body during the preceding month. If requested by that body, the custodial
officer shall furnish to it details on the investment transactions for
its fund. The custodial officer shall also provide copies of any
investment policy which has been adopted to the custodial officer’s
governing body upon request. [1981 c.880 §9; 1995 c.245 §9]
(1) After July 14, 1995, the governing body of a city, county or other
unit of local government shall provide an opportunity for interested
persons to comment on the enactment of any ordinance or resolution
prescribing a new fee or a fee increase or an increase in the rate or
other manner in which the amount of a fee is determined or calculated.

(2) Where a local government exercises authority to assume the
responsibility for a program delivered by the state, the local government
shall provide an opportunity to comment on the difference between the fee
amount charged by the state for such service and the proposed local fee
for the service. [1995 c.576 §5]COUNTY ASSESSMENT FUNDING ASSISTANCE PROGRAM(1) As used in this section and
ORS 294.178 to 294.187:

(a) “Department” means the Department of Revenue.

(b) “Expenditures” has the meaning given the term for purposes of
ORS 294.305 to 294.520 and may be further defined by rule of the
department. “Expenditures” does not include any item or class of items
that cannot reasonably be allocated to an organizational unit.

(c) “Expenditures for assessment and taxation” means expenditures
for any of the activities, functions or services required of a county in
the assessment, equalization, levy, collection or distribution of
property taxes under ORS chapters 305, 306, 307, 308, 308A, 309, 310,
311, 312 and 321. “Expenditures for assessment and taxation” specifically
includes expenditures for appraising principal or secondary industrial
properties, the responsibility for the making of which has been delegated
by the department to a county under ORS 306.126 (3).

(d) “Grant” has the meaning given the term for purposes of ORS
294.305 to 294.520, and is further described under ORS 294.178.

(2) On or before May 1 of each year, each county shall file with
the department a true copy of its estimates of expenditures for
assessment and taxation for the ensuing year as prepared for purposes of
ORS 294.352 but in accordance with any rules adopted by the department.

(3) Upon receipt of the estimate, the department shall review the
estimate to determine its adequacy to provide the resources needed to
achieve compliance with ORS 308.232 and 308.234, ORS chapter 309 and
other laws requiring equality and uniformity in the system of property
taxation within the county in order that the same equality and uniformity
may be achieved throughout the state.

(4) If, upon initial review of the estimate, the department
determines that the proposed expenditures, or any of them, are not at the
level or of the type needed to achieve adequacy, the department shall
notify the county governing body. The notice shall contain an explanation
of the reasons for the determination and may describe specific items or
classifications of expenditure which the department has determined are
required, or are not required, in order to achieve adequacy. The notice
shall fix the date upon which a conference with the county governing body
or representatives of the county governing body shall be held.

(5)(a) Subject to paragraph (b) of this subsection, if, upon
initial review, or upon or after conference held on the date specified in
the notice under subsection (4) of this section, or another date or dates
convenient to the department and the county governing body, the
department determines that the expenditures as initially filed, or that
the expenditures as agreed upon at the conference, are at the level and
of the type needed to achieve adequacy for that year or over a period of
years under a plan presented as described under ORS 294.181, the
department shall certify to the county governing body that its estimate
of expenditures for assessment and taxation so determined are adequate
and that the county will be included in the computation made under ORS
294.178 for the purpose of determining the amount of that county’s
quarterly grant. The department shall include in the certification an
estimate of the percentage share of the funds available in the County
Assessment Function Funding Assistance Account that the county will
receive under ORS 294.178 and an estimate of the total amount of the
grant that will be forthcoming to the county from that account for the
ensuing year on account of the certification.

(b) The department shall not certify expenditures under this
subsection that the department determines are in excess of the
expenditures necessary to meet the requirements of subsection (3) of this
section.

(6) Any certification issued under subsection (5) of this section
shall be issued as of the June 15 following the filing of the estimate of
expenditures under subsection (2) of this section. If, as of June 15,
agreement has not been reached between the department and the county
governing body upon the estimate, the department shall issue a denial of
certification.

(7) A county may appeal the determination of the department under
subsection (5)(b) of this section or the denial of certification issued
under subsection (6) of this section to the Director of the Oregon
Department of Administrative Services. Appeal shall be filed within 10
days after the date that the denial of certification is issued. The sole
issue upon appeal shall be the adequacy of expenditures for assessment
and taxation as filed with the department under subsection (2) of this
section, and the determination, if any, made by the department under
subsection (5)(b) of this section. If the Oregon Department of
Administrative Services does not issue an order approving the
expenditures before July 1 of the fiscal year for which the expenditures
are proposed, the certification for purposes of ORS 294.175 to 294.187
shall be considered denied. [1989 c.796 §2; 1995 c.748 §11; 1997 c.782
§2; 1999 c.314 §88; 2003 c.169 §9]
(1) Before issuing any certificate under ORS 294.175, the Department of
Revenue shall estimate the amount available in the County Assessment
Function Funding Assistance Account created under ORS 294.184 for
distribution as grants to counties for the ensuing fiscal year.

(2) The estimate shall be used to determine the estimated percent
of the moneys available in the County Assessment Function Funding
Assistance Account that each county will receive as grants and the total
estimated grant that each county will receive for the ensuing fiscal
year. The estimates so determined shall serve as the estimates required
to be included in any certification issued under ORS 294.175 for that
county.

(3) On or before the 25th day of the month following the close of
each fiscal quarter, the department shall pay a percentage of the moneys
in the County Assessment Function Funding Assistance Account as of the
close of that fiscal quarter to each county to which a certificate has
been issued under ORS 294.175.

(4) Except as provided under subsection (5) of this section, the
percentage to be paid to each county under subsection (3) of this section
shall be the percentage that the expenditures of the county certified by
the department to the county governing body under ORS 294.175 bears to
the total of all expenditures of all counties certified by the department
to counties under ORS 294.175. In determining the expenditures of a
county or in determining the total of all expenditures for purposes of
this subsection:

(a) No expenditures shall be included that have not been certified
under ORS 294.175.

(b) No expenditures of any county that did not file an estimate of
expenditures under ORS 294.175 shall be included.

(c) No expenditures of any county for which certification has been
denied shall be included.

(d) No expenditures of any county that does not make its
appropriation under ORS 294.435 based upon 100 percent of the
expenditures certified shall be included.

(e) No expenditures of any county that does not certify compliance
under ORS 294.181 shall be included.

(5) If the expenditures of a county are not included for a fiscal
quarter on account of subsection (4) of this section, no grant shall be
made to that county under subsection (3) of this section for that fiscal
quarter. If grant funds are denied to any county under this subsection
for any fiscal quarter, the percentage determined under subsection (4) of
this section shall be redetermined, excluding from the computation for
that fiscal quarter the certified expenditures of the county for which
grant funds are denied to the end that all of the funds available in the
County Assessment Function Funding Assistance Account as of the close of
the fiscal quarter may be distributed. [1989 c.796 §3; 1997 c.782 §3;
2003 c.273 §1] (1) If, at a
conference held pursuant to notice under ORS 294.175, it becomes apparent
that a county will be unable to meet the level of expenditures necessary
to achieve adequacy for the tax year for which the filing under ORS
294.175 was made, the Department of Revenue may certify to the county
governing body expenditures for assessment and taxation at the level
contained in the county’s estimate on file with the department or as
adjusted by the conference agreement.

(2) The department shall not certify expenditures under subsection
(1) of this section if the county does not present to the department at
the conference a plan to achieve adequacy in assessment and taxation
within a number of years specified by the Department of Revenue.

(3) Any county for which expenditures are certified pursuant to
this section shall certify to the department, not less than 15 days prior
to the close of the fiscal quarter, that the county is in compliance with
the conference agreement and the plan developed at the conference
agreement. [1989 c.796 §4](1) There is created under ORS 293.445 a suspense
account to be known as the County Assessment Function Funding Assistance
Account. The account shall consist of:

(a) All moneys paid over by the county treasurers as provided under
ORS 294.187; and

(b) All interest earned upon any moneys in the account.

(2) Of the moneys in the account as of the last day of each fiscal
quarter, the moneys necessary to pay the following Department of Revenue
expenses shall be transferred to a suspense account of the department
created under ORS 293.445 and are continuously appropriated to the
department for:

(a) Expenses incurred in carrying out the purposes of ORS 294.175
to 294.184; and

(b) Appraisal expenses incurred by the department in appraising
principal and secondary industrial properties identified under ORS
306.126 and property of centrally assessed companies under ORS 308.505 to
308.665.

(3) The total amount of moneys transferred to the suspense account
of the department under subsection (2) of this section may not exceed 10
percent of the moneys in the account as of the last day of the fiscal
quarter for which the transfer is being made.

(4) The remainder of the moneys in the account as of the last day
of the fiscal quarter shall be used for the purpose of making the grant
payments to counties as required under ORS 294.178 and are continuously
appropriated to the department for that purpose. [1989 c.796 §6; 1999
c.701 §2a; 2001 c.303 §13] (1)
There is created in the county treasury of each county a fund to be known
as the County Assessment and Taxation Fund. The fund shall consist of:

(a) Moneys deposited and credited to the fund under ORS 311.508.

(b) Moneys deposited and credited to the fund under ORS 205.323.

