Section 287A.335 - Agreements for exchange of interest rates; rules(1) As used in this section, "counterparty" means an entity with whom a public body enters into an agreement for exchange of interest rates.(2) Upon a finding by a public body that an agreement for exchange of interest rates benefits the public body, the public body may enter into the agreement for exchange of interest rates with a counterparty. An agreement for exchange of interest rates may be made to manage payment, interest rate, spread or similar exposure undertaken in connection with related bonds that: (a) Exist when the agreement for exchange of interest rates is executed;(b) Are reasonably expected to be executed when regularly scheduled payments are due from the issuer under the agreement; or(c) Are identified after the agreement for exchange of interest rates is executed and substituted for related bonds described in paragraph (a) or (b) of this subsection as a result of prepayment, refunding, conversion, ratings changes, redemption, defeasance or other similar event.(3) Upon entering into an agreement for exchange of interest rates under this section and continuing until the agreement is satisfied, terminated or otherwise no longer in effect, provided a payment default has not occurred, the public body may treat the amount or rate of interest on the related bond as the amount or rate of interest payable after giving effect to the agreement for exchange of interest rates for the purpose of calculating: (a) Tax levies to pay regularly scheduled bond debt service; and(b) Other amounts that are based on the rate of interest of the bond.(4) Subject to covenants applicable to a related bond and the limitations of this section, payments required under an agreement for exchange of interest rates may: (a) Be treated as interest payments on the related bond;(b) Be made from revenues or other moneys contributed to or legally available to pay the related bond; and(c) Rank in an order of priority of payment relative to the payment of the related bond as the public body determines.(5) In connection with entering into an agreement for exchange of interest rates, a public body may obtain a credit enhancement device to secure the agreement for exchange of interest rates.(6) An agreement for exchange of interest rates entered into under this section: (a) Is not a debt or other obligation of the issuer for purposes of any limitation upon the indebtedness of the issuer.(b) Is subject only to the limitations of this section and is not subject to other limitations applicable to the related borrowing.(7) A termination payment required to be paid by the public body under an agreement for exchange of interest rates: (a) May be paid from moneys derived from the issuance and sale of revenue bonds.(b) May not be paid from ad valorem property taxes levied outside the limitations of section 11 or 11b, Article XI of the Oregon Constitution.(8) The Oregon Municipal Debt Advisory Commission shall adopt administrative rules establishing required terms, conditions, annual or periodic reporting requirements and other requirements for an agreement for exchange of interest rates entered into by a public body, if the commission determines those requirements are desirable to protect the interests of the public body.(9) A public body may create reserves to pay amounts due under agreements for exchange of interest rates and fund the reserves with moneys derived from the issuance and sale of bonds or from revenues or other moneys described in subsection (4)(b) of this section. 2007 c. 783, § 53; 2009 c. 538, § 8