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6 This act modifies the State Financing Consolidation Act provisions by defining additional
7 terms, clarifying the scope of the act, modifying certain responsibilities and processes
8 established by the act, and making technical corrections.
9 This act affects sections of Utah Code Annotated 1953 as follows:
11 63-65-2, as last amended by Chapter 270, Laws of Utah 1998
12 63-65-3, as last amended by Chapter 135, Laws of Utah 1997
13 63-65-4, as last amended by Chapter 175, Laws of Utah 2001
14 63-65-5, as repealed and reenacted by Chapter 164, Laws of Utah 1989
15 63-65-6, as enacted by Chapter 164, Laws of Utah 1989
16 63-65-7, as enacted by Chapter 164, Laws of Utah 1989
17 63-65-8, as last amended by Chapter 259, Laws of Utah 1991
18 63-65-9, as enacted by Chapter 164, Laws of Utah 1989
20 63-65-8.1, Utah Code Annotated 1953
21 63-65-8.2, Utah Code Annotated 1953
22 Be it enacted by the Legislature of the state of Utah:
23 Section 1. Section 63-65-2 is amended to read:
24 63-65-2. Definitions.
25 As used in this chapter:
26 (1) "Agency bonds" means any bond, note, contract, or other evidence of indebtedness
27 representing loans or grants made by an authorizing [
28 (2) "Authorized official" means the state treasurer or other person authorized by a bond
29 document to perform the required action.
31 responsibility for administering and managing revolving loan funds.
32 (4) "Bond document" means:
33 (a) a resolution of the commission; or
34 (b) an indenture or other similar document authorized by the commission that
35 authorizes and secures outstanding revenue bonds from time to time.
36 (5) "Commission" means the State Bonding Commission created in Section
37 63B-1-201 .
41 (a) the Water Resources Conservation and Development Fund, created in Section
42 73-10-24 ;
43 (b) the Water Resources Construction Fund, created in Section 73-10-8 ;
44 (c) the Water Resources Cities Water Loan Fund, created in Section 73-10-22 ;
45 (d) the Clean Fuel Conversion Funds, created in Title [
46 Clean Fuels Conversion Program Act;
47 (e) the Water Development Security [
48 Section 73-10c-5 ;
49 (f) the Agriculture Resource Development Fund, created in Section 4-18-6 ;
50 (g) the Utah Rural Rehabilitation Fund, created in Section 4-19-4 ;
51 (h) the Permanent Community Impact Fund, created in Section 9-4-303 ;
52 (i) the Petroleum Storage Tank Loan Fund, created in Section 19-6-405.3 ; and
53 (j) the Transportation Infrastructure Loan Fund, created in Section 72-2-202 .
54 Section 2. Section 63-65-3 is amended to read:
55 63-65-3. Investment officer -- Powers and duties.
56 (1) There is created within the Office of the State Treasurer an investment banking
57 officer to advise, counsel, and render technical assistance to authorizing agencies in the
58 management of state loan and grant programs.
59 (2) This officer shall:
60 (a) work cooperatively with the staff and boards of authorizing agencies as an advisor
61 on technical financial aspects concerning loan and grant programs authorized by law;
62 (b) coordinate procedures for the closing of and assist authorizing agencies in closing
63 all loans and grants of funds or other subsidy agreements;
64 (c) analyze, in conjunction with the appropriate authorizing agency, the financial
65 feasibility and economic and capital efficiency of projects of applicants to authorizing agencies
66 for loans and grants, review financing options, and make recommendations to each authorizing
67 agency regarding terms of loans or grants and levels of state subsidy in accordance with the
68 financial feasibility of the project and the efficiency of available state capital;
69 (d) coordinate and consolidate, to the extent possible, all financial and legal analysis of
70 financing plans and closings of loans and grants made by each authorizing agency; and
71 (e) provide an annual report of his activities to the state treasurer, the governor, the
72 Division of Finance, and the boards of each authorizing agency.
73 (3) The analysis under Subsection (2)(c) shall include[
74 consideration of the following criteria:
75 (a) a demonstration of need based on the applicant's overall financial profile, including
77 other revenue and obligations existing within the community as a whole;
78 (b) the ability of the applicant to obtain financing from other, [
79 sources on terms and conditions reasonably affordable;
80 (c) the availability and advisability of financing methods such as loans, grants, interest
81 buy down arrangements, bond insurance, loan or bond guarantees, or any other appropriate
83 (d) the economic and efficiency of capital advantages enuring to the authorizing agency
84 if the financing plan is adopted;
85 (e) a demonstration of local public support for the financing plan; and
86 (f) availability of other funds and financing methods under law.
