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S.B. 2 Enrolled
This act modifies the Bonding Code by authorizing the issuance and sale of general
obligation bonds and bond anticipation notes by the State Bonding Commission for certain
highways and related facilities. This act specifies the use of the bond proceeds and the
manner of issuance. This act imposes and abates a property tax and creates a sinking fund.
This act affects sections of Utah Code Annotated 1953 as follows:
ENACTS:
63B-11-201, Utah Code Annotated 1953
63B-11-202, Utah Code Annotated 1953
63B-11-203, Utah Code Annotated 1953
63B-11-204, Utah Code Annotated 1953
63B-11-205, Utah Code Annotated 1953
63B-11-206, Utah Code Annotated 1953
63B-11-207, Utah Code Annotated 1953
63B-11-208, Utah Code Annotated 1953
63B-11-209, Utah Code Annotated 1953
63B-11-210, Utah Code Annotated 1953
63B-11-211, Utah Code Annotated 1953
63B-11-212, Utah Code Annotated 1953
63B-11-213, Utah Code Annotated 1953
63B-11-214, Utah Code Annotated 1953
63B-11-215, Utah Code Annotated 1953
63B-11-216, Utah Code Annotated 1953
63B-11-217, Utah Code Annotated 1953
63B-11-301, Utah Code Annotated 1953
63B-11-302, Utah Code Annotated 1953
63B-11-303, Utah Code Annotated 1953
63B-11-304, Utah Code Annotated 1953
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 63B-11-201 is enacted to read:
63B-11-201. State Bonding Commission authorized to issue general obligation bonds.
The commission created under Section 63B-1-201 may issue and sell general obligation
bonds of the state pledging the full faith, credit, and resources of the state for the payment of the
principal of and interest on the bonds, to provide funds to the Department of Transportation.
Section 2. Section 63B-11-202 is enacted to read:
63B-11-202. Maximum amount -- Projects authorized.
(1) The total amount of bonds issued under this part may not exceed $159,000,000.
(2) (a) Proceeds from the issuance of bonds shall be provided to the Department of
Transportation to provide funds to pay all or part of the costs of state highway construction or
reconstruction projects.
(b) These costs may include the cost of acquiring land, interests in land, easements and
rights-of-way, improving sites, and making all improvements necessary, incidental, or convenient
to the facilities, interest estimated to accrue on these bonds during the period to be covered by
construction of the projects plus a period of six months after the end of the construction period,
interest estimated to accrue on any bond anticipation notes issued under the authority of Chapter 11,
Part 3, 2002 Highway General Obligation Bond Anticipation Notes Authorization, and all related
engineering, architectural, and legal fees.
(3) The commission or the state treasurer may make any statement of intent relating to a
reimbursement that is necessary or desirable to comply with federal tax law.
(4) The Department of Transportation may enter into agreements related to that project
before the receipt of proceeds of bonds issued under this chapter.
Section 3. Section 63B-11-203 is enacted to read:
63B-11-203. Bond proceeds may be used to pay costs of issuance and sale.
The proceeds of bonds issued under this chapter shall be used for the purposes described in
Section 63B-11-202 and to pay all or part of any cost incident to the issuance and sale of the bonds
including, without limitation, printing, registration and transfer costs, legal fees, trustees' fees,
financial advisors' fees, and underwriters' discount.
Section 4. Section 63B-11-204 is enacted to read:
63B-11-204. Manner of issuance -- Amounts, interest, and maturity.
(1) Bonds issued under this chapter may be authorized, sold, and issued at times and in a
manner determined by the commission by resolution.
(2) Bonds may be issued in one or more series, in amounts, and shall bear dates, interest
rates, including a variable rate, and maturity dates as the commission determines by resolution.
(3) A bond issued may not mature later than 15 years after the dated date of the bonds.
Section 5. Section 63B-11-205 is enacted to read:
63B-11-205. Terms and conditions of sale -- Plan of financing -- Signatures --
Replacement -- Registration -- Federal rebate.
(1) In the issuance of bonds, the commission may determine by resolution:
(a) the manner of sale, including public or private sale;
(b) the terms and conditions of sale, including price, whether at, below, or above face value;
(c) denominations;
(d) form;
(e) manner of execution;
(f) manner of authentication;
(g) place and medium of purchase;
(h) redemption terms; and
(i) other provisions and details it considers appropriate.
(2) The commission may, by resolution, adopt a plan of financing, which may include terms
and conditions of arrangements entered into by the commission on behalf of the state with financial
and other institutions for letters of credit, standby letters of credit, reimbursement agreements, and
remarketing, indexing, and tender agent agreements to secure the bonds, including payment from any
legally available source of fees, charges, or other amounts coming due under the agreements entered
into by the commission.