(c) Interest earned upon moneys credited to the fund.

(2) The county treasurer shall pay over the moneys in the fund,
determined as of the last day of the fiscal quarter, to the State
Treasurer on or before the 10th day of the month following the last day
of the fiscal quarter.

(3) The State Treasurer shall deposit and credit the moneys
received under subsection (2) of this section to the County Assessment
Function Funding Assistance Account referred to in ORS 294.184.

(4) If the county treasurer fails to pay over moneys, as required
under subsection (2) of this section, then any unpaid moneys shall be a
debt due and owing by the county to the state and the county shall pay
the legal rate of interest thereon from the due date until paid. Payment
of interest under this section shall not relieve the county treasurer
from any penalty imposed by law for failure to make the payments, and in
addition, the county treasurer shall be liable under ORS 311.375 (4)(a)
and (b).

(5) ORS 294.305 to 294.565 do not apply to a fund created under
this section. [1989 c.796 §7; 2003 c.273 §2]PUBLICATION OF FINANCIAL REPORTS(1) The county governing body of each county shall cause to be made out
and published at the expense of the county by the last day of each month
a schedule of those expenditures of the county which singly exceed $500
for the previous month. The schedule shall also include expenditures made
to claimants who receive in excess of $500 for the previous month in
return for a combination of articles or services which individually cost
less than $500. The publication shall also include a concise statement of
the proceedings of the governing body in the transaction of county
business entered of record during the previous month.

(2) The schedule of expenditures shall state the names of all
claimants, the general purpose of the article or service for which
payment is claimed in each bill and the amount ordered paid. The
statement of proceedings shall be a true reflection of actions taken at
any public meeting of the county governing body.

(3) Except as otherwise provided in this subsection, the county
shall not be required to publish any claim for personal services of
regular county officers and employees occupying budgeted positions. Once
each year the county shall publish the name and gross monthly salary of
all regular officers and employees occupying budgeted positions.

(4) The publications required by this section shall not apply to
any counties having a tax supervising and conservation commission.

(5) The publications required by this section shall be made by
posting on the bulletin board of the county courthouse and at all public
libraries in the county. The county shall also publish at least once each
month in a newspaper of general circulation in the county a notice
stating that the information required to be published under this section
is posted and available for review at the county courthouse and public
libraries. The notice shall also state that copies of all or part of the
posted information may be obtained from the county upon request and upon
payment of a fee not exceeding the actual costs incurred by the county in
making copies of the posted information. [Amended by 1963 c.360 §1; 1979
c.651 §1; 1987 c.435 §1; 1991 c.285 §1]LOCAL BUDGET LAWORS 294.305 to
294.565 shall be known as the Local Budget Law. As used in ORS
294.305 to 294.565, unless the context requires otherwise:

(1) “Accrual basis” means the recording of the financial effects on
a municipal corporation of transactions and other events and
circumstances that have cash consequences for the municipal corporation
in the periods in which those transactions, events and circumstances
occur, rather than only in the periods in which cash is received or paid
by the municipal corporation.

(2) “Activity” means a specific and distinguishable service
performed by one or more organizational components of a municipal
corporation to accomplish a function for which the municipal corporation
is responsible.

(3) “Appropriation” means an authorization granted by the governing
body to make expenditures and to incur obligations for specific purposes.
An appropriation is limited to a single fiscal year for municipal
corporations preparing annual budgets, or to the budget period for
municipal corporations preparing biennial budgets.

(4) “Basis of accounting” means the cash basis, the modified
accrual basis or the accrual basis.

(5) “Budget” means a plan of financial operation embodying an
estimate of expenditures for a given period or purpose and the proposed
means of financing the estimated expenditures.

(6) “Budget document” means the estimates of expenditures and
budget resources as set forth on the estimate sheets, tax levy and the
financial summary.

(7) “Budget period” means, for municipal corporations with the
power to levy a tax upon property, the two-year period commencing on July
1 and closing on June 30 of the second calendar year next following, and
for all other municipal corporations, an accounting period of 24 months
ending on the last day of any month.

(8) “Budget resources” means resources to which recourse can be had
to meet obligations and expenditures during the fiscal year or budget
period covered by the budget.

(9) “Cash basis” means a basis of accounting under which
transactions are recognized only in the period during which cash is
received or disbursed.

(10) “Current budget period” means the budget period in progress.

(11) “Current year” means the fiscal year in progress.

(12) “Encumbrance accounting” means the method of accounting under
which outstanding encumbrances are recognized as reductions of
appropriations and the related commitments are carried in a reserve for
encumbrances until liquidated, either by replacement with an actual
liability or by cancellation. This method of accounting may be used as a
modification to the accrual basis of accounting in accordance with
generally accepted accounting principles.

(13) “Encumbrances” means obligations in the form of purchase
orders, contracts or salary commitments which are chargeable to an
appropriation and for which a part of the appropriation is reserved.
Obligations cease to be encumbrances when paid or when the actual
liability is set up.

(14) “Ensuing budget period” means the budget period following the
current budget period.

(15) “Ensuing year” means the fiscal year following the current
year.

(16) “Expenditure” means, if the accounts are kept on the accrual
basis or the modified accrual basis, decreases in net financial resources
and may include encumbrances. If the accounts are kept on the cash basis,
the term covers only actual disbursement, the drawing of the check or
warrant for these purposes and not encumbrances, except that deferred
employee compensation shall be included as a personal service expenditure
where an approved deferred employee compensation plan is in effect for a
municipal corporation.

(17) “Fiscal year” means for municipal corporations with the power
to impose ad valorem property taxes, the fiscal year commencing on July 1
and closing on June 30, and for all other municipal corporations, an
accounting period of 12 months ending on the last day of any month.

(18) “Fund balance” means the excess of the assets of a fund over
its liabilities and reserves except in the case of funds subject to
budgetary accounting where, prior to the end of a fiscal period, it
represents the excess of the fund’s assets and estimated revenues for the
period over its liabilities, reserves and appropriations for the period.

(19) “Governing body” means the city council, board of
commissioners, board of directors, county court or other managing board
of a municipal corporation including a board managing a municipally owned
public utility or a dock commission.

(20) “Grant” means a donation or contribution of cash to a
governmental unit by a third party.

(21) “Intergovernmental entity” means an entity created under ORS
190.010 (5). The term includes any council of governments created prior
to the enactment of ORS 190.010 (5).

(22) “Internal service fund” means a fund properly authorized to
finance, on a cost reimbursement basis, goods or services provided by one
organizational unit of a municipal corporation to other organizational
units of the municipal corporation.

(23) “Liabilities” means probable future sacrifices of economic
benefits, arising from present obligations of a municipal corporation to
transfer assets or provide services to other entities in the future as a
result of past transactions or events. The term does not include
encumbrances.

(24)(a) “Modified accrual basis” means the accrual basis of
accounting adapted to the governmental fund-type measurement focus. Under
this basis of accounting, revenues and other financial resource
increments, such as bond proceeds, are recognized when they become
susceptible to accrual, that is, when they become both measurable and
available to finance expenditures in the current period.

(b) As used in this subsection, “available” means collectible in
the current period or soon enough thereafter to be used to pay
liabilities of the current period. Under this basis of accounting,
expenditures are recognized when the fund liability is incurred except
for:

(A) Inventories of material and supplies that may be considered
expenditures either when purchased or when used; and

(B) Prepaid insurance and similar items that may be considered
expenditures either when paid for or when consumed.

(25) “Municipal corporation” means any county, city, port, school
district, union high school district, community college district and all
other public or quasi-public corporations including a municipal utility
or dock commission operated by a separate board or commission. “Municipal
corporation” includes an intergovernmental entity or council of
governments that proposes to impose or imposes ad valorem property taxes.

(26) “Net working capital” means the sum of the cash, cash
equivalents, investments, accounts receivable expected to be converted to
cash during the ensuing year or ensuing budget period, inventories,
supplies and prepaid expenses less current liabilities and, if
encumbrance accounting is adopted, reserve for encumbrances. The term is
not applicable to the cash basis of accounting.

(27) “Object” means, as used in expenditure classification,
articles purchased including, but not limited to, land, buildings,
equipment and vehicles, or services obtained including, but not limited
to, administrative services, clerical services, professional services,
property services and travel, as distinguished from the results obtained
from expenditures.

(28) “Object classification” means a grouping of expenditures on
the basis of goods or services purchased, including, but not limited to,
personal services, materials, supplies and equipment.

(29) “Operating taxes” has the meaning given that term in ORS
310.055.

(30) “Organizational unit” means any administrative subdivision of
a municipal corporation, especially one charged with carrying on one or
more functions or activities.

(31) “Population” means the number of inhabitants of a municipal
corporation according to certified estimates of population made by the
State Board of Higher Education.

(32) “Program” means a group of related activities aimed at
accomplishing a major service or function for which the municipality is
responsible.

(33) “Public utility” means those public utility operations
authorized by ORS chapter 225.

(34) “Publish” or “publication” means any one or more of the
following methods of giving notice or making information or documents
available to members of the general public:

(a) Publication in one or more newspapers of general circulation
within the jurisdictional boundaries of the municipal corporation.

(b) Posting through the United States Postal Service by first class
mail, postage prepaid, to each street address within the jurisdictional
boundaries of the municipal corporation.

