General Fund · Approach B

A BILL FOR AN ACT

Relating to rural hospital access finance.

Be It Enacted by the People of the State of Oregon:

SECTION 1. As used in sections 1 to 4 of this 2027 Act:

(1) “Authority” means the Oregon Health Authority.

(2)(a) “Hospital” means a facility in this state that is licensed by the authority under ORS 441.025 to provide general hospital services, provides acute inpatient care and operates an emergency department that accepts patients 24 hours each day. For purposes of the systemically important rural hospital designation under section 2 of this 2027 Act, “hospital” includes a facility licensed as a low occupancy acute care hospital if the facility provides those services.

(b) The unit of designation is the licensed hospital at its principal inpatient campus. “Principal inpatient campus” means the site identified as the hospital's main inpatient site on the license or, if the license does not identify the site, the licensed site with the greatest number of beds of the types described in subsection (3)(a) of this section. The authority shall resolve a tie by using the site with the greatest number of acute inpatient discharges in the most recent 12 completed calendar months for which complete data are available. If a tie remains, the authority shall use the main inpatient practice location in the hospital's current Medicare provider agreement if that location is one of the tied sites. If the preceding tests do not identify a site, the authority shall identify which tied site principally provides emergency stabilization and receives inpatient transfers based on documented service volumes or, if comparable volumes are unavailable or equal, the hospital's emergency and referral service plans. The authority shall state its reasons in the order under section 3 of this 2027 Act. A hospital may receive only one designation as a systemically important rural hospital for the same principal inpatient campus.

(c) A hospital may not combine the beds, licensure, admissions, Medicare classifications or service capabilities of a separately licensed facility to meet a criterion in section 2 of this 2027 Act. A parent organization, health system, outpatient site or satellite without a separately licensed acute inpatient hospital is ineligible to hold a separate designation.

(3)(a) “Licensed acute inpatient beds” means the maximum number of beds that the authority authorizes in writing under the hospital's license for general acute inpatient care at the principal inpatient campus on the applicable measurement date. Count a bed used for swing-bed services once if it is also licensed for general acute inpatient care. Exclude beds licensed solely for psychiatric, rehabilitation, long term care or other special inpatient services, observation stations that are not licensed for inpatient care and beds authorized only during a declared emergency. Include beds licensed for general acute inpatient care even if they are temporarily unstaffed or unoccupied.

(b) The authority shall use the license and its approved schedules or a written determination by the authority's licensing program based on those records. A count of staffed, occupied or federally reported beds does not establish licensed capacity under this subsection.

(4) “Nonmetropolitan location” means a principal inpatient campus physically located in an Oregon county that is outside a metropolitan statistical area identified in Office of Management and Budget Bulletin No. 23-01, issued July 21, 2023. A county's inclusion in a micropolitan statistical area or combined statistical area does not establish its inclusion in a metropolitan statistical area. A Medicare geographic adjustment, wage-index reclassification or treatment as rural for payment purposes does not change the hospital's physical location under this subsection.

(5) “Dual federal classification” means that the Centers for Medicare and Medicaid Services or its authorized contractor classifies the same hospital, in relation to the same principal inpatient campus and under the hospital's active inpatient prospective payment system provider agreement, as both a sole community hospital under 42 C.F.R. 412.92 and a rural referral center under 42 C.F.R. 412.96. The classifications must be simultaneously in effect on the measurement date. The authority shall establish the effective dates and the facility to which the federal determinations apply. An administrative payment file is evidence of status and must be reconciled with a later, conflicting or superseding determination, including a conversion to a critical access hospital.

(6) “Functional criteria” means that the hospital:

(a) Has a nonmetropolitan location and provides general acute inpatient medical and surgical care, emergency stabilization and the ability to receive and care for patients transferred from another facility when medically appropriate. The hospital must maintain operative transfer arrangements for patients who require services that the hospital does not provide;

(b) Routinely provides at least one specified hospital service described in subsection (7) of this section at the hospital's principal inpatient campus and, for at least one such service, satisfies the 45-minute ordinary motor vehicle travel requirement in subsection (9) of this section; and

(c) In each of the two most recent completed calendar years, had a share of acute inpatient discharges of at least 20 percent as calculated under paragraph (d) of this subsection and admitted at least 50 acute inpatients by documented direct transfer from at least two other separately licensed health care facilities. Do not count movement between campuses of the same hospital as a qualifying direct transfer. The authority may accept auditable hospital records where other data are incomplete. The authority may not waive either threshold or substitute an earlier calendar year.