87 (4) Each authorizing agency shall consult with and cooperate with the officer and shall
88 consider his recommendations before proceeding to fund a project, but the final decision as to
89 the appropriate financing plan shall rest with the board of the authorizing agency according to
90 their legal authority existing at the time.
91 Section 3. Section 63-65-4 is amended to read:
92 63-65-4. Custodial officer -- Powers and duties.
93 (1) There is created within the Division of Finance an officer responsible for the care,
94 custody, safekeeping, collection, and accounting of all bonds, notes, contracts, trust documents,
95 and other evidences of indebtedness owned or administered by:
96 (a) the state or any of its agencies; and
97 (b) revolving loan funds except the:
98 (i) Agriculture Resource Development Fund, created in Section 4-18-6 ;
99 (ii) Utah Rural Rehabilitation Fund, created in Section 4-19-4 ;
100 (iii) Petroleum Storage Tank Loan Fund, created in Section 19-6-405.3 ; and
101 (iv) Olene Walker Housing Loan Fund, created in Section 9-4-702 .
102 (2) (a) Each authorizing agency shall deliver to this officer for his care, custody,
103 safekeeping, collection, and accounting all bonds, notes, contracts, trust documents, and other
104 evidences of indebtedness owned or administered by:
105 (i) the state or any of its agencies; and
106 (ii) revolving loan funds.
107 (b) This officer shall:
108 (i) establish systems, programs, and facilities for the care, custody, safekeeping,
109 collection, and accounting for the bonds, notes, contracts, trust documents, and other evidences
110 of indebtedness submitted to him under this Subsection (2); and
111 (ii) shall make available updated reports to each authorizing agency as to the status of
112 loans under their authority.
113 (3) The officer described in Section 63-65-3 shall deliver to this officer for his care,
114 custody, safekeeping, collection, and accounting all bonds, notes, contracts, trust documents,
115 and other evidences of indebtedness closed as provided in Subsection 63-65-3 (2)(b).
116 Section 4. Section 63-65-5 is amended to read:
117 63-65-5. State treasurer may sell, assign, or liquidate agency bonds -- Marketing
118 plan required.
119 (1) [
120 state treasurer to[
121 authorizing agencies as provided in Section 63-65-6 [
125 (2) (a) Agency bonds shall be sold, assigned, transferred, or [
127 provided by the state treasurer under Section 63-65-6 [
130 (b) The governor or the governor's designee and the appropriate authorizing agency
131 shall approve the marketing plan, in writing.
132 Section 5. Section 63-65-6 is amended to read:
133 63-65-6. Marketing plan and related agreements -- Use of proceeds of liquidation
134 of agency bonds -- Report to Division of Finance -- Special funds -- Limitation on
136 (1) (a) [
137 an authorizing agency as provided in Section 63-65-5 , the state treasurer shall provide a written
139 authorizing agency or agencies for written approval.
140 (b) The marketing plan [
141 (i) the terms and conditions under which the agency bonds may be sold, assigned, or
143 (ii) the particular agency bonds to be sold, assigned, or [
144 maximum par amount of agency bonds to be sold, assigned, or [
145 (iii) the price or a range of prices of the agency bonds to be sold, assigned, or [
146 liquidated, which may be at, above, or below par, as the state treasurer determines in the [
148 (iv) the terms and conditions of agreements entered into by the state treasurer on behalf
149 of the state with financial and other institutions for financial advisory services, trustee services,
150 insurance, letters of credit, reimbursement agreements, tender agreements, put agreements,
151 repurchase agreements, and indexing and tender agent agreements to facilitate the [
152 marketing plan or to secure or provide liquidity to support any agreement, obligation, or
153 contract entered into by the state treasurer on behalf of the state in connection with the sale,
154 assignment, or [
155 other [
156 tender, put, letter of credit, or agreement, obligation, or contract entered in connection with
157 them, including payment of fees, charges, or other amounts coming due under agreements
158 entered into with financial or other institutions by the state treasurer, from the proceeds of any
159 sale, [
160 investment earnings on such proceeds, and no other state money may be used for this purpose;
161 (v) the application of the proceeds received from the sale, assignment, or [
162 liquidation of agency bonds, and any investment earnings on them; and
163 (vi) all other details relating to the sale, assignment, or [
164 bonds and any related, attached, or accompanying insurance, tender, put, repurchase,
165 remarketing, letter of credit, or other agreement, obligation, or contract deemed necessary or
166 appropriate by the state treasurer.