(c) Hand delivery to each street address within the jurisdictional
boundaries of the municipal corporation.

(35) “Receipts” means cash received unless otherwise qualified.

(36) “Reserve for encumbrances” means a reserve representing the
segregation of a portion of a fund balance to provide for unliquidated
encumbrances.

(37) “Revenue” means the gross receipts and receivables of a
governmental unit derived from taxes, licenses, fees and from all other
sources, but excluding appropriations, allotments and return of principal
from investment of surplus funds.

(38) “Special revenue fund” means a fund properly authorized and
used to finance particular activities from the receipts of specific taxes
or other revenues. [1963 c.576 §3; 1971 c.513 §55; 1975 c.319 §2; 1977
c.102 §4; 1977 c.305 §1; 1979 c.686 §1; 1997 c.308 §3; 1997 c.541 §322;
1999 c.632 §1; 2001 c.104 §102; 2001 c.135 §3; 2003 c.235 §1]The provisions of ORS 294.305 to 294.565 do
not apply to the following municipal corporations and entities:

(1) Drainage districts organized under ORS chapter 547;

(2) District improvement companies organized under ORS chapter 554;

(3) Highway lighting districts organized under ORS chapter 372;

(4) Irrigation districts organized under ORS chapter 545;

(5) Road districts organized under ORS chapter 371;

(6) Soil and water conservation districts organized under ORS
chapter 568 that will not levy an ad valorem tax during the ensuing year
or ensuing budget period;

(7) Municipal public utilities operating under separate boards or
commissions, authorized under ORS chapter 225 and city charters, and
people’s utility districts organized under ORS chapter 261, both
operating without ad valorem tax support during the ensuing year or
ensuing budget period;

(8) Housing authorities organized under ORS 446.515 to 446.547 and
ORS chapter 456 that are not carrying out urban renewal activities using
a division of ad valorem taxes under ORS 457.440 during the ensuing year
or ensuing budget period;

(9) Water control districts organized under ORS chapter 553 that
will not levy an ad valorem tax during the ensuing year or ensuing budget
period;

(10) Hospital financing authorities organized under ORS 441.525 to
441.595;

(11) Export trading corporations organized under ORS 777.755 to
777.800;

(12) Diking districts organized under ORS chapter 551;

(13) Health districts organized under ORS 440.315 to 440.410; and

(14) Intergovernmental entities created under ORS 190.010,
including councils of governments described in ORS 294.900 to 294.930,
except that an intergovernmental entity or a council of governments that
proposes to impose ad valorem property taxes for the ensuing year or
budget period is subject to ORS 294.305 to 294.565 for the budget
prepared for that year or period. [1963 c.576 §35; 1965 c.451 §1; 1979
c.621 §8a; 1979 c.686 §9; 1981 c.918 §5; 1983 c.200 §18; 1985 c.361 §1;
1999 c.632 §2; 2001 c.135 §4; 2001 c.251 §3; 2003 c.235 §2]The purposes of ORS 294.305 to 294.565 are:

(1) To establish standard procedures for the preparation,
presentation, administration and appraisal of budgets of municipal
corporations;

(2) To provide for a brief description of the programs of a
municipal corporation and the fiscal policy which is to accomplish these
programs;

(3) To provide for estimation of revenues, expenditures and
proposed taxes;

(4) To provide specific methods for obtaining public views in the
preparation of fiscal policy;

(5) To provide for the control of revenues and expenditures for the
promotion of efficiency and economy in the expenditure of public funds;
and

(6) To enable the public, taxpayers and investors to be apprised of
the financial policies and administration of the municipal corporation in
which they are interested. [1963 c.576 §2; 1997 c.308 §4; 1997 c.541 §323] (1) A municipal corporation, by ordinance,
resolution or charter, may provide that the budget and budget documents
for the municipal corporation be prepared for a period of 24 months.
Unless so authorized by ordinance, resolution or charter, a municipal
corporation may not prepare a budget and budget documents for a period
longer than one fiscal year.

(2) When the governing body of a municipal corporation prepares a
biennial budget, the governing body shall certify to the assessor for
each fiscal year of the budget period the ad valorem property tax amount
or rate for the ensuing fiscal year. [2001 c.135 §2]Note: 294.323 was added to and made a part of 294.305 to 294.565 by
legislative action but was not added to any smaller series therein. See
Preface to Oregon Revised Statutes for further explanation.(1) Except as provided in
subsections (3) to (11) of this section, it is unlawful for any municipal
corporation to expend money or to certify to the assessor an ad valorem
tax rate or estimated amount of ad valorem taxes to be imposed in any
year unless the municipal corporation has complied with ORS 294.305 to
294.565.

(2) To the extent that any of subsections (3) to (11) of this
section apply in a given case, the municipal corporation need not comply
with ORS 294.305 to 294.565.

(3) Subsection (1) of this section does not apply to the
expenditure in the year of receipt of grants, gifts, bequests or devises
transferred to a municipal corporation in trust for specific purposes or
to other special purpose trust funds at the disposal of municipal
corporations. However, subsection (1) of this section does apply to the
expenditure of grants, gifts, bequests or devises transferred to a
municipal corporation for undesignated general purposes or to the
expenditure of grants, gifts, bequests or devises transferred to a
municipal corporation in trust for specific purposes which were received
in a prior year. Expenditure of grants, gifts, bequests and devises
exempt from subsection (1) of this section by this subsection is lawful
only after enactment by the governing body of the municipal corporation
of appropriation ordinances or resolutions authorizing the expenditure.

(4) Subsection (1) of this section does not apply whenever the
governing body of a municipal corporation has declared the existence of
an unforeseen occurrence or condition which could not have been foreseen
at the time of the preparation of the budget for the current year or
current budget period or could not have foreseen a pressing necessity for
the expenditure or has received a request for services or facilities, the
cost of which is supplied by a private individual, corporation or company
or by another governmental unit necessitating a greater expenditure of
public money for any specific purpose or purposes than the amount
budgeted in order to provide the services for which the governing body of
the municipal corporation was responsible. The governing body may make
excess expenditures for the specific purpose or purposes beyond the
amount budgeted and appropriated to the extent that maintenance, repair
or self-insurance reserves authorized by ORS 294.366 or nontax funds are
available or may be made available. The expenditures are lawful only
after the enactment of appropriate appropriation ordinances or
resolutions authorizing the expenditures. The ordinance or resolution
must state the need for the expenditure, the purpose for the expenditure
and the amount appropriated.

(5) Subsection (1) of this section does not apply to the
expenditure during the current year or current budget period of the
proceeds of the sale of the following bonds or other obligations, or to
the expenditure during the current year or current budget period of other
funds to pay debt service on the following bonds or other obligations:

(a) Bonds that are issued under the Uniform Revenue Bond Act, ORS
288.805 to 288.945, for which the referral period described in ORS
288.815 ended after the preparation of the budget of the current year or
current budget period;

(b) Bonds or other obligations that were approved by the electors
during the current year or current budget period; or

(c) Bonds or other obligations issued during the current year or
current budget period to refund previously issued bonds or obligations.

(6) Subsection (1) of this section does not apply to:

(a) Expenditures of funds received from the sale of conduit revenue
bonds or other borrowings issued for private business entities or
nonprofit corporations by cities, counties, county service districts,
port districts, special districts, the Port of Portland or the State of
Oregon or to pay debt service on the bonds;

(b) Expenditures of funds that have been irrevocably placed in
escrow for the purpose of defeasing and paying bonds or other borrowings;

(c) Expenditures of assessments or other revenues to redeem bonds
or other obligations that are payable from the assessments or other
revenues, when the assessments or other revenues are received as a result
of prepayments or other unforeseen circumstances; or

(d) Expenditures of funds that are held as debt service reserves
for bonds or other borrowings if the expenditures are made to:

(A) Pay debt service on the bonds or other borrowings;

(B) Redeem the bonds or other borrowings; or

(C) Fund an escrow or trust account to defease or pay the bonds or
other borrowings.

(7) Subsection (1) of this section does not apply to expenditures
of funds received from assessments against benefited property for local
improvements as defined in ORS 223.001 to the extent that the cost of the
improvements is to be paid by owners of benefited property.

(8) Subsection (1) of this section does not apply to the
expenditure of funds accumulated to pay deferred employee compensation.

(9) Subsection (1) of this section does not apply to refunds or the
interest on refunds granted by counties under ORS 311.806.

(10) Subsection (1) of this section does not apply to refunds
received by a municipal corporation when purchased items are returned
after an expenditure has been made. Expenditure of refunded amounts to
which this subsection applies is lawful only after the governing body of
the municipal corporation has enacted, after public hearing, appropriate
appropriation ordinances or resolutions authorizing the expenditure.