(d) For the 20 percent test in paragraph (c) of this subsection, the denominator is all acute inpatient discharges of Oregon residents at the principal inpatient campus during the calendar year and the numerator is the subset whose residence at admission was in a nonmetropolitan Oregon county other than the hospital's county. Count a discharge once. Use the geography in subsection (4) of this section. The hospital does not meet the test if the denominator is zero or the required data are unavailable.

(7) As used in subsection (6)(b) of this section, “specified hospital service” means one of the following services provided in person at the principal inpatient campus of the applicant:

(a) Emergency primary percutaneous coronary intervention for an adult with ST-elevation myocardial infarction, including the intervention and monitored inpatient care after the intervention.

(b) Hospital labor and delivery for a patient at or beyond 37 completed weeks of pregnancy who does not require subspecialty maternal or neonatal care at presentation, including emergency cesarean delivery when indicated and immediate maternal and newborn stabilization.

(c) Acute inpatient psychiatric treatment of an adult requiring admission for an acute psychiatric condition after medical stabilization, including overnight care in a licensed hospital or hospital unit authorized to provide the treatment.

(d) Emergency general surgery for adults who require inpatient hospital care for either uncomplicated acute appendicitis or uncomplicated acute cholecystitis. The operating program must be able to treat both conditions and must include the indicated operations, anesthesia and inpatient recovery.

(e) Adult intensive care for an acutely ill adult who requires both invasive mechanical ventilation and continuously infused vasoactive medication, including initiation or continuation of both forms of support and ongoing inpatient critical care. The reference patient does not require a tertiary specialty intervention.

(8)(a) The authority shall determine capability for a specified hospital service using the same clinical presentation, level of acuity and legally required admission authority, if applicable, for the applicant and for each potential receiving site. The authority may adopt uniform clinical and evidentiary specifications within the service categories in subsection (7) of this section. The authority may not add or remove a service category, require a particular proprietary technology or accept an applicant-specific patient description. A higher level of care counts if the potential receiving site can receive and provide the service for the same reference patient.

(b) A comparable receiving site is a lawfully operating hospital inpatient campus in Oregon or an adjoining state, other than the applicant's principal inpatient campus, that is authorized, staffed and equipped to receive and treat the applicable reference patient under a standing operating and acceptance schedule. The site must operate an emergency department that accepts patients 24 hours each day, except that a separately licensed inpatient psychiatric hospital or a hospital inpatient campus may qualify for the service in subsection (7)(c) of this section if it has an identified receiving entrance and is lawfully authorized and ordinarily staffed to receive appropriate direct transfers for that service. Evidence of outpatient care, stabilization for onward transfer, or diagnosis without definitive treatment does not establish comparable receiving capability. A site that operates under the same hospital license or shares the same owner or an affiliate may qualify if the site independently meets the requirements of this paragraph. Counting a site as a comparable receiving site does not authorize a separate designation for the site or allow the applicant to use another site's capabilities to meet its own service requirement.

(c) The authority shall review lawfully available and auditable evidence of service authority, standing coverage, staffing and actual operations. The authority shall apply the same evidentiary standards to the applicant and potential receiving sites and shall consider documented regional referral and emergency medical services practices. The lack of an answer or record from a plausible receiving site does not by itself establish that the site does not provide the service.

(9)(a) For each otherwise qualifying comparable receiving site, the authority shall measure ordinary motor vehicle travel time over the shortest normally available public-road route from the applicant’s emergency department entrance to the receiving site’s emergency department entrance or, for an inpatient psychiatric site described in subsection (8)(b) of this section, to the receiving entrance ordinarily used for the service. The authority shall account for routine seasonal road closures and disregard temporary closures from isolated events. The nearest comparable receiving site is the site with the least ordinary travel time determined under this paragraph.

(b) The applicant satisfies a requirement of at least 45 minutes of ordinary motor vehicle travel to a comparable receiving site if the authority finds that every comparable receiving site is at least 45 minutes away under paragraph (a) of this subsection or affirmatively verifies that there is no comparable receiving site in Oregon or an adjoining state. An absence finding must be supported by a search of relevant facility and service records and documented review of each plausible site that could affect the finding.

(10) The authority shall publish the method, applicable reference patients and evidence periods used to apply subsection (6)(b) of this section. An order under section 3 of this 2027 Act shall identify each service relied on, material comparable sites considered, applicable times and any evidence limits. The authority shall publish a summary of those findings, subject to applicable disclosure restrictions. The authority shall assess standing service operations for certification, annual review and review of a material change under section 3 of this 2027 Act. An isolated staffing gap, individual transfer denial or isolated disruption in travel does not by itself establish a material change in eligibility. A material change may include a verified enduring change in service scope or hours at the applicant or a comparable receiving site. This subsection does not extend a provisional continuation period under section 3 of this 2027 Act.

