S.B. 253

1

2001 SPECIAL HIGHWAY GENERAL
2 OBLIGATION BONDS
3 2001 GENERAL SESSION
4 STATE OF UTAH
5 Sponsor: L. Steven Poulton
6 This act authorizes issuance of state of Utah general obligation bonds and bond anticipation
7 notes by the State Bonding Commission to accelerate funding and construction of certain
8 highways and related facilities in Salt Lake County. This act defines the process and
9 requirements for issuing the bonds and notes and specifies the use of the proceeds. This act
10 imposes a statewide property tax and abates it. This act creates a sinking fund to pay debt
11 service on the bonds. This act provides for related matters and makes technical corrections.
12 This act affects sections of Utah Code Annotated 1953 as follows:
13 AMENDS:
14 63-38c-402, as last amended by Chapter 354, Laws of Utah 2000
15 ENACTS:
16 63B-10-301, Utah Code Annotated 1953
17 63B-10-302, Utah Code Annotated 1953
18 63B-10-303, Utah Code Annotated 1953
19 63B-10-304, Utah Code Annotated 1953
20 63B-10-305, Utah Code Annotated 1953
21 63B-10-306, Utah Code Annotated 1953
22 63B-10-307, Utah Code Annotated 1953
23 63B-10-308, Utah Code Annotated 1953
24 63B-10-309, Utah Code Annotated 1953
25 63B-10-310, Utah Code Annotated 1953
26 63B-10-311, Utah Code Annotated 1953
27 63B-10-312, Utah Code Annotated 1953

28 63B-10-313, Utah Code Annotated 1953
29 63B-10-314, Utah Code Annotated 1953
30 63B-10-315, Utah Code Annotated 1953
31 63B-10-316, Utah Code Annotated 1953
32 63B-10-317, Utah Code Annotated 1953
33 63B-10-401, Utah Code Annotated 1953
34 63B-10-402, Utah Code Annotated 1953
35 63B-10-403, Utah Code Annotated 1953
36 63B-10-404, Utah Code Annotated 1953
37 Be it enacted by the Legislature of the state of Utah:
38 Section 1. Section 63-38c-402 is amended to read:
39 63-38c-402. Debt limitation -- Vote requirement needed to exceed limitation --
40 Exceptions.
41 (1) (a) Except as provided in Subsection (1)(b), the outstanding general obligation debt
42 of the state may not exceed 20% of the maximum allowable appropriations limit unless approved
43 by more than a two-thirds vote of both houses of the Legislature.
44 (b) Notwithstanding the limitation contained in Subsection (1)(a), debt issued under the
45 authority of the following parts is not subject to the debt limitation established by this section:
46 (i) Title 63B, Chapter 6, Part 2, 1997 Highway General Obligation Bond Authorization[,];
47 (ii) Title 63B, Chapter 6, Part 3, 1997 Highway Bond Anticipation Note Authorization[,];
48 (iii) Title 63B, Chapter 7, Part 2, 1998 Highway General Obligation Bond
49 Authorization[,];
50 (iv) Title 63B, Chapter 7, Part 3, 1998 Highway Bond Anticipation Note Authorization[,];
51 (v) Title 63B, Chapter 8, Part 2, 1999 Highway General Obligation Bond Authorization[,];
52 (vi) Title 63B, Chapter 8, Part 3, 1999 Highway Bond Anticipation Note Authorization[,];
53 (vii) Title 63B, Chapter 9, Part 2, 2000 Highway General Obligation Bond[, is not subject
54 to the debt limitation established by this section.];
55 (viii) Title 63B, Chapter 10, Part 3, 2001 Highway General Obligation Bond for Salt Lake
56 County; and
57 (ix) Title 63B, Chapter 10, Part 4, 2001 Highway Bond Anticipation Note for Salt Lake
58 County Authorization.