(11) Subsection (1) of this section does not apply to a newly
formed municipal corporation during the fiscal year in which it was
formed. If a new municipal corporation is formed between March 1 and June
30, subsection (1) of this section does not apply to the municipal
corporation during the fiscal year immediately following the fiscal year
in which it was formed. [1963 c.576 §4; 1965 c.451 §2; 1977 c.102 §2;
1979 c.310 §1; 1987 c.280 §1; 1991 c.902 §110; 1995 c.333 §8; 1997 c.308
§5; 1997 c.541 §324; 1999 c.632 §3; 2001 c.135 §5; 2003 c.195 §25; 2005
c.443 §14] The governing body of each municipal
corporation shall, unless otherwise provided by county or city charter,
designate one person to serve as budget officer. The budget officer, or
the person or department designated by charter and acting as budget
officer, shall prepare or supervise the preparation of the budget
document. The budget officer shall act under the direction of the
executive officer of the municipal corporation, or where no executive
officer exists, under the direction of the governing body. [1963 c.576 §5](1) Except as provided in ORS 294.341,
the governing body of each municipal corporation shall establish a budget
committee in accordance with the provisions of this section.

(2) The budget committee shall consist of the members of the
governing body and a number, equal to the number of members of the
governing body, of electors of the municipal corporation appointed by the
governing body; if there are electors fewer than the number required, the
governing body and the electors who are willing to serve shall be the
budget committee; and if there are no electors willing to serve, the
governing body shall be the budget committee.

(3) The members of the budget committee shall receive no
compensation for their services as members of such committee.

(4) Appointive members of the budget committee may not be officers,
agents or employees of the municipal corporation.

(5) Appointive members of a budget committee that prepares an
annual budget shall be appointed for terms of three years. The terms
shall be staggered so that, as near as practicable, one-third of the
terms of the appointive members end each year.

(6) Appointive members of a budget committee that prepares a
biennial budget shall be appointed for terms of four years. The terms
shall be staggered so that, as near as practicable, one-fourth of the
terms of the appointive members end each year.

(7) If any appointive member is unable to serve the term for which
the member was appointed, or an appointive member resigns prior to
completion of the term for which the member was appointed, the governing
body of the municipal corporation shall fill the vacancy by appointment
for the unexpired term.

(8) If the number of members of the governing body is reduced or
increased by law or charter amendment, the governing body of the
municipal corporation shall reduce or increase the number of appointive
members of the budget committee so that the number thereof shall be equal
to but not greater than the number of members of the governing body. To
effect a reduction, the governing body of the municipal corporation may
remove such number of appointive members as may be necessary. The
removals shall be made so that the number remaining will be divided into
three, if the terms of the appointive members are governed by subsection
(5) of this section, or four, if the terms of the appointive members are
governed by subsection (6) of this section, equal or approximately equal
groups as to terms. In case of an increase, additional appointive members
shall be appointed for such terms so that they, together with the members
previously appointed, will be divided into three or four, as appropriate
under this section, equal or approximately equal groups as to terms.

(9) The budget committee shall at its first meeting after its
appointment elect a presiding officer from among its members. [1963 c.576
§6; 1973 c.61 §1; 1979 c.310 §2; 1997 c.308 §6; 2001 c.135 §32]The governing body of each municipal
corporation having a population exceeding 200,000 and that is located in
a county having a tax supervising and conservation commission shall be
the budget committee for the municipal corporation unless the governing
body of the municipal corporation elects by resolution to create a budget
committee as provided in ORS 294.336. [1963 c.576 §7; 1997 c.308 §7; 2005
c.417 §1] (1)
Each municipal corporation shall prepare estimates of expenditures for
the ensuing year or ensuing budget period.

(2) The estimates required by subsection (1) of this section shall
be prepared by organizational unit or by program.

(3) Estimates required by subsection (1) of this section and
prepared by organizational unit shall be detailed under separate object
classifications of personal services, materials and services and capital
outlay. Separate estimates shall be made for special payments, debt
service, interfund revenue transfers, operating expenses and general
capital outlays which cannot reasonably be allocated to an organizational
unit.

(4) Estimates required by subsection (1) of this section and
prepared by program shall be arranged for each activity of a program.
Estimates under each activity shall be detailed under separate object
classifications of personal services, materials and services and capital
outlay. Separate estimates shall be made for each program for special
payments, debt service, interfund revenue transfers, operating expenses
and general capital outlays which cannot reasonably be allocated to an
activity within a function. For common and union high school districts
and community colleges, estimates required by this subsection shall be
further detailed by object within each object classification.

(5) Estimates of expenditures for personal services, other than
services of persons who receive an hourly wage or who are hired on a
part-time basis, shall list the salary for each officer and employee,
except that employees of like classification and salary range, (such
range not to exceed that established by the governing body of the
municipal corporation in accordance with its policy for setting salaries)
in each organizational unit or activity may be listed by the number of
those employees, the limits of each salary range and the amount of their
combined salaries.

(6) The general capital outlay estimate shall include separate
amounts for land, buildings, improvements to land other than buildings
and machinery and equipment which cannot be reasonably allocated to an
organizational unit or activity.

(7) The debt service estimates shall include separate amounts for
principal and interest of each bond issue in each fund.

(8) There may be included in each fund an estimate for general
operating contingencies.

(9) If the estimates required by subsection (1) of this section are
not prepared by fund, there shall be prepared a summary which
cross-references programs or organizational units to the appropriations
required by ORS 294.435. [1979 c.686 §3 (enacted in lieu of 294.351);
2001 c.135 §6](1) Each school district, each education
service district and each community college district shall prepare its
estimates of expenditures required by ORS 294.352 in accordance with the
classification of revenue and expenditure accounts prescribed by rules of
the State Board of Education with the approval of the Department of
Revenue. The Department of Revenue shall be responsible for determining
compliance.

(2) The term “organizational unit” shall not apply to hospitals,
school districts, education service districts and community colleges in
preparing estimates of expenditures under ORS 294.352 or making
appropriations under ORS 294.435. The term “organizational unit” shall
not apply to hospitals in preparing the budget summary required by ORS
294.416.

(3) Notwithstanding ORS 294.352 (5), each municipal corporation
which operates a public utility or hospital shall prepare its estimates
for such operations in accordance with the generally accepted system of
accounts for such operation or in accordance with the general system of
accounts contained in ORS 294.311 to 294.520. [1963 c.576 §§8a,9; 1971
c.513 §56; 1979 c.686 §4; 1993 c.112 §1] (1) Each
municipal corporation shall estimate in detail its budget resources for
the ensuing year or ensuing budget period by funds and sources.

(2) Budget resources include but are not limited to:

(a) The balance of cash, cash equivalents and investments (in the
case of a municipal corporation on the cash basis) or the net working
capital (in the case of a municipal corporation on the accrual or
modified accrual basis of accounting) that will remain in each fund on
the last day of the current year or current budget period;

(b) Taxes;

(c) Fees;

(d) Licenses;

(e) Fines;

(f) Interest on deposits or on securities of any kind;

(g) Endowments;

(h) Annuities;

(i) Penalties;

(j) Sales of property or other assets or products of any kind;

(k) Delinquent taxes;

(L) Judgments;

(m) Damages;

(n) Rent;

(o) Premiums on sales of bonds;

(p) Reimbursement for services, road or other work performed for
others;

(q) Transfer or reverter of unused balances of any kind;

(r) Reimbursement for services provided other funds;

(s) Rebates;

(t) Refunds of moneys heretofore paid on any account;

(u) Apportionment, grant, contribution, payment or allocation from
the federal or state government or any unit of government;

(v) Taxes for the ensuing year or ensuing budget period;

(w) Interfund revenue transfers; and

(x) Revenues from any and all other sources of whatsoever kind or
character.

(3) Budget resources do not include:

(a) The estimate for the ensuing year or ensuing budget period of
discounts under ORS 311.505.

(b) The estimate of uncollectible amounts of taxes, fees or charges
for the ensuing year or ensuing budget period.

(c) Moneys accumulated under an approved employee deferred
compensation plan and interest or investment returns earned on such
moneys.

(d) Grants, gifts, bequests or devises transferred to a municipal
corporation in trust for specific uses in the year of transfer. However,
such grants, gifts, bequests or devises shall be included as budget
resources if, by the time the budget committee approves the budget, the
amount thereof that will be received in the ensuing year or ensuing
budget period can be reasonably estimated. Such grants, gifts, bequests
or devises may be placed in a trust and agency fund, to then be
appropriated from such fund or funds. [1963 c.576 §10; subsection (4)
enacted as 1965 c.604 §11; 1969 c.612 §3; 1977 c.102 §3; 1979 c.310 §4;
1997 c.308 §8; 1999 c.632 §4; 1999 c.1051 §268; 2001 c.135 §7; 2005 c.22
§223](1) Any port or dock commission may
reserve any portion of the receipts from any revenue-producing property
or facility. Any city may reserve any portion of the receipts from any
public utility operation of such city. Any such port, dock commission or
city may reserve any proceeds from the sale of any such property for
future maintenance, alteration, repair, equipment, relocation or
replacement of such properties or facilities of the general nature and
type from which the proceeds or receipts were received or for insurance
funds or retirement pension funds, as the governing body may deem
necessary or appropriate. However, if money is received from the sale of
property that has been purchased with the proceeds from the sale of bonds
or utility certificates, the governing body shall first apply the
receipts from the sale of such property to the payment of any applicable
outstanding bonded indebtedness before allocation of any portion of the
receipts to a reserve fund.