SECTION 2. (1) A hospital is designated a systemically important rural hospital if the hospital:

(a) Has a nonmetropolitan location and dual federal classification; or

(b) Meets the functional criteria in section 1 (6) of this 2027 Act.

(2) The authority shall specify in its order the paragraph of subsection (1) of this section under which the hospital qualifies. If a hospital qualifies under both paragraphs, the authority shall make both findings and issue a single certification. A hospital may request review under paragraph (b) if it does not meet, or ceases to meet, paragraph (a).

(3) The criteria in subsection (1) of this section are applied as of the date of application or initiation of a determination by the authority, whichever first applies, and on recertification or a determination arising from a material change under section 3 of this 2027 Act. The authority shall apply the data periods specified in section 1 (6) of this 2027 Act for the functional criteria. The authority may not designate a hospital on a general finding of similarity or hardship without findings on each applicable criterion.

SECTION 3. (1) The Oregon Health Authority shall establish a process to certify each hospital meeting the requirements of section 2 of this 2027 Act. The authority may initiate a determination using available records. A hospital may apply at any time and provide evidence for a determination, correction, recertification or reinstatement. The authority shall give the hospital a reasonable opportunity to supply relevant evidence and shall specify any unavailable record necessary for a determination.

(2) No later than 180 days after the effective date of this 2027 Act, the authority shall publish its first roster of hospitals certified under section 2 of this 2027 Act. The authority shall complete an application determination within 90 days after receipt of a complete application and shall review the roster at least annually. The authority shall promptly update the roster after a final order affecting a listing. The roster shall identify the hospital, principal inpatient campus, state license number, active Medicare certification number if any, class and qualification pathway, determination date, evidence measurement dates and any applicable provisional continuation period. The authority shall publish the rules and methods used in making determinations and an explanation of any limits in the evidence used for the roster. The authority shall disclose the roster and a summary of its findings consistent with state and federal laws governing disclosure of information. The public roster may not contain patient identifying information or other information whose disclosure is prohibited by law.

(3) The authority shall issue a written order certifying, recertifying, reinstating, changing or denying certification. Except as provided in subsection (7) of this section for a temporary interruption, the authority may certify a hospital only if it finds the hospital meets the applicable criteria on the effective date of certification. An applicant shall inform the authority of any material change during the pendency of an application. The order shall state the applicable criteria, findings for each criterion, the sources and measurement dates on which the findings depend and the effective date of the action. An incomplete or contradictory administrative record shall be identified in the findings. The absence of an entry in a public file may not be treated as conclusive evidence of ineligibility if reliable underlying records are available.

(4) Before denying an application or changing, suspending or terminating a certification adversely to a hospital, the authority shall give written notice of the proposed action, the basis and proposed effective date, and the opportunity to respond and request a contested case hearing within 30 days after service of the notice. A proceeding requested under this subsection is a contested case under ORS chapter 183. The authority shall state in the notice whether the hospital is eligible to apply under a different pathway. A final order is subject to judicial review under ORS 183.482. This subsection does not stay any licensure or safety action or authorize provision of services for which a license has ceased to be effective.

(5) A certified hospital shall notify the authority in writing of a material change that may affect a class criterion within 30 days after the hospital learns of the change. A material change includes a change to the operator, license, principal inpatient campus, active Medicare provider agreement or classification, inpatient bed schedule where a bed criterion applies, or the availability of services required for qualification. The authority shall review the certification after notice or on receipt of reliable evidence of a material change. A change in name or ownership does not itself disqualify a hospital. The authority shall reassess the eligible unit and criteria when a license, active federal provider agreement or location changes. The authority shall determine the effect of a consolidation or replacement campus under section 2 of this 2027 Act using the new operating and certification records. Certification may not be transferred by sale, assignment or use of a former Medicare certification number.

(6) A certified hospital that ceases all general acute inpatient operations on a permanent basis, or lacks an effective Oregon license authorizing the operations required for qualification, ceases to hold the designation when the operations permanently cease or the license ceases to be effective. The authority shall issue notice and afford review under subsection (4) of this section and correct the roster if the underlying fact or effective date was incorrect.

