H.B. 407 Enrolled

FINANCIAL ASSISTANCE FOR BUSINESS
RELOCATION IN RURAL COMMUNITIES
2000 GENERAL SESSION
STATE OF UTAH
Sponsor: Michael R. Styler
Jordan Tanner
Margaret Dayton
Matt Throckmorton
Raymond W. Short

AN ACT RELATING TO COMMUNITY AND ECONOMIC DEVELOPMENT; DEFINING
TERMS; PROVIDING FOR FINANCIAL ASSISTANCE FROM THE INDUSTRIAL
ASSISTANCE FUND TO A COMPANY CREATING AN ECONOMIC IMPEDIMENT; AND
MAKING TECHNICAL CHANGES.
This act affects sections of Utah Code Annotated 1953 as follows:
AMENDS:
9-2-1202, as last amended by Chapter 193, Laws of Utah 1994
9-2-1204, as renumbered and amended by Chapters 145 and 241, Laws of Utah 1992
9-2-1205, as last amended by Chapter 335, Laws of Utah 1997
9-2-1207, as last amended by Chapter 335, Laws of Utah 1997
ENACTS:
9-2-1205.5, Utah Code Annotated 1953
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 9-2-1202 is amended to read:
9-2-1202. Definitions.
As used in this part:
(1) "Administrator" means the Department of Community and Economic Development.
(2) "Board" means the Board of Business and Economic Development.
(3) "Company creating an economic impediment" means a company that discourages
economic development within a reasonable radius of its location because of:
(a) odors;
(b) noise;

(c) pollution;
(d) health hazards; or
(e) other activities similar to those described in Subsections (3)(a) through (d).
[(3)] (4) "Economically disadvantaged rural area" means a geographic area designated by the
board under Section 9-2-1207 .
[(4)] (5) "Fund" means the restricted account known as the Industrial Assistance Fund
created in Section 9-2-1203 .
(6) "Replacement company" means a company locating its business or part of its business in
a location vacated by a company creating an economic impediment.
[(5)] (7) "Targeted industry" means an industry or group of industries targeted by the board,
under Section 9-2-1207 , for economic development in the state.
Section 2. Section 9-2-1204 is amended to read:
9-2-1204. Loans and assistance -- Repayment -- Credits.
(1) (a) [Any qualifying] A company that qualifies under Section 9-2-1205 may receive loans
or other financial assistance from the fund for expenses related to establishment, relocation, or
development of industry in Utah.
(b) A company creating an economic impediment that qualifies under Section 9-2-1205.5 may
in accordance with this part receive loans or other financial assistance from the fund for the expenses
of the company creating an economic impediment related to:
(i) relocation to a rural area in Utah of the company creating an economic impediment; and
(ii) the siting of a replacement company.
(2) [The] (a) Subject to Subsection (2)(b), the administrator shall have the authority to
determine the structure, amount, and nature of any loan or other financial assistance from the fund.
[Each such]
(b) The form of financial assistance determined under Subsection (2)(a) shall be structured
so the intended repayment or return to the state [of Utah], including cash or credit, equals at least the
amount of the assistance together with an annual interest rate of 10%.
(3) (a) (i) [The] Except as provided in Subsection (3)(b), the administrator may provide for

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a system of credits that may be used in lieu of cash repayment of a fund loan.
(ii) The value of [these] the credits described in Subsection (3)(a)(i) shall be based on factors
determined by the administrator, including:
(A) the number of Utah jobs created[,];
(B) the increased economic activity in Utah[,]; and
(C) other events and activities that occur as a result of the fund loan.
(b) (i) The administrator shall provide for a system of credits to be used in lieu of cash
repayment of a fund loan that is issued to a company creating an economic impediment.
(ii) The value of the credits described in Subsection (3)(b)(i) shall be based on factors
determined by the administrator, including:
(A) the number of Utah jobs created;
(B) the increased economic activity in Utah; and
(C) other events and activities that occur as a result of the fund loan.
(4) (a) If loan repayments are in cash, [they] the repayments shall be deposited, including any
interest, into the fund.
(b) If the repayments are in the form of credits as provided in Subsection (3), the
administrator and the Division of Finance shall determine the manner of recognizing and accounting
for the credits.
(5) At the end of each fiscal year, after the transfer of surplus General Fund revenues has
been made to the Budget Reserve Account as provided in Section 63-38-2.5 , any additional
unrestricted, undesignated General Fund balance, except the first $10,000,000 of additional
unrestricted, undesignated General Fund balance on June 30, 1992, shall be earmarked to the
Industrial Assistance Fund in an amount equal to any credit that has accrued under this part. These
credit amounts may not be used for purposes of the fund as provided in this part until appropriated
by the Legislature.
Section 3. Section 9-2-1205 is amended to read:
9-2-1205. Qualification for assistance.
(1) [The] Except as provided in Section 9-2-1205.5 , the administrator shall determine which