168 contemplated in the [
169 (2) (a) After the payment of, or provision for payment of, the fees, charges, or other
174 loan or grant program of [
175 (b) (i) The marketing plan [
176 obligation, or contract entered into by the state treasurer on behalf of the state with respect to
177 the sale, repurchase, [
178 liquidation of the agency bonds remains outstanding under the [
179 proceeds, and investment earnings on them, may be pledged, escrowed, held in trust, or
180 otherwise held in reserve by the state treasurer to secure these agreements, obligations, or
181 contracts of the state treasurer entered into on behalf of the state.
182 (ii) Any [
183 under Subsection (2)(b)(i) shall be limited solely to [
184 earnings on them.
185 (c) No holder or beneficiary of any put, tender, repurchase, remarketing, or other
186 similar rights under such agreements, obligations, or contracts of the state treasurer entered into
187 on behalf of the state has any rights against the state, the state treasurer or any state agency, or
188 funds of the state, the state treasurer, or any state agency, other than those expressly set forth in
189 the agreement or contract embodying [
191 (3) (a) (i) The state treasurer may establish more than one [
192 under this section.
193 (ii) Agency bonds may be combined in any combination and sold, pledged, assigned, or
194 otherwise [
195 provided in the applicable marketing plan [
196 (b) The state treasurer may, by order, set forth the sale price, form, manner of
197 execution, payment, manner of sale, [
198 and all details of agreements or contracts entered into in connection with them, including the
199 application of any proceeds and the investment earnings on them, consistent with the [
200 marketing plan and this section.
201 (c) The state treasurer shall make a verified return to the Division of Finance
202 immediately upon completion of each transaction of:
203 (i) the amount of agency bonds involved;
204 (ii) the amounts received in each transaction entered into under this section; and
205 (iii) a brief description of any pledge or other restriction on the proceeds of the
206 transaction or the investment earnings on the proceeds.
207 (4) The state treasurer may:
208 (a) create any funds necessary to carry out the purposes of this section[
210 (b) invest all money held in those funds in accordance with Title 51, Chapter 7, State
211 Money Management Act [
212 pursuant to the [
214 (c) invest money held in the funds [
215 territory, or possession of the United States, or of any of the political subdivisions of any state,
216 territory, or possession of the United States, or of the District of Columbia, described in
217 Section 103, Internal Revenue Code of 1986.
218 (5) The limitations contained in this section with respect to the liability of the state or
219 its agencies may not be construed to limit or alter the obligations of political subdivisions on
220 the bonds in the hands of the holders of them in any manner.
221 Section 6. Section 63-65-7 is amended to read:
222 63-65-7. Pledge of agency bonds to pay revenue bonds -- Contents of financing
223 agreements -- Use of monies received by authorizing agencies.
241 (1) With the approval of the relevant authorizing agency, the State Bonding
242 Commission may pledge, assign, or otherwise transfer any agency bonds, any monies payable
243 on or with respect to them, any legally available monies or other security administered by an
244 authorizing agency, or any combination of bonds, monies, or other security to provide for the
245 payment of revenue bonds issued under Section 63-65-8 and the payment of any amounts due
246 under agreements and contracts described in Subsection 63-65-8 (9).
247 (2) (a) Before issuing revenue bonds under Section 63-65-8 , the commission shall enter
248 into a [
249 (b) This agreement shall specify:
251 the [
253 agency or agencies for the agency bonds[
257 the [
259 authorizing agency from the proceeds of the revenue bonds, together with all amounts paid to
260 the authorizing agencies pursuant to Subsection 63-65-8 (10), shall be applied by the
261 authorizing agency as [
262 grant program of [
263 Section 7. Section 63-65-8 is amended to read:
264 63-65-8. Commission may authorize revenue bonds -- Contents of bond document
265 -- Special and reserve funds -- Limitation on liability -- Restoration of monies in reserve
266 funds -- Payment of bonds and other technical requirements -- Refunding -- Report to
267 Division of Finance.
268 (1) (a) In order to provide authorizing agencies with an alternative method of
269 liquidating agency bonds[
270 additional funds to further the purposes of authorizing agencies, the [
271 commission may authorize the issuance of revenue bonds from time to time [
275 (b) These revenue bonds shall be payable solely from a special fund established by the
276 state treasurer as provided in Subsection (4).
277 (c) Revenue bonds may be sold at public or private sale and may be issued in one or
278 more series.