59 (2) This section does not apply if contractual rights will be impaired.
60 Section 2. Section 63B-10-301 is enacted to read:
61 Part 3. 2001 Highway General Obligation Bond for Salt Lake County
62 63B-10-301. State Bonding Commission authorized to issue general obligation bonds.
63 Upon receipt of a formal opinion from the Utah Attorney General that Salt Lake County
64 has entered a binding legal agreement with the state in which Salt Lake County agrees, for a
65 minimum of ten years, to annually transfer the 1/4 of 1/4% of sales tax proceeds earmarked by
66 Section 59-12-502 to the sinking fund created in Section 63B-10-308 , the commission created
67 under Section 63B-1-201 may issue and sell general obligation bonds of the state pledging the full
68 faith, credit, and resources of the state for the payment of the principal of and interest on the bonds,
69 to provide funds to the Department of Transportation.
70 Section 3. Section 63B-10-302 is enacted to read:
71 63B-10-302. Maximum amount -- Projects authorized.
72 (1) The total amount of bonds issued under this part may not exceed $110,000,000.
73 (2) (a) Proceeds from the issuance of bonds shall be provided to the Department of
74 Transportation to:
75 (i) pay the interest and issuance costs of the $26,000,000 in bonds issued under Section
76 63B-8-503 ; and
77 (ii) provide funds to pay all or part of the costs of accelerating the state highway
78 construction or reconstruction projects in Salt Lake County listed on the Statewide Transportation
79 Improvement Program.
80 (b) These costs may include the cost of acquiring land, interests in land, easements and
81 rights-of-way, improving sites, and making all improvements necessary, incidental, or convenient
82 to the facilities, interest estimated to accrue on these bonds during the period to be covered by
83 construction of the projects plus a period of six months after the end of the construction period,
84 interest estimated to accrue on any bond anticipation notes issued under the authority of Chapter
85 10, Part 4, 2001 Highway Bond Anticipation Note for Salt Lake County Authorization, and all
86 related engineering, architectural, and legal fees.
87 (c) Any interest earned due to investment of bond proceeds shall be deposited into the
88 General Fund.
89 (3) If, after completion of the projects authorized under Subsection (2)(a) and payment of

90 the costs of issuing and selling the bonds under Section 63B-10-303 , any bond proceeds remain
91 unexpended, the Department of Transportation may use those unexpended proceeds to pay all or
92 part of the costs of construction projects approved and prioritized by the Transportation
93 Commission.
94 (4) The commission may, by resolution, make any statement of intent relating to a
95 reimbursement that is necessary or desirable to comply with federal tax law.
96 (5) The Department of Transportation may enter into agreements related to the projects
97 before the receipt of proceeds of bonds issued under this chapter.
98 Section 4. Section 63B-10-303 is enacted to read:
99 63B-10-303. Bond proceeds may be used to pay costs of issuance and sale.
100 The proceeds of bonds issued under this chapter shall be used for the purposes described
101 in Section 63B-10-302 and to pay all or part of any cost incident to the issuance and sale of the
102 bonds including, without limitation, printing, registration and transfer costs, legal fees, trustees'
103 fees, financial advisors' fees, liquidity providers' fees, credit enhancement providers' fees, and
104 underwriters' discount.
105 Section 5. Section 63B-10-304 is enacted to read:
106 63B-10-304. Manner of issuance -- Amounts, interest, and maturity.
107 (1) Bonds issued under this chapter may be authorized, sold, and issued at times and in a
108 manner determined by the commission by resolution.
109 (2) Bonds may be issued in one or more series, in amounts, and shall bear dates, interest
110 rates, including a variable rate, and maturity dates as the commission determines by resolution.
111 (3) A bond issued may not mature later than 15 years after the dated date of the bonds.
112 Section 6. Section 63B-10-305 is enacted to read:
113 63B-10-305. Terms and conditions of sale -- Plan of financing -- Signatures --
114 Replacement -- Registration -- Federal rebate.
115 (1) In the issuance of bonds, the commission may determine by resolution:
116 (a) the manner of sale, including public or private sale;
117 (b) the terms and conditions of sale, including price, whether at, below, or above face
118 value;
119 (c) denominations;
120 (d) form;