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industries, companies, and individuals qualify to receive monies from the fund. Except as provided
by Subsection (2), to qualify for financial assistance from the fund, an applicant shall:
(a) demonstrate to the satisfaction of the administrator that the applicant will expend funds
in Utah with vendors and subcontractors or other businesses in an amount proportional with monies
provided from the fund at a minimum ratio of 5.7 to 1 per year for a minimum period of five years
beginning with the date the loan was approved;
(b) demonstrate to the satisfaction of the administrator that the applicant will expend at least
$10,000,000 annually in Utah over the base level of an applicant's prior year's expenditures in the
state;
(c) demonstrate to the satisfaction of the administrator the applicant's ability to sustain
economic activity in the state sufficient to repay, by means of cash or appropriate credits, the
assistance provided by the fund; and
(d) satisfy other criteria the administrator considers appropriate.
(2) (a) The administrator may exempt an applicant from either the requirements of Subsection
(1)(a) or (1)(b), or both, if:
(i) the financial assistance is provided to an applicant for the purpose of locating all or any
portion of its operations to an economically disadvantaged rural area;
(ii) the applicant is solely owned by or is a cooperative consisting solely of persons who
reside in an economically disadvantaged rural area; or
(iii) the applicant is part of a targeted industry.
(b) The administrator may not exempt the applicant from the requirement under Subsection
9-2-1204 (2) that the loan or financial assistance be structured so that the repayment or return to the
state equals at least the amount of the assistance together with an annual interest rate of 10%.
(3) The administrator shall:
(a) for applicants not described in Subsection (2)(a)(ii):
(i) make findings as to whether or not each applicant has satisfied each of the conditions set
forth in Subsection (1); and
(ii) monitor the continued compliance by each applicant with each of the conditions set forth

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in Subsection (1);
(b) for applicants described in Subsection (2)(a)(ii) who are cooperatives, make findings as
to whether the economic activities of each applicant has resulted in a reduction in the federal poverty
rate in the economically disadvantaged rural area in which the applicant is located;
(c) for applicants described in Subsection (2)(a)(ii) who are not cooperatives, make findings
as to whether the economic activities of each applicant has resulted in the creation of new jobs on a
per capita basis, instead of a set standard, in the economically disadvantaged rural area in which the
applicant is located;
(d) monitor the compliance by each applicant with the provisions of any contract or
agreement entered into between the applicant and the state as provided in Section 9-2-1206 ; and
(e) make funding decisions based upon appropriate findings and compliance.
Section 4. Section 9-2-1205.5 is enacted to read:
9-2-1205.5. Financial assistance to companies that create economic impediments.
(1) (a) The administrator may provide monies from the fund to a company creating an
economic impediment if that company:
(i) applies to the administrator;
(ii) relocates to a rural area in Utah; and
(iii) meets the qualifications of Subsection (1)(b).
(b) Except as provided by Subsection (2), to qualify for financial assistance from the fund,
a company creating an economic impediment shall:
(i) demonstrate to the satisfaction of the administrator that the company creating an economic
impediment, its replacement company, or in the aggregate the company creating the economic
impediment and its replacement company:
(A) will expend funds in Utah with vendors and subcontractors or other businesses in an
amount proportional with monies provided from the fund at a minimum ratio of 5.7 to 1 per year for
a minimum period of five years beginning with the date the loan was approved;
(B) will expend at least $10,000,000 annually in Utah over the base level of the company
creating the economic impediment's prior year's expenditures in the state; and

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(C) can sustain economic activity in the state sufficient to repay, by means of cash or
appropriate credits, the assistance provided by the fund; and
(ii) satisfy other criteria the administrator considers appropriate.
(2) (a) The administrator may exempt a company creating an economic impediment from the
requirements of Subsection (1)(b)(i)(A) or (1)(b)(i)(B), or both, if:
(i) the financial assistance is provided to a company creating an economic impediment for the
purpose of locating all or any portion of its operations to an economically disadvantaged rural area;
or
(ii) its replacement company is part of a targeted industry.
(b) The administrator may not exempt a company creating an economic impediment from the
requirement under Subsection 9-2-1204 (2) that the loan or financial assistance be structured so that
the repayment or return to the state equals at least the amount of the assistance together with an
annual interest rate of 10%.
(3) The administrator shall:
(a) make findings as to whether or not a company creating an economic impediment, its
replacement company, or both, have satisfied each of the conditions set forth in Subsection (1);
(b) monitor the compliance by a company creating an economic impediment, its replacement
company, or both, with:
(i) each of the conditions set forth in Subsection (1); and
(ii) any contract or agreement under Section 9-2-1206 entered into between:
(A) the company creating an economic impediment; and
(B) the state; and
(c) make funding decisions based upon appropriate findings and compliance.
Section 5. Section 9-2-1207 is amended to read:
9-2-1207. Designation of economically disadvantaged rural areas and targeted
industries.
(1) For purposes of this part, the board shall determine annually which industries or groups
of industries shall be targeted industries as defined in [Subsection] Section 9-2-1202 [(5)].

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(2) In designating an economically disadvantaged rural area:
(a) the board shall consider the average agricultural and nonagricultural wage, personal
income, unemployment, and employment in the area; and
(b) the board may use an econometric cost-benefit model or models adopted by the
Governor's Office of Planning and Budget.

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