(2) Moneys reserved under subsection (1) of this section shall be
placed in a special fund or funds. [1963 c.576 §12; 2005 c.22 §224]A municipal corporation may include in its budget an estimate of
unappropriated ending fund balance for each fund, for use in the fiscal
period following that for which the budget is being prepared. The
estimate authorized by this section represents cash or net working
capital which will be carried over into the year following the ensuing
fiscal year or ensuing budget period for which the budget is being
prepared. It shall not in any way reduce the cash balance or net working
capital which becomes part of the budget resources provided in ORS
294.361 (1) to (3). The unappropriated ending fund balance authorized by
this section shall become a budget resource at the close of the ensuing
fiscal year or ensuing budget period for the succeeding year or budget
period. Except as provided in ORS 294.326 (3) and 294.455, no
appropriation nor expenditure shall be made in the year or budget period
for which the budget is applicable for the amount estimated pursuant to
this section. [1963 c.576 §13; 1965 c.451 §4; 1997 c.308 §9; 2001 c.135
§8](1) The sheet or sheets containing the estimate of
expenditures shall also show in parallel columns the actual expenditures
for the two fiscal years next preceding the current year or the actual
expenditures for the two budget periods preceding the current budget
period, the estimated expenditures for the current year or current budget
period and the estimated expenditures for the ensuing year or ensuing
budget period.

(2) The sheet or sheets containing the estimate of budget resources
shall also show in parallel columns the actual budget resources of the
two fiscal years next preceding the current year or the actual budget
resources for the two budget periods preceding the current budget period,
the estimated budget resources for the current year or current budget
period and the estimated budget resources for the ensuing year or ensuing
budget period.

(3) The estimate sheets shall be made a part of the budget
document. [1963 c.576 §14; 2001 c.135 §9] (1) Each municipal
corporation that has the power to levy an ad valorem property tax shall
estimate, in the manner provided in this section, the amount of revenues
that will be received in the ensuing year or ensuing budget period
through the imposition of taxes upon the taxable property within the
municipal corporation.

(2) Subject to the additional adjustments required under subsection
(3) of this section, the estimated ad valorem taxes that will be received
in the ensuing year or ensuing budget period is the sum of the following:

(a) The amount derived by multiplying the estimated assessed value
for the ensuing year or each fiscal year of the ensuing budget period of
the taxable property within the municipal corporation, after boundary
changes have been filed in final approved form with the county assessor
and the Department of Revenue as provided in ORS 308.225, by whichever of
the following is applicable to the municipal corporation:

(A) The municipal corporation’s permanent rate limit on operating
taxes, as defined in ORS 310.202 (7), or such lesser rate as the
municipal corporation may determine to use for purposes of levying such
ad valorem taxes; or

(B) The municipal corporation’s statutory rate limit on operating
taxes, as defined in ORS 310.202 (10), or such lesser rate as the
municipal corporation may determine to use for purposes of levying such
ad valorem taxes.

(b) If the municipal corporation is authorized to levy a local
option tax that was authorized by the electors as a dollar amount, the
dollar amount of such local option tax that is authorized to be levied in
the ensuing year or ensuing budget period.

(c) If the municipal corporation is authorized to levy a local
option tax that was authorized by the electors as a tax rate, the amount
derived by multiplying the authorized rate of such local option tax for
the ensuing year or ensuing budget period by the estimated assessed value
for the ensuing year or each fiscal year of the ensuing budget period of
the taxable property within the municipal corporation.

(d) The municipal corporation’s estimate of the amount required to
pay the principal and interest on the amounts described in ORS 310.060
(2)(d) and (e), divided by the annual average percentage of taxes
collected in the county in which the taxable property of the municipal
corporation is located. The estimate may include amounts to reimburse the
municipal corporation for the payment of principal and interest on exempt
bonded indebtedness that the municipal corporation made from other moneys
because collections of taxes levied for exempt bonded indebtedness were
not sufficient to pay that exempt bonded indebtedness.

(3) The sum of the amounts determined under subsection (2)(a), (b)
and (c) of this section shall be reduced by an amount equal to the
estimated amount of such taxes that will not be collected as a result of:

(a) The discounts allowed under ORS 311.505;

(b) The limits imposed under ORS 310.150 (3); and

(c) The failure of taxpayers to pay such taxes in the year for
which they are levied.

(4) The estimated ad valorem taxes determined in accordance with
subsections (2) and (3) of this section shall be used by the municipal
corporation for purposes of complying with the requirements of ORS
310.060 (1). [1963 c.576 §15: 1979 c.762 §1; 1991 c.459 §5; 1997 c.308
§10; 1997 c.541 §328; 1999 c.186 §7; 1999 c.632 §5; 2001 c.135 §10; 2001
c.138 §1; 2003 c.46 §1; 2005 c.443 §31] Each municipal corporation shall prepare
a financial summary. The financial summary shall include:

(1) A summary statement by funds showing the estimate of budget
resources and the estimate of expenditures;

(2) A classified statement of outstanding indebtedness, but not
including indebtedness that has been defeased and is no longer considered
to be outstanding as provided in ORS 288.675;

(3) A classified statement of all indebtedness authorized but not
incurred; and

(4) A summary statement of the estimate of ad valorem property
taxes, stated in dollars and cents and also stated as an estimated tax
rate per thousand dollars of assessed value. [1963 c.576 §16; 1979 c.686
§5; 1997 c.308 §11; 1997 c.541 §329] A budget message shall be prepared by or
under the direction of the executive officer of the municipal corporation
or, where no executive officer exists, by or under the direction of the
presiding officer of the governing body. The budget message shall be
delivered at a meeting of the budget committee as provided in ORS 294.401
(1). The budget message shall:

(1) Explain the budget document;

(2) Contain a brief description of the proposed financial policies
of the municipal corporation for the ensuing year or ensuing budget
period;

(3) Describe in connection with the financial policies of the
municipal corporation, the important features of the budget document;

(4) Set forth the reason for salient changes from the previous year
or budget period in appropriation and revenue items; and

(5) Explain the major changes in financial policy. [1963 c.576 §17;
1997 c.308 §12; 2001 c.135 §11] The budget
message and budget document shall be prepared a sufficient length of time
in advance to allow the adoption of the budget by the close of the
current fiscal year or current budget period. [1963 c.576 §18; 2001 c.135
§12](1) The budget
committee shall hold one or more meetings for the following purposes:

(a) Receiving the budget message and the budget document; and

(b) Providing members of the public with an opportunity to ask
questions about and comment upon the budget document.

(2) When more than one meeting of the budget committee is held
under subsection (1) of this section, the first meeting shall be the
meeting at which the budget message and the budget document are received
by the budget committee. The budget committee may provide members of the
public with an opportunity to ask questions about and comment upon the
budget document at the first meeting of the budget committee. If such
opportunity is not provided at the first meeting, the budget committee
shall provide the public with the opportunity to ask questions and make
comments upon the budget document at subsequent meetings.

(3) The budget officer shall publish prior notice of each meeting
of the budget committee held for the purpose of satisfying the
requirements of subsection (1) of this section. The published notice
shall contain the information required under subsection (4) of this
section. However:

(a) If more than one meeting of the budget committee is held for
the purpose of meeting the requirements of subsection (1) of this
section, the budget officer may publish a single notice containing the
required information for all of the meetings to be held for the purpose
of meeting the requirements of subsection (1) of this section; and

(b) If the budget committee holds two or more meetings under
subsection (1)(b) of this section for the purpose of taking questions and
comments from the public, then:

(A) Only notice of the first meeting held for the purpose of taking
questions and comments from the public need be published in accordance
with the requirements of this subsection, and notice of any subsequent
meeting held for the purpose of taking questions and comments from the
public may be given as provided in ORS 294.406 (2); and

(B) If notice is published for a meeting to be held for the purpose
of taking questions and comments from the public and it is subsequently
determined that the meeting is not needed, notice of cancellation of the
meeting shall be published as provided in ORS 294.406 (2).

(4) A notice meets the requirements of this subsection when it
states:

(a) The purpose, time and place of the meeting or meetings to which
the notice relates and the place where the budget document is available;

(b) That the meeting is a public meeting where deliberations of the
budget committee will take place; and

(c) If the meeting described in the notice is a meeting at which
the budget committee will receive questions and comments from members of
the public, that any person may ask questions about and comment on the
budget document at that time.

(5) When notice of a meeting of the budget committee is published
by publication in a newspaper, the notice satisfies the requirements of
this section if the notice is published on not fewer than two occasions
separated by at least five days, with the first publication not earlier
than 30 days prior to the meeting date and the final publication not
later than five days prior to the meeting date. When notice of a meeting
of the budget committee is published by mailing or by hand delivery, the
notice satisfies the requirements of this section if the notice is placed
with the United States Postal Service or hand delivered not later than 10
days prior to the meeting date.

(6) At any time prior to the meeting of the budget committee at
which the budget committee will receive the budget message and the budget
document, the budget officer may provide a copy of the budget document to
each member of the budget committee for the information and use of the
individual member.

(7) Except when copies of the budget document were provided to the
members of the budget committee under subsection (6) of this section, the
budget officer shall submit to the members of the budget committee the
budget document at the first meeting held under subsection (1) of this
section for their use and consideration.

(8) The budget officer shall file a copy of the budget document in
the office of the governing body of the municipal corporation immediately
following presentation of the budget document to the members of the
budget committee under subsection (6) or (7) of this section. The copy
shall become a public record of the municipal corporation.