121 (e) manner of execution;
122 (f) manner of authentication;
123 (g) place and medium of purchase;
124 (h) redemption terms; and
125 (i) other provisions and details it considers appropriate.
126 (2) The commission may, by resolution, adopt a plan of financing, which may include
127 terms and conditions of arrangements entered into by the commission on behalf of the state with
128 financial and other institutions for letters of credit, standby letters of credit, reimbursement
129 agreements, and remarketing, indexing, and tender agent agreements to secure the bonds, including
130 payment from any legally available source of fees, charges, or other amounts coming due under
131 the agreements entered into by the commission.
132 (3) (a) Any signature of a public official authorized by resolution of the commission to
133 sign the bonds may be a facsimile signature of that official imprinted, engraved, stamped, or
134 otherwise placed on the bonds.
135 (b) If all signatures of public officials on the bonds are facsimile signatures, provision shall
136 be made for a manual authenticating signature on the bonds by or on behalf of a designated
137 authentication agent.
138 (c) If an official ceases to hold office before delivery of the bonds signed by that official,
139 the signature or facsimile signature of the official is nevertheless valid for all purposes.
140 (d) A facsimile of the state seal may be imprinted, engraved, stamped, or otherwise placed
141 on the bonds.
142 (4) (a) The commission may enact resolutions providing for the replacement of lost,
143 destroyed, or mutilated bonds, or for the exchange of bonds after issuance for bonds of smaller or
144 larger denominations.
145 (b) Bonds in changed denominations shall:
146 (i) be exchanged for the original bonds in like aggregate principal amounts and in a
147 manner that prevents the duplication of interest; and
148 (ii) bear interest at the same rate, mature on the same date, and be as nearly as practicable
149 in the form of the original bonds.
150 (5) (a) Bonds may be registered as to both principal and interest or may be in a book entry
151 form under which the right to principal and interest may be transferred only through a book entry.

152 (b) The commission may provide for the services and payment for the services of one or
153 more financial institutions or other entities or persons, or nominees, within or outside the state, for
154 the authentication, registration, transfer, including record, bookkeeping, or book entry functions,
155 exchange, and payment of the bonds.
156 (c) The records of ownership, registration, transfer, and exchange of the bonds, and of
157 persons to whom payment with respect to the obligations is made, are private records as provided
158 in Section 63-2-302 , or protected records as provided in Section 63-2-304 .
159 (d) The bonds and any evidences of participation interest in the bonds may be issued,
160 executed, authenticated, registered, transferred, exchanged, and otherwise made to comply with
161 Title 15, Chapter 7, Registered Public Obligations Act, or any other act of the Legislature relating
162 to the registration of obligations enacted to meet the requirements of Section 149 of the Internal
163 Revenue Code of 1986, as amended, or any successor to it, and applicable regulations.
164 (6) The commission may:
165 (a) by resolution, provide for payment to the United States of whatever amounts are
166 necessary to comply with Section 148 (f) of the Internal Revenue Code of 1986, as amended; and
167 (b) enter into agreements with financial and other institutions and attorneys to provide for:
168 (i) the calculation, holding, and payment of those amounts; and
169 (ii) payment from any legally available source of fees, charges, or other amounts coming
170 due under any agreements entered into by the commission.
171 Section 7. Section 63B-10-306 is enacted to read:
172 63B-10-306. Constitutional debt limitation.
173 (1) The commission may not issue bonds under this chapter in an amount that violates the
174 limitation described in Utah Constitution Article XIV, Section 1.
175 (2) For purposes of applying the debt limitation contained in Utah Constitution Article
176 XIV, Section 1, the value of the taxable property in Utah is considered to be 100% of the fair
177 market value of the taxable property of the state, as computed from the last assessment for state
178 purposes previous to the issuance of the bonds.
179 Section 8. Section 63B-10-307 is enacted to read:
180 63B-10-307. Tax levy -- Abatement of tax.
181 (1) Each year after issuance of the bonds and until all outstanding bonds are retired, there
182 is levied a direct annual tax on all real and personal property within the state subject to state