(3) (a) Any signature of a public official authorized by resolution of the commission to sign
the bonds may be a facsimile signature of that official imprinted, engraved, stamped, or otherwise
placed on the bonds.
(b) If all signatures of public officials on the bonds are facsimile signatures, provision shall
be made for a manual authenticating signature on the bonds by or on behalf of a designated
authentication agent.
(c) If an official ceases to hold office before delivery of the bonds signed by that official, the
signature or facsimile signature of the official is nevertheless valid for all purposes.
(d) A facsimile of the state seal may be imprinted, engraved, stamped, or otherwise placed
on the bonds.
(4) (a) The commission may enact resolutions providing for the replacement of lost,
destroyed, or mutilated bonds, or for the exchange of bonds after issuance for bonds of smaller or
larger denominations.
(b) Bonds in changed denominations shall:
(i) be exchanged for the original bonds in like aggregate principal amounts and in a manner
that prevents the duplication of interest; and
(ii) bear interest at the same rate, mature on the same date, and be as nearly as practicable
in the form of the original bonds.
(5) (a) Bonds may be registered as to both principal and interest or may be in a book entry
form under which the right to principal and interest may be transferred only through a book entry.
(b) The commission may provide for the services and payment for the services of one or
more financial institutions or other entities or persons, or nominees, within or outside the state, for
the authentication, registration, transfer, including record, bookkeeping, or book entry functions,
exchange, and payment of the bonds.
(c) The records of ownership, registration, transfer, and exchange of the bonds, and of
persons to whom payment with respect to the obligations is made, are private records as provided
in Section 63-2-302 , or protected records as provided in Section 63-2-304 .
(d) The bonds and any evidences of participation interest in the bonds may be issued,
executed, authenticated, registered, transferred, exchanged, and otherwise made to comply with Title
15, Chapter 7, Registered Public Obligations Act, or any other act of the Legislature relating to the
registration of obligations enacted to meet the requirements of Section 149 of the Internal Revenue
Code of 1986, as amended, or any successor to it, and applicable regulations.
(6) The commission may:
(a) by resolution, provide for payment to the United States of whatever amounts are
necessary to comply with Section 148(f) of the Internal Revenue Code of 1986, as amended; and
(b) enter into agreements with financial and other institutions and attorneys to provide for:
(i) the calculation, holding, and payment of those amounts; and
(ii) payment from any legally available source of fees, charges, or other amounts coming due
under any agreements entered into by the commission.
Section 6. Section 63B-11-206 is enacted to read:
63B-11-206. Constitutional debt limitation.
(1) The commission may not issue bonds under this chapter in an amount that violates the
limitation described in Utah Constitution Article XIV, Section 1.
(2) For purposes of applying the debt limitation contained in Utah Constitution Article XIV,
Section 1, the value of the taxable property in Utah is considered to be 100% of the fair market value
of the taxable property of the state, including fee-in-lieu property, as computed from the last
assessment for state purposes previous to the issuance of the bonds.
Section 7. Section 63B-11-207 is enacted to read:
63B-11-207. Tax levy -- Abatement of tax.
(1) Each year after issuance of the bonds and until all outstanding bonds are retired, there
is levied a direct annual tax on all real and personal property within the state subject to state taxation,
sufficient to pay:
(a) applicable bond redemption premiums, if any;
(b) interest on the bonds as it becomes due; and
(c) principal of the bonds as it becomes due.
(2) (a) The State Tax Commission shall fix the rate of the direct annual tax levy each year.
(b) The tax shall be collected and the proceeds applied as provided in this chapter.
(3) The direct annual tax imposed under this section is abated to the extent money is
available from sources, other than ad valorem taxes in the sinking fund, for the payment of bond
interest, principal, and redemption premiums.
Section 8. Section 63B-11-208 is enacted to read:
63B-11-208. Creation of sinking fund.
(1) There is created a sinking fund, to be administered by the state treasurer, entitled the
"2002 Highway General Obligation Bonds Sinking Fund."
(2) All monies deposited in the sinking fund, from whatever source, shall be used to pay debt
service on the bonds.
(3) The proceeds of all taxes levied under this chapter are appropriated to this fund.
(4) The state treasurer may create separate accounts within the sinking fund for each series
of bonds issued.
Section 9. Section 63B-11-209 is enacted to read:
63B-11-209. Payment of interest, principal, and redemption premiums.
(1) The Division of Finance shall draw warrants on the state treasury before any interest,
principal, or redemption premiums become due on the bonds.
(2) After receipt of the warrants, the state treasurer shall:
(a) promptly pay the warrants from funds within the sinking fund; and
(b) immediately transmit the amount paid to the paying agent for the bonds.
Section 10. Section 63B-11-210 is enacted to read:
63B-11-210. Investment of sinking fund money.