(9) The governing body shall either provide the means of
duplicating the budget or part thereof, in those situations where the
budget document or portion thereof may be quickly reproduced, or shall
provide copies of the budget document or part thereof so that a copy of
the budget document or part thereof may be readily obtained by any
individual interested in the affairs of the municipal corporation. [1963
c.576 §19; 1965 c.451 §5; 1971 c.516 §2; 1989 c.504 §1; 1997 c.308 §13;
1999 c.632 §6] (1)
The budget committee shall approve the budget document as submitted by
the budget officer or the budget document as revised and prepared by the
budget committee. The budget document as approved by the budget committee
shall specify the ad valorem property tax amount or rate for all funds.

(2) In addition to the meetings held under ORS 294.401 (1), the
budget committee may meet from time to time at its discretion. All
meetings of the budget committee shall be open to the public. Except for
a meeting of the budget committee held under ORS 294.401 (1), prior
notice of each meeting of the budget committee shall be given at the same
time as is required for notice of meetings of the governing body of the
municipal corporation and may be given in the same manner as notice of
meetings of the governing body or by any one or more of the methods
described in ORS 294.311 (34).

(3) The budget committee may demand and receive from any officer,
employee or department of the municipal corporation any information the
committee requires for the revision and preparation of the budget
document. The budget committee may compel the attendance of any such
officer or employee at its meetings. [1963 c.576 §20; 1965 c.451 §6; 1997
c.308 §14; 1997 c.541 §336a; 1999 c.632 §7; 2001 c.104 §103; 2001 c.135
§13](1) Each municipal corporation having a
population not exceeding 200,000, located in a county having a tax
supervising and conservation commission and not submitting its budget
document to the tax supervising and conservation commission for a public
hearing, pursuant to ORS 294.430 (3), shall submit its approved budget
document to the tax supervising and conservation commission in the county
at least 30 days prior to the date of the public hearing in accordance
with ORS 294.430. If its territory lies in two or more counties, the
municipal corporation shall submit its budget to the commission if the
real market value of all property subject to taxation by the municipal
corporation in the county having a commission is greater than the real
market value of all property subject to taxation by the municipal
corporation in any other county. Real market value is the real market
value computed according to ORS 308.207 from the assessment rolls last in
the process of collection.

(2) Before adopting the budget, the governing body for a municipal
corporation described in subsection (1) of this section shall consider
and take appropriate action on any orders, recommendations or objections
made by the tax supervising and conservation commission. [1963 c.576 §21;
1969 c.155 §1; 1991 c.459 §6; 1997 c.308 §15; 1999 c.632 §8] Format for publication of
notices and summaries required by ORS 294.416 shall be prescribed by the
Department of Revenue. [1971 c.516 §9; 1983 c.549 §1; 1993 c.742 §46;
1997 c.308 §16]Except as provided in ORS 294.418, there shall be published, as
provided in ORS 294.421:

(1) A summary of the budget as approved by the budget committee and
compared with the actual expenditures and budget resources of the
preceding year or preceding budget period and the budget summary of the
current year or current budget period in accordance with forms prescribed
by the Department of Revenue in the manner provided in ORS 294.413. The
summary shall be of sufficient detail to inform the citizens of the
municipal corporation of the proposed financial plan for the ensuing year
or ensuing budget period. As a minimum requirement, the personnel
services, the major expense items under materials and services and
capital outlay for each organizational unit or activity of each fund and
the major items for debt service, special payments, and operating
contingencies for each fund shall be listed separately. The summary shall
show the major items of budget resources. As used in this subsection, the
term “program” may be substituted for the term “organizational unit” for
municipal corporations which prepare program budgets.

(2) The financial summary prepared under ORS 294.386 for the
ensuing year or ensuing budget period and for the current year or current
budget period.

(3) A notice of the time and place at which the budget document as
approved by the budget committee may be discussed with the governing body.

(4) A statement that the budget is prepared in accordance with the
basis of accounting used in the preceding year or preceding budget period
unless a change in the basis of accounting is anticipated. If a change in
the basis of accounting is to be made, there shall be an explanation of
the change and the effects of the change.

(5) A notice of the place where the complete budget document is
available for inspection by the general public during regular business
hours and where copies of the complete budget document may be obtained.
[Formerly 294.360; 1965 c.451 §7; 1971 c.516 §3; 1979 c.686 §6; 1997
c.308 §17; 2001 c.135 §14] In lieu of the
publication requirements contained in ORS 294.416, a municipal
corporation may elect to publish its budget as provided in this section.

(1) There shall be published, as provided in ORS 294.421, a summary
of the budget as approved by the budget committee and compared with the
budget summary of the preceding year or preceding budget period and the
budget summary for the current year or current budget period. As a
minimum requirement, there shall be listed the total requirements for
personal services, materials and services, capital outlay, special
payments, debt service, transfers and operating contingencies for the
budget. In addition, there shall be published a brief narrative
description of the major activities or major programs of the municipal
corporation and the prominent changes from the current year or current
budget period. Information shall be furnished showing the personnel
requirement changes for each major activity or major program. The
narrative shall state the major resources for financing each major
activity or program and the prominent changes from the current year or
current budget period, or shall state that each major activity or program
is financed from general resources of the governmental unit. The summary
for the ensuing year or ensuing budget period and for the current year or
current budget period shall show total budgeted requirements, total
estimated resources other than ad valorem property taxes and estimated ad
valorem property tax revenues, stated in dollars and cents. The summary
shall also state the municipal corporation’s operating tax rate and the
amount or rate of any other ad valorem property taxes to be certified to
the assessor. Tax rates shall be expressed at a rate per thousand dollars
of assessed value. The summary shall include an analysis of ad valorem
property taxes for the current and ensuing years or budget periods that
are outside of the municipal corporation’s permanent rate limit or
statutory rate limit, if applicable, showing local option taxes and ad
valorem property taxes for meeting payments on bond, principal and
interest thereon and for meeting other obligations of the municipal
corporation described under section 11 (5), Article XI of the Oregon
Constitution.

(2) There shall be published with the summary:

(a) A notice of the time and place at which the budget document as
approved by the budget committee may be discussed with the governing body.

(b) A statement that the budget is prepared in accordance with the
basis of accounting used in the preceding year or budget period unless a
change in the basis of accounting is anticipated; and if a change in the
basis of accounting is to be made, there shall be an explanation of the
change and the effects of the change.

(c) A notice of the place where the complete budget document is
available for inspection by the general public during regular business
hours and where copies of the complete budget document may be obtained.
[1971 c.516 §5; 1979 c.686 §7; 1997 c.308 §18; 1997 c.541 §330; 2001
c.135 §15](1) Subject to subsections (3) to (6) of this section, the summary
of the budget document approved by the budget committee shall be
published at least once prior to the time appointed for the proposed
meeting of the governing body in accordance with ORS 294.430.

(2) Subject to subsections (3) to (6) of this section, the notice
of the time and place at which the budget document as approved by the
budget committee may be discussed shall be published by one or more of
the methods described in ORS 294.311 (34) not less than five days and not
more than 30 days prior to the date of the meeting required by ORS
294.430.

(3) If no newspaper is published in the municipal corporation, a
municipal corporation whose aggregate of estimated budget expenditures
for the ensuing fiscal year does not exceed $50,000 or for the ensuing
budget period does not exceed $100,000 may, in lieu of the publication
and notice provided in subsections (1) and (2) of this section and in
lieu of publication by one or more of the methods described in ORS
294.311 (34), post the summaries and notices provided by ORS 294.416 or
294.418 in three conspicuous places in the municipal corporation for at
least 20 days prior to the date of the meeting provided in ORS 294.430
and publish the notice provided by subsection (4) of this section.

(4) If notice is given as provided in subsection (3) of this
section, the municipal corporation shall publish, by one or more of the
methods described in ORS 294.311 (34), a notice of the following:

(a) The date, time and place of the meeting provided by ORS 294.430;

(b) The place where the complete budget document is available for
inspection by the general public during regular office hours;

(c) Total budget requirements and taxes proposed to be levied;

(d) Changes in the amount or rate of proposed ad valorem property
taxes; and

(e) The place where copies of the complete budget or parts thereof
may be obtained.

(5) The notice provided in subsection (4) of this section shall be
published not less than five days and not more than 30 days prior to the
date of the meeting provided in ORS 294.430.

(6) A municipal corporation having a population exceeding 200,000
inhabitants, or a municipal corporation with 200,000 or fewer inhabitants
that requests the tax supervising and conservation commission to conduct
the public hearing outlined in ORS 294.430, shall, in lieu of the
publication and notice prescribed in subsection (1) of this section,
submit its budget document, as approved by the budget committee, to the
tax supervising and conservation commission within its county, if there
is such a commission, at least 20 days prior to the legal date of the
public hearing before the tax supervising and conservation commission on
the budget, and the budget document shall thereupon be open to inspection
by any taxpayer or citizen. The municipal corporation shall also publish
a notice as provided in subsections (4) and (5) of this section.
[Formerly 294.365; 1965 c.451 §8; 1967 c.525 §1; 1969 c.155 §2; 1971
c.516 §6; 1991 c.459 §7; 1997 c.308 §19; 1997 c.541 §331; 1999 c.632 §9;
2001 c.104 §104; 2001 c.135 §16](1) When a notice,
budget summary or other document is required to be published under any
provision of ORS 294.305 to 294.565, publication of the document shall be
considered sufficient for all purposes if a good faith effort is made by
the budget officer of the municipal corporation to publish by any one or
more of the methods described in ORS 294.311 (34), notwithstanding any
defect in the publication, including but not limited to:

(a) Typographical or scriveners’ errors in the published material;

(b) Failure of the published materials to be mailed or hand
delivered to each street address within the jurisdictional boundaries of
the municipal corporation;

(c) Arithmetic errors in computing numerical information, including
tax levies or tax rates;

(d) Calculations of ad valorem property taxes not made in
accordance with the applicable requirements of law; or

(e) Failure to publish within the time periods required by law.