(7)(a) If a certified hospital continues lawful operation of its general acute inpatient and emergency services and there is a temporary interruption of a criterion other than nonmetropolitan location, the authority may enter a written order continuing the state designation for no more than 12 months after the effective date of the interruption, unless section 2 of this 2027 Act provides otherwise. A continuation order requires findings that the same principal inpatient campus continues to serve the access and referral function for which it qualified and that the hospital has supplied a documented plan and a reasonable schedule to restore the criterion or establish eligibility under another pathway. The authority may continue designation during a temporary interruption of inpatient or emergency services caused by a declared emergency if the license remains effective and the hospital has an approved reopening plan. The total continuation period for the same interruption may not exceed 12 months.

(b) A temporary interruption may include a correctable federal administrative lapse, a temporary reduction in licensed capacity where the bed count is a class criterion, or an interruption of a qualifying service. An intentional permanent service discontinuance, permanent conversion to a different Medicare payment system, or relocation that fails the applicable geography or campus criterion does not qualify for continuation. The authority shall record the basis and expiration date of the continuation and require reasonable periodic evidence of progress. The hospital may apply for reinstatement upon supplying evidence that it meets all criteria for the relevant pathway. A determination may correct the effective date if contemporaneous records establish that the condition did not lapse.

(c) An order under this subsection continues only the state designation. Payment eligibility, continued payment, settlement, reconciliation and recovery depend on the separate law and approvals governing each benefit. Designation may be reinstated prospectively on a new determination. A correction of the historical eligibility record does not independently authorize retroactive payments.

(8) If a federal rule is amended, replaced or repealed, the authority shall apply the facility's federal determinations and any applicable transition under this section. If the change removes a classification used by section 1 of this 2027 Act, substitutes a classification with materially different criteria or materially changes the Oregon class, the authority shall notify the interim committees of the Legislative Assembly related to health care and reimbursement in the manner provided by ORS 192.245 within 90 days after the authority identifies the change. The authority may not substitute a different eligibility criterion by rule. The authority shall recommend any statutory change necessary to continue the public purpose of the designation.

SECTION 4. (1) The systemically important rural hospital designation recognizes hospitals providing access to hospital care for their communities and receiving referrals from the region. For purposes of sections 1 to 4 of this 2027 Act, a decision on designation is based on the eligible hospital and the statutory criteria. A hospital's public, nonprofit or proprietary ownership, system affiliation, decision to contribute funds, or financial condition does not determine its eligibility. A hospital's trauma level does not determine eligibility except to the extent section 2 of this 2027 Act expressly provides otherwise. The authority may consider trauma designation as evidence of actual service capability where a functional criterion applies.

(2) The designation does not change a hospital's state license, federal Medicare classification or any Type A, Type B, Type C or rural critical access hospital classification. Sections 1 to 4 of this 2027 Act do not change payment or access protections under existing law, impose a hospital assessment or contribution, authorize a transfer of public funds, appropriate money or entitle a hospital to payment. This subsection does not preclude the application of a separate provision of law expressly authorizing a benefit, reimbursement or obligation for a certified hospital. Qualification for a benefit and treatment of payments for the same service shall be determined under the law and required approvals governing the benefit.

(3) The authority may adopt rules to administer sections 1 to 4 of this 2027 Act. Rules may specify documentation, application forms, evidence verification, review periods, address reconciliation, computation and reporting. Rules may not expand or narrow an eligibility criterion or waive a geographic, service, federal-classification or numeric requirement established by law. The authority shall use existing reports when sufficient and require only evidence reasonably necessary to make and review the determination. Disclosure, retention and use of submitted information remain subject to applicable state and federal law.

SECTION 5. Sections 1 to 4 of this 2027 Act are added to and made a part of ORS chapter 442.

SECTION 6. (1) This 2027 Act takes effect on the 91st day after the date on which the 2027 regular session of the Legislative Assembly adjourns sine die.

(2) Sections 1 to 5 of this 2027 Act do not become operative unless the school protection requirements in sections 7 to 11 and 13 of this 2027 Act are in force and the State Treasurer publishes and files the closing determination under section 9 of this 2027 Act. The closing, continuing protection, suspension and operative date are governed by section 13 of this 2027 Act.

SECTION 7. (1) As used in sections 7 to 14 of this 2027 Act:

(a) “Covered district” means the health district organized under ORS 440.305 to 440.410 that is the borrower or proposed borrower in the rural hospital stabilization financing undertaken or proposed under section 2, chapter 111, Oregon Laws 2026, for the general acute inpatient hospital owned and operated by the Bay Area Health District in Coos County. The designation under sections 1 to 5 of this 2027 Act applies statewide according to its own criteria.

(b) “Covered transaction” means an actual restriction, withholding, investment change, payment, receipt, release, recovery or other change in the amount or timing of school resources attributable to preparation for, issuance, administration, payment, substitution, repayment or termination of the guarantee under section 2, chapter 111, Oregon Laws 2026. An action affecting the covered district only, without an effect on school resources, is not a covered loss.