(1) The state treasurer may, by following the procedures and requirements of Title 51,
Chapter 7, State Money Management Act, invest any money contained in the sinking fund until it
is needed for the purposes for which the fund is created.
(2) Unless otherwise provided in the resolution of the commission authorizing the issuance
of bonds under this chapter, the treasurer shall retain all income from the investment of any money
contained in the sinking fund in the sinking fund and use it for the payment of debt service on the
bonds.
Section 11. Section 63B-11-211 is enacted to read:
63B-11-211. Bond proceeds -- Deposits -- Investment -- Disposition of investment
income and unexpended proceeds.
(1) (a) Proceeds from the sale of bonds issued under this chapter shall be deposited within
one or more accounts as determined by resolution of the commission.
(b) The state treasurer shall administer and maintain these accounts unless otherwise
provided by the commission by resolution.
(c) The commission, by resolution, may provide for the deposit of these monies with a
trustee and the administration, disposition, or investment of these monies by this trustee.
(2) (a) The commission, by resolution, shall provide for the kinds of investments in which
the proceeds of bonds issued under this chapter may be invested.
(b) Income from the investment of proceeds of bonds issued under this chapter shall be
applied as provided by resolution of the commission.
(3) Any unexpended bond proceeds issued under this chapter shall be deposited, upon
completion of the purposes for which the bonds were issued, in the sinking fund, unless otherwise
provided in the resolution of the commission authorizing the issuance of bonds under this chapter.
Section 12. Section 63B-11-212 is enacted to read:
63B-11-212. Refunding of bonds.
(1) The commission may provide for the refunding of any of the bonds in accordance with
Title 11, Chapter 27, Utah Refunding Bond Act.
(2) For purposes of Title 11, Chapter 27, Utah Refunding Bond Act, the state of Utah is
considered the public body and the commission its governing body.
Section 13. Section 63B-11-213 is enacted to read:
63B-11-213. Certification of satisfaction of conditions precedent -- Conclusiveness.
(1) The commission may not issue any bond under this chapter until it finds and certifies that
all conditions precedent to issuance of the bonds have been satisfied.
(2) A recital on any bond of this finding and certification conclusively establishes the
completion and satisfaction of all these conditions.
Section 14. Section 63B-11-214 is enacted to read:
63B-11-214. Tax exemption.
The bonds issued under this chapter, any interest paid on the bonds, and any income from the
bonds are not taxable in this state for any purpose, except for the corporate franchise tax.
Section 15. Section 63B-11-215 is enacted to read:
63B-11-215. Legal investment status.
Bonds issued under this chapter are legal investments for all state trust funds, insurance
companies, banks, trust companies, and the State School Fund and may be used as collateral to
secure legal obligations.
Section 16. Section 63B-11-216 is enacted to read:
63B-11-216. Publication of resolution or notice -- Limitation on actions to contest
legality.
(1) The commission may:
(a) publish any resolution it adopts under this chapter once in a newspaper having general
circulation in Utah; or
(b) in lieu of publishing the entire resolution, publish a notice of bonds to be issued, titled
as such, containing the information required by Subsection 11-14-21 (3).
(2) (a) Any interested person, for 30 days after the date of publication, may contest:
(i) the legality of the resolution;
(ii) any of the bonds authorized under it; or
(iii) any of the provisions made for the security and repayment of the bonds.
(b) After 30 days, a person may not contest the legality of the resolution, any of the bonds
authorized under it, or any of the provisions made for the security and repayment of the bonds for
any cause.
Section 17. Section 63B-11-217 is enacted to read:
63B-11-217. Report to Legislature.
The governor shall report the commission's proceedings to each annual general session of the
Legislature in his budget for as long as bonds issued under this chapter remain outstanding.
Section 18. Section 63B-11-301 is enacted to read:
63B-11-301. Definitions.
As used in this part:
(1) "Bond anticipation note" means a note issued in anticipation of the receipt of the
proceeds of the sale of the bonds authorized under Part 2 of this chapter.
(2) "Flexible note" means a bond anticipation note whose interest is payable at, and on one
or more dates before, maturity.
(3) (a) "Short-term series note" means a bond anticipation note that is one of a series of notes
issued pursuant to a financing program under which it is expected that:
(i) each note will be paid from the proceeds of one or more renewal notes of that series; and
(ii) the final note or notes of the series will be paid from:
(A) the proceeds of bonds in anticipation of the receipt of which the note or notes were
issued; or
(B) monies of the state on hand and legally available for that purpose.
(b) "Short-term series note" includes any note issued pursuant to a revolving credit
agreement or other similar liquidity facility for the purpose of renewing or paying outstanding
short-term series notes on their stated maturity dates when those short-term series notes are not
renewed or paid from the proceeds of one or more other renewal notes of the series.
