(2) The department and the council shall enter into an agreement for the council to exercise exclusive care, custody and control over fairground properties and facilities owned by the department. The agreement shall provide for the council to make periodic payments to the State of Oregon for the leasing of the fairground properties and facilities. The agreement may not establish a fixed term in excess of 10 years, but may provide for renewal. Notwithstanding any fixed term for the agreement, the Legislative Assembly may terminate the agreement by law if the conducting of the Oregon State Fair, the carrying out of fairground business operations and the operation of fairground properties and facilities by the council results in a net loss in three of any five consecutive years. If the Legislative Assembly terminates the agreement, the department may dispose of any fairground properties and facilities owned by the department. The department and the council may modify the agreement terms and conditions by mutual consent to the extent consistent with this chapter.

(3) If any state agency has incurred an obligation for the purpose of paying for the construction, repair or remodeling of fairground properties or facilities, and the obligation remains outstanding at the time the agreement described in subsection (2) of this section is negotiated, the agreement shall provide for all or part of the periodic payments by the council to be credited to an appropriate account established in the State Treasury pursuant to ORS 291.001 (3) to compensate the obligated agency for the amounts coming due under the obligation. The agreement shall give priority to the full compensation of an obligated agency for any amounts coming due on revenue bonds payable from the revenues of fairground business operations or from the operation of fairground properties and facilities, including but not limited to revenue bonds issued under ORS 565.095 as set forth in the 2011 Edition of Oregon Revised Statutes.

(4) If any fairground properties or facilities owned by the department are sold, the department shall ensure that any net proceeds of the sale are applied as provided in this subsection. Net sale proceeds shall be applied according to the following priorities:

(a) First, for the repair and maintenance of other fairground properties or facilities owned by the department.

(b) Second, for the payment of any bonds secured by the property or facility sold.

(c) Third, for the payment of any bonds payable out of Oregon State Fair revenues or other fairground revenues.

(d) Fourth, for the acquisition of new fairground properties or facilities or other new properties and facilities for the conducting of the Oregon State Fair or for deposit to fairground property and facility acquisition accounts described in ORS 565.545 (1).

(5) The agreement described in subsection (2) of this section shall provide for appropriate apportionment between the council and the department of any insurance proceeds paid in compensation for loss involving fairground properties or facilities.

(6) Notwithstanding subsection (2) of this section, the department may seek an appropriation from the Legislative Assembly or the Emergency Board for moneys to support the conducting of the Oregon State Fair, the carrying out of fairground business operations, the operation of fairground properties and facilities or the repair, maintenance or insurance of fairground properties and facilities, if the council and the department agree that the existing and projected financial resources of the council are inadequate to conduct the Oregon State Fair, to carry out fairground business operations, to operate fairground properties and facilities, to make necessary repairs to fairground properties and facilities or to adequately maintain and insure fairground properties and facilities. Any appropriation to the department shall be expended and accounted for by the department as provided by law. [2013 c.492 §7; 2016 c.118 §6; 2017 c.485 §1]