(2) At the first regularly scheduled meeting of the governing body
of the municipal corporation that is held following the discovery of any
publication error described in subsection (1)(a), (c) or (d) of this
section, the budget officer shall advise the governing body in writing of
the error and shall correct the error by testimony before the governing
body at the meeting. If the error relates to the calculation of ad
valorem property taxes, the budget officer shall immediately notify the
county assessor of the error in writing, identifying the correct ad
valorem property tax. [Formerly 294.415; 1997 c.308 §20; 1997 c.541
§336b; 1999 c.632 §10; 2001 c.104 §105; 2001 c.135 §17](1) Except as
provided in subsections (2) and (3) of this section, the governing body
of a municipal corporation shall meet at the time and place designated in
the notice of meeting required by ORS 294.416 for the purpose of holding
a public hearing on the budget document as approved by the budget
committee. At the meeting any person may appear for or against any item
in the budget document.

(2) Each municipal corporation having a population exceeding
200,000 and located in a county having a tax supervising and conservation
commission, shall, in lieu of the meeting provided for in subsection (1)
of this section, submit its budget document to the tax supervising and
conservation commission of the county. The governing body of such
municipal corporation or its representatives shall meet with the
taxpayers thereof at a public hearing to be called and conducted by the
tax supervising and conservation commission.

(3) Any municipal corporation having a population not exceeding
200,000 and located in a county having a tax supervising and conservation
commission, may, in lieu of the meeting provided for in subsection (1) of
this section, submit its budget document to the tax supervising and
conservation commission of the county for a public hearing. The governing
body of such municipal corporation or its representatives shall meet with
the taxpayers thereof at a public hearing to be called and conducted by
the tax supervising and conservation commission.

(4) If its territory lies in two or more counties, a municipal
corporation subject to subsection (2) of this section shall, and a
municipal corporation subject to subsection (3) of this section may,
submit its budget document to the tax supervising and conservation
commission for public hearing if the real market value of all property
subject to taxation by the municipal corporation in the county with a
commission is greater than the real market value of all property subject
to taxation by the municipal corporation in any other county. Real market
value is the real market value computed according to ORS 308.207 from the
assessment rolls last in the process of collection. [1963 c.576 §24; 1969
c.155 §3; 1991 c.459 §8; 1997 c.308 §21](1) After the public
hearing provided for in ORS 294.430 (1) has been held, the governing body
shall enact the proper ordinances or resolutions to adopt the budget, to
make the appropriations, to determine, make and declare the ad valorem
property tax amount or rate to be certified to the assessor for either
the ensuing year or each of the years of the ensuing budget period and to
itemize and categorize the ad valorem property tax amount or rate as
provided in ORS 310.060. Consideration shall be given to matters
discussed at the public hearing. The budget estimates and proposed ad
valorem property tax amount or rate as shown in the budget document may
be amended prior to adoption and may also be amended by the governing
body following adoption if such amendments are adopted prior to the
commencement of the fiscal year or budget period to which the budget
relates. However, the amount of estimated expenditures for each fund in
an annual budget may not be increased by more than $5,000 or 10 percent
of the estimated expenditures, whichever is greater, and the amount of
estimated expenditures for each fund in a biennial budget may not be
increased by more than $10,000 or 10 percent of the estimated
expenditures, whichever is greater, and the amount or rate of the total
ad valorem property taxes to be certified by the municipal corporation to
the assessor may not exceed the amount approved by the budget committee:

(a) Unless the amended budget document is republished as provided
by ORS 294.416 or 294.418 and 294.421 for the original budget and another
public hearing is held as provided by ORS 294.430 (1); or

(b) Except to the extent ad valorem property taxes may be increased
pursuant to ORS 294.437.

(2) After the public hearing provided for in ORS 294.430 (2) or (3)
has been held and the certification of the tax supervising and
conservation commission received, if such certification is required, the
governing body shall enact the proper ordinances or resolutions to adopt
the budget, to make the appropriations, to determine, make and declare
the ad valorem property tax amount or rate for either the ensuing fiscal
year or each of the fiscal years of the ensuing budget period and to
itemize and categorize the ad valorem property tax amount or rate as
provided in ORS 310.060. Consideration shall be given any orders,
recommendations or objections made by the tax supervising and
conservation commission in accordance with law. The action taken on each
order, recommendation or objection after such consideration by the
governing body, with the reasons for such action, shall be included in
the ordinance or resolution adopting the budget. A certified copy of the
ordinance or resolution shall be sent to the commission within 15 days
after the date the ordinance or resolution is adopted. The budget
estimates, appropriations and ad valorem property tax amount or rate as
shown in the budget document may be amended prior to adoption and may
also be amended by the governing body following adoption if such
amendments are adopted prior to the commencement of the fiscal year or
budget period to which the budget relates. However, the amount of
estimated expenditures for each fund may not be increased by more than
$5,000 or 10 percent of the estimated expenditures, whichever is greater,
the amount of estimated expenditures for each fund in a biennial budget
may not be increased by more than $10,000 or 10 percent of the estimated
expenditures, whichever is greater, and the amount or rate of the total
ad valorem property taxes to be certified by the municipal corporation to
the assessor may not exceed the amount shown in the budget document at
the time of the budget hearing:

(a) Unless the amended budget document is resubmitted to the tax
supervising and conservation commission for another public hearing, and
for recommendations or objections of that body; or

(b) Except to the extent ad valorem property taxes may be increased
pursuant to ORS 294.437.

(3) The appropriations required by subsections (1) and (2) of this
section shall, as a minimum, contain one amount for each organizational
unit or program of each fund. In addition, separate amounts shall be
appropriated in each fund for debt service, special payments, interfund
revenue transfers, capital outlay, operating expenses which cannot be
allocated to an organizational unit or program and operating
contingencies. If the governing body so desires, it may appropriate
separate amounts for activities within an organizational unit or program.
For those municipal corporations where the term “organizational unit” has
no application, the appropriations shall contain separate amounts for
personal services, materials and services, capital outlay, debt service,
special payments, interfund revenue transfers and operating contingency
for each fund.

(4) Thereafter no greater expenditure, or encumbrance if
encumbrance accounting is used, of public money shall be made for any
specific purpose other than the amount appropriated therefor except as
provided in ORS 294.326, 294.440, 294.450 and 294.480.

(5) The determination of the amount or rate of ad valorem property
taxes to be certified shall be entered in the proper records of the
governing body. Except as provided in ORS 294.437, no greater tax than
that so entered upon the record shall be certified by the municipal
corporation proposing the tax for the purpose or purposes indicated.

(6) Nothing contained in this section shall preclude a governing
body during the fiscal year or budget period by appropriate ordinance or
resolution, after public hearing, from adjusting budgeted resources and
reducing appropriations to reflect a decrease in available resources.

(7)(a) The governing body shall determine, make and declare ad
valorem property taxes under subsections (1) and (2) of this section as a
rate per $1,000 of assessed value if the taxes are operating taxes or
rate-based local option taxes as a rate per $1,000 of assessed value.

(b) The governing body shall determine, make and declare ad valorem
property taxes under subsections (1) and (2) of this section as an amount
if the taxes are being certified as amount-based local option taxes, to
pay principal and interest on exempt bonded indebtedness or to pay other
government obligations described in section 11 (5), Article XI of the
Oregon Constitution. [1963 c.576 §25; 1965 c.451 §9; 1969 c.682 §1; 1971
c.516 §7; 1977 c.305 §2; 1979 c.310 §5; 1979 c.686 §8a; 1993 c.270 §3;
1997 c.308 §22; 1997 c.541 §332; 1999 c.632 §11; 2001 c.135 §18; 2001
c.753 §5; 2003 c.14 §145](1) Following the adoption of a budget under ORS
294.435 that does not include revenue from a proposed local option tax,
if a municipal corporation places a local option tax measure on the
ballot for an election held in September and the electors of the
municipal corporation approve the measure, in order to impose the local
option tax during the current fiscal year or current budget period the
governing body of the municipal corporation must:

(a) Adopt an ordinance or resolution to determine, make and declare
the local option tax and to categorize the local option tax amount or
rate as provided in ORS 310.060;

(b) Receive from the assessor of the county in which the municipal
corporation is located (or, if the municipal corporation is located in
more than one county, from the assessor of each county in which the
municipal corporation is located) written approval to file a supplemental
notice of property tax as described in ORS 310.060 (9); and

(c) File with the assessor of the county in which the municipal
corporation is located (or, if the municipal corporation is located in
more than one county, with the assessor of each county in which the
municipal corporation is located) two copies of the ordinance or
resolution described in paragraph (a) of this subsection, two copies of
the supplemental notice of property tax required under ORS 310.060 and
two copies of the approved local option tax measure.

