Section 1.

(1) In the manner provided by law and notwithstanding the limitations contained in section 7, Article XI of this Constitution, the credit of the State of Oregon may be loaned and indebtedness incurred, in an aggregate outstanding principal amount not to exceed, at any one time, one-half of one percent of the real market value of all property in the state, to provide funds to finance capital costs of Oregon Health and Science University. Bonds issued under this section may not be paid from ad valorem property taxes.
(2) Any indebtedness incurred under this section shall be in the form of general obligation bonds of the State of Oregon containing a direct promise on behalf of the State of Oregon to pay the principal, premium, if any, and interest on such bonds, in an aggregate outstanding principal amount not to exceed the amount authorized in subsection (1) of this section. The bonds shall be the direct obligation of the State of Oregon and shall be in such form, run for such period of time, have such terms and bear such rates of interest as may be provided by statute. The full faith and credit and taxing power of the State of Oregon shall be pledged to the payment of the principal, premium, if any, and interest on such bonds provided, however, that the ad valorem taxing power of the State of Oregon may not be pledged to the payment of such bonds.
(3) The proceeds from bonds issued under this section shall be used to finance capital costs of Oregon Health and Science University and costs of issuing bonds pursuant to this Article. Bonds issued under this section to finance capital costs of Oregon Health and Science University shall be issued in an aggregate principal amount that produces net proceeds for the university in an amount that does not exceed $200 million.
(4) The proceeds from bonds issued under this section may not be used to finance operating costs of Oregon Health and Science University.
(5) As used in this Article, “bonds” means bonds, notes or other financial obligations of the State of Oregon issued under this section.