183 taxation, sufficient to pay:
184 (a) applicable bond redemption premiums, if any;
185 (b) interest on the bonds as it becomes due; and
186 (c) principal of the bonds as it becomes due.
187 (2) (a) The State Tax Commission shall fix the rate of the direct annual tax levy each year.
188 (b) The tax shall be collected and the proceeds applied as provided in this chapter.
189 (3) The direct annual tax imposed under this section is abated to the extent money is
190 available from sources, other than ad valorem taxes in the sinking fund, for the payment of bond
191 interest, principal, and redemption premiums.
192 Section 9. Section 63B-10-308 is enacted to read:
193 63B-10-308. Creation of sinking fund.
194 (1) There is created a sinking fund, to be administered by the state treasurer, entitled the
195 "2001 Highway General Obligation Bonds for Salt Lake County Sinking Fund."
196 (2) All monies deposited in the sinking fund, from whatever source, shall be used to pay
197 debt service on the bonds.
198 (3) The proceeds of all taxes levied under this chapter are appropriated to this fund.
199 (4) The state treasurer may create separate accounts within the sinking fund for each series
200 of bonds issued.
201 Section 10. Section 63B-10-309 is enacted to read:
202 63B-10-309. Payment of interest, principal, and redemption premiums.
203 (1) The Division of Finance shall draw warrants on the state treasury before any interest,
204 principal, or redemption premiums become due on the bonds.
205 (2) After receipt of the warrants, the state treasurer shall:
206 (a) promptly pay the warrants from funds within the sinking fund; and
207 (b) immediately transmit the amount paid to the paying agent for the bonds.
208 Section 11. Section 63B-10-310 is enacted to read:
209 63B-10-310. Investment of sinking fund money.
210 (1) The state treasurer may, by following the procedures and requirements of Title 51,
211 Chapter 7, State Money Management Act, invest any money contained in the sinking fund until
212 it is needed for the purposes for which the fund is created.
213 (2) Unless otherwise provided in the resolution of the commission authorizing the issuance

214 of bonds under this chapter, the treasurer shall retain all income from the investment of any money
215 contained in the sinking fund in the sinking fund and use it for the payment of debt service on the
216 bonds.
217 Section 12. Section 63B-10-311 is enacted to read:
218 63B-10-311. Bond proceeds -- Deposits -- Investment -- Disposition of investment
219 income and unexpended proceeds.
220 (1) (a) Proceeds from the sale of bonds issued under this chapter shall be deposited within
221 one or more accounts as determined by resolution of the commission.
222 (b) The state treasurer shall administer and maintain these accounts unless otherwise
223 provided by the commission by resolution.
224 (c) The commission, by resolution, may provide for the deposit of these monies with a
225 trustee and the administration, disposition, or investment of these monies by this trustee.
226 (2) (a) The commission, by resolution, shall provide for the kinds of investments in which
227 the proceeds of bonds issued under this chapter may be invested.
228 (b) Income from the investment of proceeds of bonds issued under this chapter shall be
229 applied as provided by resolution of the commission.
230 (3) Any unexpended bond proceeds issued under this chapter shall be deposited, upon
231 completion of the purposes for which the bonds were issued, in the sinking fund, unless otherwise
232 provided in the resolution of the commission authorizing the issuance of bonds under this chapter.
233 Section 13. Section 63B-10-312 is enacted to read:
234 63B-10-312. Refunding of bonds.
235 (1) The commission may provide for the refunding of any of the bonds in accordance with
236 Title 11, Chapter 27, Utah Refunding Bond Act.
237 (2) For purposes of Title 11, Chapter 27, Utah Refunding Bond Act, the state is considered
238 the public body and the commission its governing body.
239 Section 14. Section 63B-10-313 is enacted to read:
240 63B-10-313. Certification of satisfaction of conditions precedent -- Conclusiveness.
241 (1) The commission may not issue any bond under this chapter until it finds and certifies
242 that all conditions precedent to issuance of the bonds have been satisfied.
243 (2) A recital on any bond of this finding and certification conclusively establishes the
244 completion and satisfaction of all such conditions.