Section 19. Section 63B-11-302 is enacted to read:
63B-11-302. Authorization, terms, and procedures.
(1) The state treasurer may, by written order, issue bond anticipation notes and renewals of
bond anticipation notes, including, but not limited to, flexible notes and short-term series notes, in
the form and with the terms that he determines.
(2) The state treasurer may:
(a) enter into whatever agreements with other persons that he considers necessary or
appropriate in connection with the issuance, sale, and resale of the notes; and
(b) resell or retire any notes purchased by the state before the stated maturity of those notes.
(3) (a) The notes and renewals of the notes shall:
(i) bear the interest rate or rates as determined by the state treasurer; and
(ii) mature within a period not to exceed five years from the date of original issuance.
(b) The notes and renewals of notes may:
(i) bear a variable interest rate; and
(ii) be redeemed prior to maturity by the state treasurer, but only in accordance with the
provisions of the notes relating to redemption prior to maturity.
(4) The proceeds from the sale of the notes may be used only for:
(a) the purposes established in Section 63B-11-202 ;
(b) the payment of principal of and, if not otherwise provided, interest on, bond anticipation
notes;
(c) the payment of costs of issuance; or
(d) any combination of Subsections (4)(a), (b), and (c).
(5) (a) All of the notes and any renewals of the notes shall be payable from the proceeds of
the sale of bonds.
(b) A renewal of any note may not be issued after the sale of bonds in anticipation of which
the original note was issued.
(6) If a sale of the bonds has not occurred before the maturity of the notes issued in
anticipation of the sale, the state treasurer shall, in order to meet the notes then maturing:
(a) issue renewal notes for that purpose;
(b) pay the notes from state monies legally available for paying those notes; or
(c) any combination of Subsections (6)(a) and (b).
(7) Each note and any renewal of any note, with the interest on the note or renewal,
constitute general obligations of the state.
(8) Each note and any renewal of any note, with the interest on the note or renewal, shall be:
(a) secured by the full faith, credit, and resources of the state in the manner provided in Part
2 of this chapter;
(b) payable from:
(i) the proceeds of the sale of the bonds and not from any other borrowing; and
(ii) monies of the state on hand and legally available for that purpose; or
(iii) any combination of Subsections (8)(b)(i) and (ii); and
(c) payable within five years from the date of original issue.
(9) (a) As used in this Subsection (9), "total amount of bonds authorized to be issued but not
yet issued" includes bonds authorized to be issued only if one or more conditions are met.
(b) The total amount of notes or renewals of notes issued and outstanding at any one time
may not exceed the total amount of bonds authorized to be issued but not yet issued.
(10) The state treasurer shall, in his annual report to the governor, include a detailed
statement of all notes and bonds issued during the year and of his actions in relation to them.
Section 20. Section 63B-11-303 is enacted to read:
63B-11-303. Purchase and redemption requirements.
(1) The notes and renewals of notes may provide the holders of the notes or renewals of
notes with the right to require the state or other persons to purchase or redeem the notes or renewal
notes before the stated maturity of the notes or renewals.
(2) Notwithstanding Subsection (1), the holders of the notes and renewals of notes may not
be provided with the right to require the state to repurchase or redeem the notes and renewals of the
notes before their stated maturity unless the state has entered into one or more letter of credit
agreements or other liquidity facility agreements:
(a) for the express purpose of those sales;
(b) that require a financially responsible party or parties to the agreement or agreements,
other than the state, to purchase or redeem all or any portion of the notes and renewals of notes
tendered by the holders of the notes or renewals of notes for repurchase or redemption before the
stated maturity of the notes and renewals of notes; and
(c) that continue until the right of the holders of the notes and renewals of notes to require
repurchase or redemption of the notes and renewals of notes before the stated maturity has ceased.
Section 21. Section 63B-11-304 is enacted to read:
63B-11-304. General provisions -- Funds and accounts.
(1) (a) Sections 63B-11-205 , 63B-11-206 , 63B-11-213 , 63B-11-214 , 63B-11-215 , and
63B-11-216 apply to any notes or renewals of notes issued under this part.
(b) (i) For purposes of this part, any action that those sections require or permit the
commission to take shall be considered sufficient if taken by the state treasurer.
(ii) The treasurer may take action by issuing a written order, or in some other manner that
he finds necessary or convenient, to accomplish the purposes of this part.
(2) The treasurer may:
(a) in a written order, establish whatever funds and accounts are necessary or desirable to
carry out the purposes of this part; and
(b) until the monies are needed for the purpose for which the fund or account was created,
invest the monies held in those funds and accounts by following the procedures and requirements
of Title 51, Chapter 7, State Money Management Act.
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