A. No public trust, school district or county shall issue any bonds, notes, certificates of participation, certificates of indebtedness or any other evidence of indebtedness, excluding nonpayable warrants and agreements with a depository bank to honor payment of checks when there are insufficient funds, for the purpose of short-term cash management by any school district or county unless such school district or county shall have been approved for participation by the Oklahoma Commission on School and County Funds Management.

As used in this section, "short-term cash management" means any borrowing or any method employed by a school district or county to obtain funds in advance of the receipt of tax revenue, and shall include, but not be limited to, the issuance of certificates of indebtedness, certificates of participation, tax-anticipation notes, bonds, notes, or any other evidence of indebtedness. It shall not include debt issued pursuant to a vote of the electors of the school district or county pursuant to the Constitution.

B. The Oklahoma Commission on School and County Funds Management, shall consist of the State Superintendent of Public Instruction, the Director of the Oklahoma Department of Career and Technology Education, and the State Bond Advisor. The Commission shall:

1. Receive requests of school districts and counties for authorization to participate in a short-term cash management program where the proceeds will be used to facilitate cash-flow management. The requests must be received by the Commission on or before April 1 in order for the school district or county to be considered for participation during the next fiscal year, unless such date is extended by the Commission;

2. Within five (5) business days of receiving a request, forward the request to the appropriate certifying authority. If the request and accompanying material meet the requirements of this act, the certifying authority must return the request and accompanying information to the Commission with a written review and comment within sixty (60) days of receipt of the request from the Commission. The certifying authority for school districts shall be the State Superintendent of Public Instruction and for technology center school districts, shall be the Director of the Oklahoma Department of Career and Technology Education and for counties, shall be the State Board of Equalization;

3. Approve or reject each request for participation, and forward notice of the decision of the Commission to the requesting school district or county and to the Office of the Governor. The Commission shall approve or reject a request within thirty (30) days following the date it receives the request and accompanying information with a written review and comment from a certifying authority;

4. Certify the need for funds generated by the proposed short-term cash management based on the financial projections of the school district or county, including the projected cash-flow shortfall, estimated income, and anticipated surplus balances on June 30 of the current fiscal year in the general and building funds of the school district or county. Accumulative cash-flow shortfall projections must be determined using the method specified by Section 148 of the Internal Revenue Code;

5. Establish reasonable limits for fees, commissions and other compensation paid to any person or firm involved with the proposed short-term cash management program;

6. Establish participation limitations for a school district or a county using the method specified in Section 148 of the Internal Revenue Code. No school district or county shall participate in a short-term cash management program in an amount which exceeds the determination of need pursuant to the accumulative cash-flow projections as specified in paragraph 4 of this subsection or forty percent (40%) of the approved annual budget of the school district or county, whichever is less;

7. Establish limitations which prohibit school districts and counties which are participating in a short-term cash management program from issuing nonpayable warrants if proceeds are available from the short-term cash management program;

8. Submit an annual report, by December 15 of each year, to the Speaker of the House of Representatives, the President Pro Tempore of the Senate, the Governor, the State Auditor and Inspector and the Attorney General, detailing the participation of each school district and county for the prior fiscal year in the short-term cash management programs authorized by this act; and

9. Prescribe methods and procedures by which school districts or counties may request authorization to participate in short-term cash management programs.

C. School districts and counties desiring to participate in a short-term cash management program as provided in subsection A of this section shall file a request with the Commission on such forms as the Commission shall prescribe. Such request shall be accompanied by:

1. A resolution adopted by the board of education of the school district or by the county commissioners of a county. Such resolution shall state that the school district or county intends to and has need to participate in a short-term cash management program and that the board of education or county commission has authorized the submission of such request;

2. A letter signed by the underwriter of the short-term cash management program that specifies the name and address of all persons and firms receiving compensation, directly or indirectly, involved with the proposed short-term cash management program. All persons and firms designated shall not be paid out of school or county funds. For purposes of this paragraph, school or county funds shall not include the proceeds from certificates of indebtedness or certificates of participation generated from a short-term cash management program;

