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2007 Oregon Attorney General Reports and Opinions 1 (2007)

handle is hein.sag/sagor0038 and id is 1 raw text is: HARDY MYERS PETER D. SHEPHERD Attorney Generalt Deputy Attorney General DEPARTMENT OF JUSTICE GENERAL COUNSEL DIVISION March 19, 2007 Terri Sahli, Risk Manager Department of Administrative Services 1225 Ferry Street, SE, U150 Salem, OR 97301-4287 Re: Opinion Request OP-2007-1 Dear Ms. Sahli: You have asked for advice about the authority of the Department of Administrative Services (DAS) over the payment of restoration costs for a damaged building owned by the State Board of Higher Education (Board). We understand that your inquiry arises from a situation where the Board (acting through the University of Oregon) initially submitted a property damage claim to the Insurance Fund and then attempted to withdraw that claim, asserting that it had discretion to decide whether to submit such a claim and to pay the costs of restoration out of its own funds. Below we set forth your specific question and our short answer, followed by supporting discussion. Questions and Short Answers 1. If a Board-owned building suffers damages from a DAS-covered peril, may DAS require the Board to submit a claim to DAS for the payment of the restoration costs by the Insurance Fund? Yes, unless: (1) the amount of damages is less than the deductible established by DAS; or (2) the Board built the damaged building under ORS 351.160 (self-liquidating and self- supporting buildings), there are outstanding construction financing bonds, and the Board has obtained insurance under ORS 351.180 (separate from the Insurance Fund) that covers the loss. 2. Does the Board's authority to obtain its own insurance on bond financed buildings under ORS 351.180 end when the bonds are paid off? Yes. ORS 351.180 allows the Board to obtain insurance on certain bond-financed buildings in such sums as will protect the holders of the outstanding bonds. Because the authority to obtain insurance is tied to the value of outstanding bonds, that authority ends when there are no longer any outstanding bonds. 1162 Court Street NE, Salem, OR 97301-4096 Telephone: (503) 947-4540 Fax: (503) 378-3784 TTY: (503) 378-5938

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