(c) “Protected school resources” means money or property of the Common School Fund, including the Unclaimed Property School Fund established within the Common School Fund under ORS 273.108, an amount that applicable law would otherwise direct to either fund, and a net distribution to a school district or education service district that depends on a transfer or distribution from either fund. The term includes the effects of a covered transaction on the timing of the applicable receipts and distributions.

(d) “School protection closing” means the consummation of the settlement and release or other resolution required by sections 8 to 11 of this 2027 Act, as evidenced by the State Treasurer's written determination under section 9 of this 2027 Act.

(e) “Authority” means the Oregon Health Authority.

(2) The Legislative Assembly finds that preservation of regional acute inpatient and emergency access and protection of school resources against the effects of the specified public hospital financing are connected purposes of this Act. The statewide designation supplies an objective public access basis for any hospital assistance under this Act. The cost of providing the assistance or any replacement credit support shall be borne by lawful hospital-side or separately authorized state resources and may not impair protected school resources.

SECTION 8. (1) The State Treasurer, in consultation with the Department of State Lands, the Department of Education and the Legislative Fiscal Officer, shall establish a baseline showing the amount and timing of protected school resources that would have existed without the covered transactions. Use the date immediately preceding the earliest actual covered effect as the starting date, including any earlier encumbrance or withholding that produced a loss. Use contemporaneous fund and claimant records, the applicable statutory transfer dates, documented fund investment and distribution policies, actual investment return evidence reasonably applicable to the omitted cash flows, and the school distribution rules that would otherwise have applied. Hold unrelated changes in investment conditions, liabilities, receipts, appropriations, enrollment and distribution formulas constant between the actual and comparison accounts. Identify uncertainty and separate realized amounts, reasonably determinable obligations and projected exposure. If there was no covered effect, document the records supporting that determination.

(2) The treasurer shall determine separately:

(a) The protected amount not received when otherwise due, including a covered guarantee payout only to the extent the money paid would otherwise lawfully have become protected school resources. Account for realized recoveries, lawful ordinary releases and amounts already restored for the same principal or receipt.

(b) The loss in protected investment assets resulting from the timing and amount of the affected receipts, withdrawals and returns, after accounting for paragraph (a) of this subsection, actual distributions, the investment treatment of prior restorations and associated investment earnings, and recoveries. Restore the asset position that would have remained after distributions under the baseline. Do not count a reduction in the same assets a second time as a distribution loss.

(c) The net reduction or delay in a district or education service district distribution, measured against the amount and timing under the baseline after applying the formula to actual and counterfactual receipts and taking account of amounts already replaced or that will be delivered in the ordinary distribution by the due date. If a baseline distribution was due before the closing, determine the unpaid amount separately for the affected district or education service district. A replacement of fund assets shall count against the downstream loss only to the extent it results in an actual additional timely distribution of those amounts. Identify any same-period resources that will otherwise be reduced by treatment of the restoration.

(3) Before the closing, the treasurer shall settle all certified amounts due through the closing from the protection account under section 11 of this 2027 Act. Amounts under subsection (2)(a) and (b) must be deposited in the fund or subaccount that would lawfully have held the resource, taking account of its character and the required disposition under ORS 98.389, 273.105 and 273.108. The treasurer shall transfer amounts under subsection (2)(c) to the Department of Education for a separately accounted additional distribution to each affected district and education service district. The department shall pay those amounts on the ordinary distribution schedule if timely, or promptly on receipt if the ordinary due date has passed. Notwithstanding ORS 327.011, 327.013 and 327.019, a restoration paid under this subsection is in addition to the amounts otherwise payable under ORS chapter 327, is not a local revenue offset, and may not be counted to reduce a distribution otherwise payable to the recipient or another district or education service district. The identified funds and the department may receive and use the amounts solely for the purposes of this section. In determining a baseline loss, the treasurer shall apply ORS 327.410 to ordinary Common School Fund distributions and shall attribute any effect on an education service district only to an applicable downstream distribution.

(4) Before the closing, the treasurer shall establish and reserve the amount reasonably necessary for future settlements of any documented timing loss, revisions to past amounts and unresolved covered costs, using an adverse but supportable estimate, and shall identify each obligation, expected due date and accounting method. If the treasurer cannot substantiate that the estimate covers each remaining item to be borne by the account from available liquid assets, the treasurer may not issue the closing determination. The account shall retain enough liquid money to make the required payments when due. A forecast of a later appropriation or release is not an available asset.