3. A verification from the Administrator of the Oklahoma Department of Securities that all persons receiving compensation, directly or indirectly, for providing advice to the school districts or counties concerning participation in the program or for endorsing participation in the program are appropriately registered with the Oklahoma Department of Securities as investment advisers or investment adviser representatives, as applicable, and that all persons receiving compensation, directly or indirectly, for the placement of the certificates of participation or like securities with investors are registered as broker-dealers or agents, as applicable;

4. The estimated income and expenditures of the school district or county for the year for which the school district or county wishes to participate in a short-term cash management program. The appropriate certifying authority shall develop and provide an income and expenditure disclosure form for use by a school district or county which desires to participate in a short-term cash management program which follows the applicable portions of the information return required by Section 148 of the Internal Revenue Code. The information supplied in the disclosure form must reflect the ability of the school district or county to pay off an amount equal to the district's or county's liability on the program from the income from the fiscal year of participation, prior to approval for participation by the Commission. If the Commission determines that a question exists concerning any information submitted pursuant to this subsection, the Commission may request any additional information from the school district or county that it deems necessary;

5. A copy of the most recent information return for a short-term cash management program filed with the Internal Revenue Service pursuant to Section 149(e) of the Internal Revenue Code;

6. An affidavit by all persons, firms, corporations or business enterprises of any kind which provide services for compensation on any financing to implement a short-term cash management program, which shall be signed under oath on a form approved by the Commission and which shall state that such persons, firms, corporations or business enterprises have not given any money or other thing of value, other than a bona fide campaign contribution, to any public official or to any public employee of a school district or county participating in such a cash management program. Any such person, firm, corporation or business enterprise shall also file a disclosure statement on a form approved by the Commission, which shall disclose all campaign contributions of any kind made to any public official of a school district or county participating in such a short-term cash management program and shall also disclose the identity of any officer, director, agent or employee of such person, firm, corporation or business enterprise who is an officer or employee of a school or county participating in a short-term cash management program, or who is related to such officers or employees within the third degree of affinity or consanguinity;

7. A notarized sworn affidavit executed by each member of a board of education of a school district, the superintendent of schools and the treasurer of the school district or by each county commissioner of a county and the county treasurer, which states that the person or any member of the immediate family of the person has no direct or indirect financial interest in the short-term cash management program being requested. The affidavit shall be on a form prescribed by the Commission;

8. A summary report detailing all expenses incurred by a school district or county in participating in a short-term cash management program. The report shall be on a form prescribed by the Commission; and

9. Any application and other materials including any other necessary financial information, as may be required by the Commission.

D. If the information required to be submitted pursuant to this section meets all requirements established by the Commission and the Commission has approved such information and participation, and the participation is otherwise in accordance with law, the Oklahoma Commission on School and County Funds Management shall authorize the participation of the school district or county in the short-term cash management program. The Commission shall notify the school district or county in writing, whether the requirements of this section have been satisfied and approved.

E. School districts and counties participating in a short-term cash management program authorized by this section shall report to the Commission the probable income and expenses of anticipated investment income. The report shall not include probable income or expenses related to participation in a short-term cash management program.

F. The ability of a school district or county to issue general obligation bonds shall not be modified by this act.

G. The Office of the Attorney General shall provide legal assistance to the Oklahoma Commission on School and County Funds Management.

Added by Laws 1985, c. 322, § 44, emerg. eff. July 30, 1985. Amended by Laws 1986, c. 259, § 46, operative July 1, 1986; Laws 1987, c. 204, § 122, operative July 1, 1987; Laws 1987, c. 236, § 111, emerg. eff. July 20, 1987; Laws 1989, c. 374, § 1, emerg. eff. June 6, 1989; Laws 1991, c. 212, § 1, eff. Aug. 1, 1991; Laws 2000, c. 266, § 1, eff. Sept. 1, 2000; Laws 2001, c. 33, § 50, eff. July 1, 2001; Laws 2004, c. 361, § 1, eff. July 1, 2004.