245 Section 15. Section 63B-10-314 is enacted to read:
246 63B-10-314. Tax exemption.
247 The bonds issued under this chapter, any interest paid on the bonds, and any income from
248 the bonds are not taxable in this state for any purpose, except for the corporate franchise tax.
249 Section 16. Section 63B-10-315 is enacted to read:
250 63B-10-315. Legal investment status.
251 Bonds issued under this chapter are legal investments for all state trust funds, insurance
252 companies, banks, trust companies, and the State School Fund and may be used as collateral to
253 secure legal obligations.
254 Section 17. Section 63B-10-316 is enacted to read:
255 63B-10-316. Publication of resolution or notice -- Limitation on actions to contest
256 legality.
257 (1) The commission may:
258 (a) publish any resolution it adopts under this chapter once in a newspaper having general
259 circulation in Utah; or
260 (b) in lieu of publishing the entire resolution, publish a notice of bonds to be issued, titled
261 as such, containing the information required by Subsection 11-14-21 (3).
262 (2) (a) Any interested person, for 30 days after the date of publication, may contest:
263 (i) the legality of the resolution;
264 (ii) any of the bonds authorized under it; or
265 (iii) any of the provisions made for the security and repayment of the bonds.
266 (b) After 30 days, a person may not contest the legality of the resolution, any of the bonds
267 authorized under it, or any of the provisions made for the security and repayment of the bonds for
268 any cause.
269 Section 18. Section 63B-10-317 is enacted to read:
270 63B-10-317. Report to Legislature.
271 The governor shall report the commission's proceedings to each annual general session of
272 the Legislature in his budget for as long as bonds issued under this chapter remain outstanding.
273 Section 19. Section 63B-10-401 is enacted to read:
274 Part 4. 2001 Highway Bond Anticipation Note for Salt Lake County Authorization
275 63B-10-401. Definitions.

276 As used in this part:
277 (1) "Bond anticipation note" means a note issued in anticipation of the receipt of the
278 proceeds of the sale of the bonds authorized under Part 3 of this chapter.
279 (2) "Flexible note" means a bond anticipation note whose interest is payable at, and on one
280 or more dates before, maturity.
281 (3) (a) "Short-term series note" means a bond anticipation note that is one of a series of
282 notes issued pursuant to a financing program under which it is expected that:
283 (i) each note will be paid from the proceeds of one or more renewal notes of that series;
284 and
285 (ii) the final note or notes of the series will be paid from:
286 (A) the proceeds of bonds in anticipation of the receipt of which the note or notes were
287 issued; or
288 (B) monies of the state on hand and legally available for that purpose.
289 (b) "Short-term series note" includes any note issued pursuant to a revolving credit
290 agreement or other similar liquidity facility for the purpose of renewing or paying outstanding
291 short-term series notes on their stated maturity dates when those short-term series notes are not
292 renewed or paid from the proceeds of one or more other renewal notes of the series.
293 Section 20. Section 63B-10-402 is enacted to read:
294 63B-10-402. Authorization, terms, and procedures.
295 (1) The state treasurer may, by written order, issue bond anticipation notes and renewals
296 of bond anticipation notes, including, but not limited to, flexible notes and short-term series notes,
297 in the form and with the terms that he determines.
298 (2) The state treasurer may:
299 (a) enter into whatever agreements with other persons that he considers necessary or
300 appropriate in connection with the issuance, sale, and resale of the notes; and
301 (b) resell or retire any notes purchased by the state before the stated maturity of those
302 notes.
303 (3) (a) The notes and renewals of the notes shall:
304 (i) bear the interest rate or rates as determined by the state treasurer; and
305 (ii) mature within a period not to exceed three years.
306 (b) The notes and renewals of notes may:

307 (i) bear a variable interest rate; and
308 (ii) be redeemed prior to maturity by the state treasurer, but only in accordance with the
309 provisions of the notes relating to redemption prior to maturity.
310 (4) The proceeds from the sale of the notes may be used only for:
311 (a) the purposes established in Section 63B-10-302 ;
312 (b) the payment of principal of and, if not otherwise provided, interest on, bond
313 anticipation notes;
314 (c) the payment of costs of issuance; or
315 (d) any combination of Subsections (4)(a), (b), and (c).
316 (5) (a) All of the notes and any renewals of the notes shall be payable from the proceeds
317 of the sale of bonds.
318 (b) A renewal of any note may not be issued after the sale of bonds in anticipation of
319 which the original note was issued.
320 (6) If a sale of the bonds has not occurred before the maturity of the notes issued in
321 anticipation of the sale, the state treasurer shall, in order to meet the notes then maturing:
322 (a) issue renewal notes for that purpose;
323 (b) pay the notes from state monies legally available for paying those notes; or
324 (c) any combination of Subsections (6)(a) and (b).
325 (7) Each note and any renewal of any note, with the interest on the note or renewal,
326 constitute general obligations of the state.
327 (8) Each note and any renewal of any note, with the interest on the note or renewal, shall
328 be:
329 (a) secured by the full faith, credit, and resources of the state in the manner provided in
330 Part 3 of this chapter;
331 (b) payable from:
332 (i) the proceeds of the sale of the bonds and not from any other borrowing; and
333 (ii) monies of the state on hand and legally available for that purpose; or
334 (iii) any combination of Subsections (8)(b)(i) and (ii); and
335 (c) payable within five years from the date of original issue.
336 (9) (a) As used in this Subsection (9), "total amount of bonds authorized to be issued but
337 not yet issued" includes bonds authorized to be issued only if one or more conditions are met.

338 (b) The total amount of notes or renewals of notes issued and outstanding at any one time
339 may not exceed the total amount of bonds authorized to be issued but not yet issued.
340 (10) The state treasurer shall, in his annual report to the governor, include a detailed
341 statement of all notes and bonds issued during the year and of his actions in relation to them.
342 Section 21. Section 63B-10-403 is enacted to read:
343 63B-10-403. Purchase and redemption requirements.
344 (1) The notes and renewals of notes may provide the holders of the notes or renewals of
345 notes with the right to require the state or other persons to purchase or redeem the notes or renewal
346 notes before the stated maturity of the notes or renewals.
347 (2) Notwithstanding Subsection (1), the holders of the notes and renewals of notes may
348 not be provided with the right to require the state to repurchase or redeem the notes and renewals
349 of the notes before their stated maturity unless the state has entered into one or more letter of credit
350 agreements or other liquidity facility agreements:
351 (a) for the express purpose of those sales;
352 (b) that require a financially responsible party or parties to the agreement or agreements,
353 other than the state, to purchase or redeem all or any portion of the notes and renewals of notes
354 tendered by the holders of the notes or renewals of notes for repurchase or redemption before the
355 stated maturity of the notes and renewals of notes; and
356 (c) that continue until the right of the holders of the notes and renewals of notes to require
357 repurchase or redemption of the notes and renewals of notes before the stated maturity has ceased.
358 Section 22. Section 63B-10-404 is enacted to read:
359 63B-10-404. General provisions -- Funds and accounts.
360 (1) (a) Sections 63B-10-305 , 63B-10-306 , 63B-10-313 , 63B-10-314 , 63B-10-315 , and
361 63B-10-316 apply to any notes or renewals of notes issued under this part.
362 (b) (i) For purposes of this part, any action that those sections require or permit the
363 commission to take shall be considered sufficient if taken by the state treasurer.
364 (ii) The treasurer may take action by issuing a written order, or in some other manner that
365 he finds necessary or convenient, to accomplish the purposes of this part.
366 (2) The treasurer may:
367 (a) in a written order, establish whatever funds and accounts are necessary or desirable to
368 carry out the purposes of this part; and

369 (b) until the monies are needed for the purpose for which the fund or account was created,
370 invest the monies held in those funds and accounts by following the procedures and requirements
371 of Title 51, Chapter 7, State Money Management Act.




Legislative Review Note
as of 2-20-01 12:09 PM

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

Office of Legislative Research and General Counsel