Governor Kulongoski signed House Bill 3484 on July 28, 2009. This regulation will go into effect on January 1, 2010.

House Bill 3484 uses model statutory language that has been adopted in a substantially similar form in other states in an effort to protect those who entrust funds with Qualified Intermediaries.

 Key points to this new law require Qualified Intermediaries to:

•  Notify exchangers of change in company’s ownership/control
•  Maintain fidelity bond of $1mm or deposit funds into qualified escrow account
•  Maintain errors and omission coverage of $250,000
•  Invest funds in a manner that meets the prudent investor standard
•  Satisfy the investment goals of liquidity and preservation of principal
•  Prohibits commingling exchange proceeds with operating accounts
•  Prohibits exchange company from loaning funds to any related entities*

*There is an exception to this rule that will be used when working with construction and/or reverse exchanges. Exchange proceeds may be loaned to the exchange accommodation titleholder in accordance with a qualified exchange accommodation agreement.