(2) When authorized by law to secure obligations with property of the State of Oregon, a state agency, or the State Treasurer acting under the State Treasurer’s own authority or on behalf of a state agency with the approval of the state agency, may pledge all or a portion of the property as security for payment of the obligations and for performance of a covenant or agreement entered into in relation to the issuance of the obligations.
(3) The lien created by a pledge described in subsection (2) of this section is valid and binding from the time the pledge is made. Pledged property is subject immediately to the lien of the pledge without physical delivery, filing or any other act.
(4) Except as otherwise expressly provided in an operative document, the lien of the pledge is superior to and has priority over all other claims and liens of any kind.
(5) When property subject to a pledge is acquired by the State of Oregon after the pledge is made:
(a) The property is subject to the lien upon acquisition by the State of Oregon without physical delivery, filing or any other act; and
(b) The lien relates back to the time the pledge was originally made.
(6)(a) The State Treasurer, or the related agency, may reserve the right to pledge property as security for a subsequently issued obligation.
(b) If the State Treasurer or related agency reserves the right described in paragraph (a) of this subsection, subject to the terms of the operative document that created the previous pledge, the lien of the subsequent pledge may be on a parity or pari passu basis with the lien of the previous pledge, on a prior and superior basis with the lien of the previous pledge or on a subordinate basis with the lien of the previous pledge, as specified in the operative document creating the subsequent pledge. The lien of the subsequent pledge:
(A) Has the priority specified in the operative document creating the subsequent pledge; and
(B) Is superior to and has priority over other claims and liens of any kind except the lien of a pledge with which the lien of the subsequent pledge is on a parity or subordinate basis, as specified in the operative document.
(7) Except as provided in subsection (8) of this section, a pledgee may commence an action in a court of competent jurisdiction to foreclose the lien of the pledge and exercise rights and remedies available to the pledgee under the operative document.
(8) When pledged property is in a fund for debt service reserves or payments, a pledgee may foreclose the lien of the pledge by applying the property to the payment of obligations subject to the terms, conditions and limitations in the operative document.
(9) An initiative or referendum measure approved by the electors of the State of Oregon that purports to change statutory provisions affecting rates, fees, tolls, rentals or other charges may not be given any force or effect if to do so would impair existing covenants made with holders of existing obligations regarding the imposition, levy or collection of the rates, fees, tolls, rentals or other charges pledged to secure outstanding obligations.
(10) If authorized by law other than this section to set rates, fees or other charges that are pledged to pay obligations, a state agency may enter into rate covenants. Rate covenants authorized by this subsection may obligate a state agency to periodically set the rates and charges:
(a) That generate pledged revenues at specific levels including, but not limited to, a specific monetary charge for each unit of commodity or service provided or a schedule of rates and charges that includes fixed and variable components;
(b) At levels sufficient to maintain underlying credit ratings assigned to obligations by one or more nationally recognized credit rating services without regard to any improvement in credit ratings due to the provision of additional security for the obligations by a credit enhancement device;
(c) That generate pledged revenues each year in amounts at least equal to operations and maintenance expenses of the state agency that produces the pledged revenues, plus debt service on obligations, plus an additional amount that is reasonably required to obtain favorable terms for the obligations; or
(d) In accordance with a formula established in the operative document governing obligations. The formula may provide for rates to be determined by reference to factors including, but not limited to:
(A) Historical operating expenses;
(B) Projected future operating expenses;
(C) The funding of depreciation;
(D) The costs of capital improvements;
(E) The costs of complying with contractual requirements and covenants;
(F) The costs of complying with regulatory requirements;
(G) Reports of independent consultants regarding the required level of pledged revenues;
(H) Debt service on the obligations; and
(I) The funds needed to establish or maintain reserves required by law or contract and the funds needed to maintain an unencumbered carryforward fund balance or working capital to meet unanticipated expenses or fluctuations in revenues that may arise.
(11) A rate covenant authorized by this section is a contract that binds the State of Oregon and is enforceable against the State of Oregon in accordance with the terms of the rate covenant.
(12) The State Treasurer, or a related agency with the approval of the State Treasurer, may pledge the full faith and credit of the State of Oregon as security for the payment of general obligation bonds. A pledge of the full faith and credit authorized by this subsection does not, by itself, create a lien on the revenues or property of the state. [2007 c.783 §18]