(5) For a future due date, complete restoration before or concurrently with the time the resource would have been received or distributed under the baseline. If a previously unrecognized or subsequently revised loss is certified, pay the deficiency within 30 days of certification, subject to available lawful funds, and determine any resulting time-value or distribution correction under subsection (2). Determine and apply any later recovery first to the same compensated injury and credit recovered state restoration funds back to the protection account only to the extent the credited amount is duplicative and only from receipts lawfully available for that purpose. Do not withdraw constitutionally dedicated funds or reduce an ordinary school distribution to recover an overpayment. Report remaining excess or deficiency and its lawful resolution.

(6) Until all covered effects have ended and all required restorations and lawful recoveries have been reconciled, the treasurer shall audit the comparison annually, review any material change within 30 days of learning of it, and publish an aggregate report stating the baseline, methodology, covered receipts and dates, estimates, actual resources restored, remaining exposure, and reserve sufficiency. The report must identify data limitations and omit confidential information. Provide the report to the State Land Board, the Legislative Fiscal Officer and the interim committees of the Legislative Assembly relating to education, health care and ways and means. On a deficiency, promptly notify those recipients and the Oregon Health Authority, record its amount and timing, identify any additional expenditure authority needed, and apply the suspension under section 13 of this 2027 Act. Issue a final public reconciliation within one year after all covered obligations have ended and all certified settlements have been made.

SECTION 9. (1) The treasurer may issue a written school protection closing determination only after:

(a) Documenting the status of any guarantee issued under chapter 111, Oregon Laws 2026, and every associated restriction, contractual obligation, default payment and recovery that could affect protected school resources.

(b) Completing the applicable arrangements in subsection (2) of this section and settling every amount then due under section 8 of this 2027 Act, with protection for any future items funded as required by section 8 (4) of this 2027 Act.

(c) Verifying lawful and effective financing and expenditure authority for the payments and account deposits on which the closing depends, and receipt of the required cash. The treasurer shall verify that the funded hospital-side and school-side transactions will leave no unresolved or unprovided-for reduction of protected school resources relative to the baseline.

(d) Obtaining written concurrence from the State Land Board for the school fund assets, from the Superintendent of Public Instruction for district and education service district distributions, and from the Director of the Oregon Health Authority for agency readiness to administer the statewide class and any separately funded assistance. The treasurer shall obtain written advice from the Attorney General on source, legal authority and the effectiveness of any release. The findings required by this section are determinations of fact and existing legal authority. An officer may not waive a requirement, assume away a contractual liability, or validate an otherwise unlawful transaction.

(2) The treasurer shall establish one of the following:

(a) The issuance period under chapter 111, Oregon Laws 2026, has ended without a guarantee in force. No restriction or liability affecting protected school resources remains. All attributable past effects have been settled or provided for under section 8 of this 2027 Act.

(b) Any existing guarantee has been discharged or validly released from payment or support by the Unclaimed Property and Estates Fund, the Common School Fund and the Unclaimed Property School Fund, through repayment or the written release of all affected rights holders, including as a condition of any approved substitution under section 10 of this 2027 Act. No school-side fund or ordinarily transferable receipt remains encumbered, directly or indirectly, for the loan or guarantee. All ordinary transfers and disbursements continue under otherwise applicable law and the separate restoration terms in section 8 of this 2027 Act. On and after the closing, the treasurer may not issue or renew a guarantee payable from the Unclaimed Property and Estates Fund under chapter 111, Oregon Laws 2026. This prohibition does not impair a right or obligation accrued before the closing.

(3) The treasurer shall document whether all nonclosing requirements have been satisfied before releasing any documents or money held for simultaneous closing. Any release, substitution and protection funded through the closing shall take effect at the same consummation. After verifying that the closing was completed, publish the determination, findings, pertinent dates, aggregate amounts, covered sources, approvals and the remaining funded reconciliation obligations. Deliver the determination to the Secretary of State, State Land Board, Director of the Oregon Health Authority, Superintendent of Public Instruction, Legislative Fiscal Officer and interim committees identified in section 8 of this 2027 Act. A confidential contract term may be described in an aggregate or redacted form if necessary to comply with law.

SECTION 10. (1) The Rural Hospital Replacement Guarantee Fund is established in the State Treasury, separate and distinct from the General Fund. Interest is credited to the fund. Money in the fund is continuously appropriated to the State Treasurer solely for obligations under a substitution that meets this section. The fund may receive money only by express appropriation or deposit authorization under law or from actual recoveries on a substituted guarantee.