279 (2) Revenue bonds may be authorized, issued, and sold by the [
280 commission on behalf of the state at a time or times and in a manner set forth in a [
285 (a) the terms and conditions of sale, including price, whether at, below or above face
287 (b) interest rates, including a variable rate;
288 (c) authorized denomination;
289 (d) maturity dates;
290 (e) form;
291 (f) manner of execution;
292 (g) manner of authentication;
293 (h) place and medium of payment;
294 (i) redemption terms;
295 (j) authorized signatures of public officials; and
296 (k) other provisions and details considered necessary or appropriate.
300 (3) To the extent set forth in the resolution, the proceeds of revenue bonds may be used
301 for the purposes set forth in Subsection (1) and to:
302 (a) provide for any necessary or desirable reserve fund as provided for in Subsection
303 (5); and
304 (b) pay fees, charges, and other amounts related to the issuance and sale of the revenue
306 (4) (a) As provided in the [
307 premium, if any, and interest on, any issue of revenue bonds is payable solely from and
308 secured by [
309 (i) the pledge and assignment [
310 including all amounts payable on or with respect to them, [
312 for in an agreement entered into under Subsection 63-65-7 (2);
313 (ii) amounts on deposit in the reserve fund, if any, established [
315 (iii) amounts available pursuant to any security device or credit enhancement device
316 that the [
317 marketability of the revenue bonds; and
318 (iv) other amounts available [
319 commission to secure payment of that issue of revenue bonds.
320 (b) [
321 funds or general credit of the state or its political subdivisions or agencies, but this limitation
322 does not limit or alter the obligations of political subdivisions on agency bonds in any manner.
323 (c) Revenue bonds do not constitute nor give rise to a general obligation or liability of,
324 or constitute a charge or lien against, the general credit or taxing power of the state or its
325 political subdivisions or agencies, including any authorizing agency.
326 (d) Revenue bonds shall contain on their face a statement that:
327 (i) [
328 the sources set forth in this Subsection (4) and specified in the [
329 bond document with respect to the revenue bonds;
330 (ii) neither the state nor any political subdivision of the state is obligated to pay the
331 revenue bonds; and
332 (iii) neither the faith and credit nor the taxing power of the state or any of its political
333 subdivisions is pledged to the payment of principal or redemption price of, or premium, if any,
334 or interest on the revenue bonds.
335 (e) Revenue bonds do not constitute debt of the state within the meaning of Utah
336 Constitution Article XIII, Sec. [
337 (5) (a) The [
338 any issue of revenue bonds.
339 (b) If a reserve fund is established, the [
340 bond document relating to that issue of revenue bonds is issued shall specify:
341 (i) the minimum amount that is required to be on deposit in the reserve fund;
342 (ii) the amount of sale proceeds from the sale of that issue of revenue bonds that shall
343 be deposited in the reserve fund; and
344 (iii) the manner in which any deficiency in the reserve fund shall be replenished.
346 certify to the governor and the director of the Division of Finance the amount [
347 any, that may be required to restore all reserve funds established to the minimum amount
348 specified by the state treasurer with respect to each reserve fund.
349 (ii) The governor may request an appropriation from the Legislature [
351 to the specified minimum amount.
352 (6) (a) (i) The [
353 that any signature of a public official authorized to sign revenue bonds may be by the facsimile
354 signature of [
355 revenue bonds.
356 (ii) If all signatures of public officials on the revenue bonds are facsimile signatures,
357 the [
358 bonds by or on behalf of a designated authenticating agent.
359 (iii) If an official ceases to hold office before delivery of the revenue bonds signed by
361 sufficient for all purposes.
362 (b) A facsimile of the seal of the state [
363 or otherwise placed on the revenue bonds.
364 (7) (a) The [
365 the replacement of lost, destroyed, stolen, or mutilated revenue bonds or for the exchange of
366 revenue bonds after issuance for revenue bonds of smaller or larger denominations.
367 (b) Revenue bonds in changed denominations shall:
368 (i) be exchanged for the original revenue bonds in the aggregate principal amounts and
369 in a manner that prevents the duplication of interest; and
370 (ii) bear interest at the same rate, be of the same series, mature on the same date, and
371 be as nearly as practicable in the same form as the original revenue bonds.
372 (8) (a) (i) Revenue bonds may be registered as to both principal and interest or may be
373 in a book entry form under which the right to principal and interest may be transferred only
374 through a book entry.
375 (ii) The [
377 within or outside the state, for:
383 (b) The records of ownership, registration, transfer, and exchange of the revenue
384 bonds, and of persons to whom payment with respect to them is made, are classified as private
385 or protected as defined in Title 63, Chapter 2, Government Records Access and Management
387 (c) The revenue bonds and any evidences of participation interests in the revenue bonds
388 may be issued, executed, authenticated, registered, transferred, exchanged, and otherwise made
389 to comply with Title 15, Chapter 7, Registered Public Obligations Act, or any other act of the
390 Legislature relating to the registration of obligations enacted to meet the requirements of
391 Section 149 (a), Internal Revenue Code of 1986, or any comparable predecessor or successor
392 provision, and applicable regulations.
