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H.B. 372






Sponsor: Evan L. Olsen

6a     UP TO h 50%
8a    FUND
] h
11    This act affects sections of Utah Code Annotated 1953 as follows:
12    AMENDS:
13         9-2-1203, as renumbered and amended by Chapter 241, Laws of Utah 1992
14         9-2-1205, as last amended by Chapter 193, Laws of Utah 1994
15         9-2-1207, as enacted by Chapter 193, Laws of Utah 1994
16     h [ ENACTS:
17        9-2-1209, Utah Code Annotated 1953
] h

18    Be it enacted by the Legislature of the state of Utah:
19        Section 1. Section 9-2-1203 is amended to read:
20         9-2-1203. Industrial Assistance Fund created.
21        There is created within the General Fund a restricted account known as the Industrial
22    Assistance Fund of which h [at least ] UP TO h 50% shall be used in economically disadvantaged
22a    rural areas.
23    The fund shall be administered by the administrator under the direction of the board h [ , except that
24    the portion of the fund used in economically disadvantaged rural areas shall be administered under
25    the direction of the Rural Resettlement Board created in Section 9-2-1209
] h
. Interest accrued from
26    investment of monies in the fund shall remain in the fund. Up to $375,000 from the fund shall be
27    deposited in the Utah Capital Access Fund. The administrator may hire appropriate support staff.
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1    The cost of administering the fund shall be paid from monies in the fund.
2        Section 2. Section 9-2-1205 is amended to read:
3         9-2-1205. Qualification for assistance.
4        (1) The administrator shall determine which industries, companies, and individuals qualify
5    to receive monies from the fund. Except as provided by Subsection (2), to qualify for financial
6    assistance from the fund, an applicant shall:
7        (a) demonstrate to the satisfaction of the administrator that the applicant will expend funds
8    in Utah with vendors and subcontractors or other businesses in an amount proportional with
9    monies provided from the fund at a minimum ratio of 5.7 to 1 per year for a minimum period of
10    five years beginning with the date the loan was approved;
11        (b) demonstrate to the satisfaction of the administrator that the applicant will expend at
12    least $10,000,000 annually in Utah over the base level of an applicant's prior year's expenditures
13    in the state;
14        (c) demonstrate to the satisfaction of the administrator the applicant's ability to sustain
15    economic activity in the state sufficient to repay, by means of cash or appropriate credits, the
16    assistance provided by the fund; and
17        (d) satisfy other criteria the administrator considers appropriate.
18        (2) (a) The administrator may exempt an applicant from either the requirements of
19    Subsection (1)(a) or (1)(b), or both if:
20        (i) the financial assistance is provided to an applicant for the purpose of locating all or any
21    portion of its operations to an economically disadvantaged rural area; [or]
22        (ii) the applicant is solely owned by or is a cooperative consisting solely of persons who
23    reside in an economically disadvantaged rural area; or
24        [(ii)] (iii) the applicant is part of a targeted industry.
25        (b) The administrator may not exempt the applicant from the requirement under
26    Subsection 9-2-1204(2) that the loan or financial assistance be structured so that the repayment or
27    return to the state equals at least the amount of the assistance together with an annual interest rate
28    of 10%.
29        (3) The administrator shall:
30        (a) for applicants not described in Subsection (2)(a)(ii):
31        [(a)] (i) make findings as to whether or not each applicant has satisfied each of the

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1    conditions set forth in Subsection (1); and
2        [(b)] (ii) monitor the continued compliance by each applicant with each of the conditions
3    set forth in Subsection (1);
4        (b) for applicants described in Subsection (2)(a)(ii) who are cooperatives, make findings
5    as to whether the economic activities of each applicant has resulted in a reduction in the federal
6    poverty rate in the economically disadvantaged rural area in which the applicant is located;
7        (c) for applicants described in Subsection (2)(a)(ii) who are not cooperatives, make
8    findings as to whether the economic activities of each applicant has resulted in the creation of new
9    jobs on a per capita basis, instead of a set standard, in the economically disadvantaged rural area
10    in which the applicant is located;
11        [(c)] (d) monitor the compliance by each applicant with the provisions of any contract or
12    agreement entered into between the applicant and the state as provided in Section 9-2-1206; and
13        [(d)] (e) make funding decisions based upon appropriate findings and compliance.
14        Section 3. Section 9-2-1207 is amended to read:
15         9-2-1207. Designation of economically disadvantaged rural area targeted industries.
16        (1) For purposes of this part, the board shall determine annually which industries or groups
17    of industries shall be targeted industries as defined in Subsection 9-2-1202(5).
18        (2) In designating an economically disadvantaged rural area:
19        (a) the h [ [ ] board [ ] ] [ Rural Resettlement Board ] h shall consider the average agricultural
19a    and
20    nonagricultural wage, personal income, unemployment, and employment in the area; and
21        (b) the h [ [ ] board [ ] ] [ Rural Resettlement Board ] h may use an econometric cost-benefit
21a    model or
22    models adopted by the Governor's Office of Planning and Budget.
23         h [ Section 4. Section 9-2-1209 is enacted to read:
24        9-2-1209. Creation and duties of Rural Resettlement Board.
25        (1) (a) There is created within the department the Rural Resettlement Board consisting of
26    five members appointed by the governor to four-year terms.
27        (b) Notwithstanding Subsection (1)(a), the governor shall, at the time of the appointment
28    or reappointment, adjust the length of terms to ensure that the terms of board members are
29    staggered so that approximately half of the board is appointed every two years.
30        (c) The members may not service more than two full consecutive terms unless the
31    governor determines that an additional term is in the best interest of the state.
] h

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1         h [ (2) The members shall be employed in agriculture or other forms of private enterprise and
2    reside in an economically disadvantaged rural area with at least one member employed by a
3    financial institution.
4        (3) When a vacancy occurs in the membership for any reason, the replacement shall be for
5    the unexpired term.
6        (4) Three members of the board constitute a quorum for conducting board business and
7    exercising board power.
8        (5) The governor shall select one of the board members as its chair.
9        (6) (a) Members shall receive no compensation or benefits for their service, but may
10    receive per diem and expense incurred in the performance of the member's official duties at rates
11    established by the Division of Finance under Section 63A-3-106 and 63A-3-107.
12        (b) Members may decline to receive per diem and expenses for their service.
13        (7) The board shall provide direction to the administrator on the use of the fund in
14    economically disadvantaged rural areas.
] h

15        Section h [5 ] 4 h . Effective date.
16        This act takes effect on July 1, 1997.

Legislative Review Note
    as of 2-4-97 3:34 PM

A limited legal review of this bill raises no obvious constitutional or statutory concerns.

Office of Legislative Research and General Counsel

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