(2) Notwithstanding section 2 (5), chapter 111, Oregon Laws 2026, the treasurer may substitute the Rural Hospital Replacement Guarantee Fund as the sole source of payment for a valid outstanding guarantee issued under that chapter only at the school protection closing and only if:

(a) The treasurer, covered district and holders of all affected lender and guarantee rights execute a written agreement authorizing the substitution and fully releasing the Unclaimed Property and Estates Fund, the Common School Fund and the Unclaimed Property School Fund from liability, reserve restrictions and recourse. All necessary documents and instructions must make the substitution and release concurrent and conditioned on the same closing.

(b) The replacement fund first receives sufficient unrestricted liquid funds to meet the maximum remaining amount payable under the guarantee, including an accrued or pending covered obligation. The maximum may not exceed the undischarged statutory limit. The reserve for school restorations is separate and may not be counted toward this requirement.

(c) The substitution does not increase the amount guaranteed, extend the maturity, change the authorized use of credit, impair collateral or recovery rights, create general state recourse, or pledge taxes or protected school resources. Review collateral and the exact borrower and creditor documents before approving the substitution.

(3) After a substitution takes effect, an obligation on the substituted guarantee may be paid only from the replacement fund. Apply any released restriction under otherwise applicable ORS 98.389 and 273.108. Release does not make the released amounts available for a hospital payment. Nothing in this section authorizes a new guarantee, restarts the issuance window under chapter 111, Oregon Laws 2026, or impairs an existing contractual right.

(4) The treasurer shall report remaining exposure, claims and recoveries annually. After final discharge, refund unobligated balances and net recoveries to the originating source of each deposit, with earnings traced or allocated by deposit share and the time held. If law prevents return to the original source, apply the lawful alternative expressly provided in the enactment authorizing the source, or hold the balance until the Legislative Assembly authorizes a disposition.

SECTION 11. (1) The School Resource Protection Account is established in the State Treasury, separate and distinct from the General Fund. Interest is credited to the account. Money in the account is continuously appropriated to the State Treasurer solely for settlement, incremental distribution and prefunded reserve under section 8 of this 2027 Act. Money may be paid only to the lawful destination in section 8 and within the cash available for that purpose. The account may not secure or fund a hospital grant or credit obligation.

(2) For the biennium beginning July 1, 2027, in addition to and not in lieu of any other appropriation, the following amounts are appropriated out of the General Fund:

(a) To the State Treasurer, [MISSING: SCHOOL RESOURCE PROTECTION APPROPRIATION] for deposit in the account established by subsection (1) of this section.

(b) To the State Treasurer, [MISSING: OPTIONAL MAXIMUM GUARANTEE SUBSTITUTION RESERVE], for deposit in the Rural Hospital Replacement Guarantee Fund established by section 10 of this 2027 Act. The treasurer shall deposit money under this paragraph only if the remaining conditions of section 10 (2) of this 2027 Act have been met or are enforceably conditioned to take effect at the same closing.

(c) To the State Treasurer, [MISSING: TREASURY ADMINISTRATION APPROPRIATION], to administer sections 7 to 11 and 13 of this 2027 Act.

(d) To the Department of Education, [MISSING: EDUCATION ADMINISTRATION APPROPRIATION], to administer school distributions and review under sections 8 and 9 of this 2027 Act. The department may expend certified amounts received under section 8 for the supplemental distributions, within the amount deposited for that purpose.

(e) To the Oregon Health Authority, [MISSING: OHA DESIGNATION AND GRANT ADMINISTRATION APPROPRIATION], to administer sections 1 to 5 and 12 of this 2027 Act.

(f) To the Oregon Health Authority, [MISSING: COVERED DISTRICT SERVICE STABILIZATION GRANT APPROPRIATION], for the one-time grant under section 12 of this 2027 Act.

(3) The treasurer may accept later appropriations expressly made for the separate purposes under subsections (1) and (2). An appropriation for one purpose does not supply funding for another. Before a closing, if the treasurer determines another appropriation is necessary for school protection, the treasurer shall report the shortfall and withhold the closing until cash is lawfully available. After the final reconciliation under section 8, return amounts no longer required in the protection account to each original source under the terms of the source authorization, retaining cash for verified unresolved obligations. Do not recover a restored school resource to fund the return.

SECTION 12. (1) Following the school protection closing, the Oregon Health Authority may make a one-time award to the covered district if the hospital owned and operated by the district is certified under section 3 of this 2027 Act or the corresponding single statewide certification recognized under section 14 of this 2027 Act. The authority shall issue a written finding that the district faces a material risk of reducing an identified emergency, acute inpatient or supporting regional access service, and that a funded plan will materially reduce the risk for at least 12 months. The district shall submit current audited and interim financial information, an access plan describing alternatives and expected service availability, the costs and amounts already payable for those costs, a cash forecast and evidence that the plan can be carried out.

