H.C.R. 9

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RESOLUTION SUPPORTING INCREASE OF
2 PRIVATE ACTIVITY BONDING CAP
3 1997 GENERAL SESSION
4 STATE OF UTAH
5 Sponsor: J. Brent Haymond
6 A CONCURRENT RESOLUTION OF THE LEGISLATURE AND THE GOVERNOR
7 EXPRESSING SUPPORT FOR INCREASING THE AMOUNT OF PRIVATE ACTIVITY
8 BOND CAP ALLOCATED TO UTAH BY THE UNITED STATES CONGRESS.
9 Be it resolved by the Legislature of the state of Utah, the Governor concurring therein:
10 WHEREAS the policy of the state of Utah is to assure the health, safety, and welfare of its
11 citizens;
12 WHEREAS an adequate supply of tax-exempt private activity bond volume cap is essential
13 to financing those facilities and programs that contribute to the well being of the citizens of the
14 state;
15 WHEREAS the United States Congress included in the Tax Reform Act of 1986, the most
16 stringent restriction ever placed on tax-exempt private activity municipal bonds, effective January
17 1, 1988, which imposed a limit, based on each states' population, to not exceed the greater of $50
18 per capita or $150,000,000 per calendar year;
19 WHEREAS because of the relatively small population of Utah, the amount of tax-exempt
20 private activity bonding has been limited to $150,000,000 each calendar year, which is considered
21 inadequate to meet the tax-exempt private activity financing demands of the state of Utah, its
22 agencies, and political subdivisions;
23 WHEREAS since 1987, the effects of annual inflation have diluted the purchasing power
24 of Utah's tax-exempt private activity bonding cap by 44.6%, reducing the real purchasing value
25 of Utah's share of this bonding from $150,000,000 in 1987 to $83,100,000 in 1996;
26 WHEREAS losing $66,900,000 in the real value of tax-exempt private activity financed
27 projects and programs reveals how insidious a volume cap that is not indexed to inflation and only

1 tied to population can be;
2 WHEREAS this loss or real value to Utah has significantly reduced the number of
3 single-family housing construction starts that would have been available and affordable to the
4 ever-increasing lower-income first-time homebuyers of Utah and, thus, has caused many of these
5 families to remain in substandard housing and has further unnecessarily restricted employment in
6 the residential real estate construction industries of the state, among other negative impacts;
7 WHEREAS this loss of real value to Utah has significantly reduced the number of
8 multifamily housing construction starts that would have been available and affordable to the
9 ever-increasing lower-income renters of Utah and, thus, has caused these families to remain in
10 substandard housing and further unnecessarily restricted employment in the residential real estate
11 construction industries of the state, among other negative impacts;
12 WHEREAS this loss or real value to Utah has significantly reduced the number of student
13 loans that would have been available and affordable to the ever-increasing higher education
14 students of this state who are in need of assistance in financing their education costs, among other
15 negative impacts;
16 WHEREAS this loss of real value to Utah has significantly reduced the number of small
17 manufacturing project construction starts that would have been available and affordable to the
18 ever-increasing manufacturing facility demands of Utah and, thus, has caused these entities to
19 defer expansion or possibly to fail because of inadequate access to affordable capital and has
20 further caused unemployment and underemployment in the commercial real estate construction
21 industries of the state, among other negative impacts;
22 WHEREAS this loss of real value to Utah has significantly reduced the number of exempt
23 facility project construction starts that would have been available and affordable to the
24 ever-increasing pollution control facility demands of Utah and, thus, has caused these entities to
25 defer expansion or possibly to fail to meet environmental guidelines imposed by regulatory bodies
26 because of inadequate access to affordable capital and has further caused unemployment and
27 underemployment in the commercial real estate construction industries of the state, among other
28 negative impacts; and
29 WHEREAS if the state, its agencies, and political subdivisions continue to be unable to
30 provide adequate levels of tax-exempt private activity financing for these purposes, among others,
31 it would substantially affect the health, safety, and welfare of the citizens of the state of Utah:

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1 NOW, THEREFORE, BE IT RESOLVED that the Legislature of the state of Utah, the
2 governor concurring therein, fully supports the United States Congress immediately increasing the
3 tax-exempt private activity volume cap available to each state subject to the minimum limits,
4 including the state of Utah, to levels that would fully restore each states', including the state of
5 Utah's, tax-exempt private activity bond volume cap's purchasing power to offset the dilutive
6 affects of inflation since 1987, and to then index the cap to inflation in future years.
7 BE IT FURTHER RESOLVED that copies of this resolution be sent to the leadership of
8 the majority and minority parties of the United States Congress, the President of the United States,
9 and to the members of Utah's congressional delegation.




Legislative Review Note
as of 2-12-97 1:15 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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