(2) Funds raised by a local option tax described in this section
may not be expended by the municipal corporation unless the municipal
corporation has adopted a supplemental budget in accordance with ORS
294.480. Funds may be expended only in accordance with the supplemental
budget so adopted.

(3) As soon as received, the county assessor shall forward one copy
of each of the documents described in subsection (1)(c) of this section
to the Department of Revenue. [2001 c.753 §4]Note: 294.437 was added to and made a part of 294.305 to 294.565 by
legislative action but was not added to any smaller series therein. See
Preface to Oregon Revised Statutes for further explanation.Whenever the board of directors of any school
district or the board of education of any community college district has
declared the existence of an emergency necessitating a greater
expenditure of public money for any specific purpose or purposes than the
amount appropriated therefor in order to provide or maintain and operate,
or both, adequate school or college facilities, supplies and personnel
for the proper instruction of the pupils who are attending or will attend
the public schools or college within such district during the remainder
of the budget year, such board may make excess expenditures for such
specific purpose or purposes beyond the amount appropriated therefor to
the extent that all funds for such excess expenditures are:

(1) Advanced or committed to such district by apportionment, grant,
contribution or allocation from the United States, or any agency thereof.
In connection therewith, the district may enter into and carry out any
plan of financing sponsored by the United States, or any agency thereof,
upon such terms and conditions and subject to such lawful rules and
regulations as may be prescribed by the United States, or a proper agency
thereof;

(2) Made available to a common or union high school district by the
education service district board from an emergency aid fund established
under ORS 334.370. [1963 c.576 §26; 1971 c.513 §58; 1983 c.740 §84] In the
exercise of the authority granted by ORS 288.165, 328.565 and 341.715,
specific provision for interest must be contained in duly adopted
budgets. However, reporting of anticipated loan proceeds and related
principal repayments within a particular fiscal year or budget period may
be accomplished in narrative form or by footnoted schedules to the duly
adopted budget and need not be included as a budgetary resource or
requirement. Such narrative or footnoted disclosure must indicate that
principal repayments are a liability of the applicable fund from which
they are made. [1985 c.356 §3; 1993 c.97 §16; 2001 c.135 §19](1) A municipal corporation shall record its revenues and
expenditures, on a fund by fund basis, using either the cash basis, the
modified accrual basis or the accrual basis of accounting.

(2) The selection of the basis of accounting is left to the
discretion of each municipal corporation. Any change in the basis of
accounting shall be clearly set forth in the budget message for the
fiscal year or budget period in which the change is contemplated and the
reasons for the change and its effect on the operations of the municipal
corporation shall be explained. Once a new basis of accounting is
adopted, it shall be followed in the year or period for which the budget
was prepared and each succeeding year or period thereafter until changed
in a subsequent budget. Such change must be published as provided in ORS
294.416 (3). [1963 c.576 §28; 1977 c.305 §3; 1997 c.308 §23; 2001 c.135
§20](1) As used in this section “extended ADMw”
means:

(a) For a school district the district extended ADMw as calculated
under ORS 327.013.

(b) For an education service district the sum of the extended ADMw
of the component school districts of the education service district.

(2) Notwithstanding ORS 294.445, a school district or education
service district that uses the accrual basis method of accounting may
include as accrued revenues in the budget and financial statement of the
school district or education service district, for any fiscal year, an
amount from the next fiscal year that is to be received in the next
fiscal year. The amount accrued under this section may not be greater
than the amount calculated under subsection (3)(b) or (c) of this section
multiplied by the extended ADMw of the school district or education
service district.

(3)(a) For each fiscal year, the Department of Education shall
calculate the amount available in the State School Fund for grants and
distributions to school districts and the amount available for grants and
distributions to education service districts under ORS 327.008, 327.013
and 327.019 based on the appropriations and allocations made to the State
School Fund for that fiscal year by the Legislative Assembly in regular
session. The department may not include in the amount calculated to be
available for school districts under this paragraph the amounts received
by the Youth Corrections Education Program and the Juvenile Detention
Education Program under ORS 327.026 from the State School Fund.

(b) The department shall calculate for school districts an amount
equal to (the amount calculated under paragraph (a) of this subsection
for school districts ¸ 12) ¸the total statewide extended ADMw of all
school districts.

(c) The department shall calculate for education service districts
an amount equal to (the amount calculated under paragraph (a) of this
subsection for education service districts ¸ 12) ¸the total statewide
extended ADMw of all education service districts.

(d) The department may adjust the calculations under this
subsection based on current data for the factors used to calculate the
State School Fund distribution to school districts and education service
districts under ORS 327.008, 327.013 and 327.019.

(e) Notwithstanding paragraph (d) of this subsection, the
department may not adjust the calculation under paragraph (a) of this
subsection based on changes made to the appropriations or allocations to
the State School Fund by the Legislative Assembly in special session or
by rule of the Oregon Department of Administrative Services relating to
allotting funds.

(4) Notwithstanding ORS 294.445, a community college district or
community college service district that uses the accrual basis method of
accounting may include as accrued revenues in the budget and financial
statement of the community college district or community college service
district, for any fiscal year, an amount from the next fiscal year that
is to be received in the next fiscal year. The amount accrued under this
section may not be greater than 25 percent of the amount the community
college district or community college service district received as a
Community College Support Fund grant for the fiscal year for which the
revenues are to be accrued. [2002 s.s.4 c.1 §5; 2003 c.96 §§1,2]Note: 294.447 was added to and made a part of 294.305 to 294.565 by
legislative action but was not added to any smaller series therein. See
Preface to Oregon Revised Statutes for further explanation.Subject to the
provisions contained in the charter of any city or county or in any law
relating to municipal corporations:

(1) Except as provided in subsection (2) of this section, transfers
of appropriations may be made within a given fund when authorized by
official resolution or ordinance of the governing body. The resolution or
ordinance shall state the need for the transfer, the purpose for the
authorized expenditure and the amount of appropriation transferred.

(2) Transfers of general operating contingency appropriations which
in aggregate during a fiscal year or budget period exceed 15 percent of
the total appropriations of the fund may be made only after adoption of a
supplemental budget prepared for that purpose. All other transfers of
general operating contingencies are subject to subsection (1) of this
section.

(3) Transfers of appropriations or of appropriations and a like
amount of budget resources may be made from the general fund of the
municipal corporation to any other fund when authorized by an official
resolution or ordinance of the governing body. The resolution or
ordinance shall state the need for the transfer, the purpose for the
authorized expenditures embodied in the appropriation and the amount of
appropriation transferred.

(4) It shall be unlawful to transfer appropriations from any
special revenue fund to the general fund or any other special revenue
fund.

(5) The transfers referred to in this section apply to transfers
which occur after the budget has been approved and which are made during
the fiscal year or budget period for which the appropriations are made.
Nothing in this section shall prohibit or regulate lawful transfers which
have been budgeted in accordance with the local budget law.

(6) When a municipal corporation imposes taxes, fees or charges
that, in accordance with applicable law or an intergovernmental agreement
under ORS chapter 190, are required to be paid, on a pass-through basis,
to another municipal corporation, the municipal corporation that imposes
the taxes, fees or charges shall include the taxes, fees or charges in
its budget and shall appropriate the estimated amount generated thereby.
The appropriation shall take the form of an expense of the municipal
corporation that imposes the taxes, fees or charges. If the actual amount
collected from the taxes, fees or charges during a fiscal year or budget
period exceeds the estimated amount included in the imposing municipal
corporation’s budget for the fiscal year or budget period, then upon
determining that such excess exists the municipal corporation imposing
the taxes, fees or charges shall appropriate such excess by means of a
resolution or ordinance of its governing body, and no further action
shall be required under ORS 294.305 to 294.565 to lawfully budget,
appropriate or expend such excess. [1963 c.576 §27; 1975 c.569 §1; 1979
c.310 §6; 1997 c.308 §24; 1999 c.632 §12; 2001 c.135 §21]If property has been involuntarily
converted or destroyed during the current year or current budget period
or if, as a result of civil disturbance, fire, flood, earthquake or other
calamity or natural disaster, it is necessary for a municipal corporation
to expend funds, receive grants or borrow moneys that were not included
in the budget for the current year or current budget period,
authorization of all matters necessary in order for the municipal
corporation to receive those grants or borrow those moneys may be made by
ordinance or resolution of the governing body, and appropriations for the
estimated expenditures out of any source of available funds, including
but not limited to unappropriated fund balances, shall be made by
resolution or ordinance in the same manner as provided in ORS 294.450
(1), or by supplemental budget as provided by ORS 294.480 (3) and (4).
When prompt action is necessary to protect the public health or safety
following the involuntary conversion or destruction of property or the
occurrence of a calamity or natural disaster and if it is not practical
to convene a meeting of the governing body of the municipal corporation,
the chief executive officer of the municipal corporation may, by written
order, authorize the immediate expenditure of funds from any available
source to redress the situation that threatens the public health or
safety. [1963 c.576 §27a; 1965 c.451 §10; 1991 c.573 §2; 1997 c.308 §25;
2001 c.135 §22]