(2) The award may not exceed the lesser of lawfully available funds and the reasonable and necessary verified net costs of the approved plan after amounts received or reasonably expected for the same costs. No award may pay preexisting debt service, capital expansion, distributions to owners or a cost otherwise funded. The award is for the district's public access obligations under a written agreement specifying services, performance, disbursement, a 90-day post-performance accounting, six years of records, and repayment of unused, unsupported and duplicate amounts. The authority shall recover amounts owed. The authority may permit equivalent service continuity on documented grounds without increasing the award.

(3) The award is state-only and may not be claimed for federal medical assistance participation, paid as a directed payment or treated as a promise of future appropriations. The authority may award and disburse only during the biennium beginning July 1, 2027, while the closing determination is in force. The authority's reporting and recovery duties and the district's contractual duties continue after that period. The authority may adopt rules necessary to implement this section.

SECTION 13. (1) Upon the effective date of this 2027 Act, the treasurer, the authority and the other agencies may perform preliminary verification, rulemaking and accounting, receive appropriated deposits for designated purposes and take the steps necessary to protect school resources and complete the closing. Before the operative date of sections 1 to 5 of this 2027 Act, the authority may receive applications and verify evidence. The authority may not issue a certification or approve or disburse a hospital award before the applicable operative date.

(2) Sections 1 to 5 and 12 of this 2027 Act become operative on the day after the State Treasurer publishes and files the school protection closing determination under section 9 of this 2027 Act. If the closing does not occur before July 1, 2029, the designation and new hospital-side authorities under this Act do not become operative unless later expressly authorized by law. Notwithstanding section 3 (2) of this 2027 Act, the authority shall publish the first roster no later than 180 days after sections 1 to 5 become operative. The 90-day period for determining an application runs from the later of the operative date of those sections or receipt of a complete application. A deadline applicable to a grant or transfer does not shorten the time to enforce or reconcile an authorized school restoration.

(3) If a court order or effective veto, repeal or funding loss makes a required protection inoperative or unavailable before the closing, the treasurer shall not issue the closing determination. If a material protection becomes unlawful or unavailable after the closing, or the treasurer determines a covered shortfall has arisen and cannot be paid from lawful sources when due, the treasurer shall publish and file notice and suspend the closing determination prospectively. On suspension the authority may not issue a new class certification or make or disburse a new hospital award under this Act. An existing certification issued under this Act is inactive for prospective eligibility during the suspension. The treasurer may lift the suspension only on a new closing determination verifying lawful cure, restoration and adequate funds. Promptly provide affected hospitals notice and the applicable administrative review under section 3 of this 2027 Act. The suspension does not invalidate an earned payment, an existing lawful contractual obligation, or an authority or duty to restore school resources, audit, collect repayments or reconcile accounts. The treasurer shall carry any unpaid certified deficiency forward, notify the Legislative Assembly of the amount and source needed, and pay it when lawful funds become available. Suspension does not satisfy or discharge the deficiency.

(4) Notwithstanding any provision of this Act making certification independent of a payment or financing provision, the sole statewide designation enacted by this Act, a guarantee substitution under section 10, and an award under section 12 are subject to the closing and applicable suspension requirements in this section. For purposes of ORS 174.040, the Legislative Assembly intends the statewide designation under this Act and its new hospital-side authority to be essentially and inseparably connected with the operative school protection requirements in sections 7 to 11 and 13 of this 2027 Act. If a final judgment holds an indispensable protection invalid and the remaining provisions cannot lawfully provide equivalent protection under the express terms of this Act, the designation and new hospital-side authority under this Act are inoperative. The duties to preserve, restore and reconcile school resources and honor accrued lawful obligations continue to the extent lawfully executable. This subsection applies to the statutory bargain in this Act and does not alter constitutional veto authority or the power of a later Legislative Assembly to enact a law.

SECTION 14. (1) If another 2027 Act enacts the same statewide designation with the same operative eligibility and review standards, the authority shall administer a single roster, certification, order and review process for the designation. On the operative date under section 13, a valid certification under the other Act may serve as proof for eligibility under this Act. No recognition under this Act and no award or other new hospital-side authority under this Act is available before the closing merely because another law independently recognizes the hospital.

(2) This Act does not delay, amend or limit a separately enacted and independently operative designation unless the other Act expressly incorporates the condition under section 13 of this 2027 Act. This section supplies no authority to reconcile materially different eligibility standards by rule.

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