394 (9) (a) The commission may authorize the execution and delivery of whatever
395 agreements and contracts [
396 appropriate in connection with the issuance of revenue bonds.
397 (b) These agreements and contracts may include agreements and contracts with
398 financial and other institutions for financial advisory services, trustee services, insurance,
399 letters of credit, reimbursement agreements, tender agreements, put agreements, repurchase
400 agreements, and indexing and tender agent agreements to:
403 entered into by [
408 agreement, obligation, or contract entered into in connection with them, including payment of
409 fees, charges, or other amounts coming due under agreements entered into with financial or
410 other institutions [
411 (10) When all revenue bonds of an issue have been paid, or provision for their payment
412 has been made, there shall be transferred to the appropriate authorizing agency or agencies, in
413 the amounts and in the manner that the [
414 equitable, and to the extent not required to secure payment of the revenue bonds and related
415 fees, charges, and other amounts:
416 (a) all amounts remaining on deposit in any reserve fund established with respect to the
417 issue of revenue bonds; and
418 (b) all other amounts and all agency bonds held by the [
419 any trustee and pledged to the payment of the revenue bonds.
420 (11) (a) The state treasurer or the commission may create any funds and accounts
421 necessary to carry out the purposes of this section.
422 (b) (i) The state treasurer shall administer and maintain those funds and accounts.
423 (ii) The state treasurer may invest all [
424 accounts in accordance with Title 51, Chapter 7, State Money Management Act [
425 in accordance with the [
426 on behalf of the state [
427 (iii) The commission may not approve the bond document or other agreement with
428 respect to the investment and application of these [
429 has affirmatively approved any investment provisions contained in the bond document or other
431 (c) All income from the [
432 this Subsection (11) shall accrue to the benefit of the fund or account and shall be used for the
433 purpose [
434 (12) (a) The [
435 refunding revenue bonds of the state in accordance with Title 11, Chapter 27, Utah Refunding
436 Bond Act, for the purpose of refunding any revenue bonds.
437 (b) The state is considered a "public body" and the [
438 "governing body" for purposes of that act.
439 (13) (a) [
440 be issued under this section until [
441 conditions precedent to the issuance of the revenue bond have been satisfied.
442 (b) A recital on any revenue bond of a finding and certification conclusively establishes
443 the completion and satisfaction of all conditions of this section.
444 (14) Revenue bonds, interest paid on revenue bonds, and any income from revenue
445 bonds is not taxable within this state for any purpose, except for the corporate franchise tax.
446 (15) (a) Revenue bonds are legal investments for all state trust funds, insurance
447 companies, banks, trust companies, and the State School Fund.
448 (b) Revenue bonds may also be used as collateral to secure legal obligations.
449 (16) Immediately upon the issuance of each issue of revenue bonds, [
451 (a) the aggregate principal amount of revenue bonds issued;
452 (b) the amount of proceeds of sale of revenue bonds received by the state [
453 (c) the [
454 agency bonds;
455 (d) the total amount of all fees and expenses relating to the issuance of the revenue
457 (e) the amount of sale proceeds of the revenue bonds used to pay fees and expenses;
459 (f) the amount of sale proceeds of the revenue bonds deposited in the reserve fund
460 established with respect to the issue of revenue bonds, if any.
461 Section 8. Section 63-65-8.1 is enacted to read:
462 63-65-8.1. Tax status -- Exemption.
463 The revenue bonds issued under this chapter, any interest paid on the revenue bonds,
464 and any income from the bonds is not taxable in Utah for any purpose, except for the corporate
465 franchise tax.
466 Section 9. Section 63-65-8.2 is enacted to read:
467 63-65-8.2. Publication of resolution or notice -- Limitation on actions to contest
469 (1) The commission may either:
470 (a) publish once in a newspaper having general circulation in Utah any resolution
471 adopted by it; or
472 (b) in lieu of publishing the entire resolution, publish a notice of revenue bonds to be
473 issued, titled as such, containing:
474 (i) the purpose of the revenue bond issue;
475 (ii) the maximum principal amount that may be issued;
476 (iii) the maximum number of years over which the revenue bonds may mature;
477 (iv) the maximum interest rate that the revenue bonds may bear, if any;
478 (v) the maximum discount from par, expressed as a percentage of principal amount, at
479 which the revenue bonds may be sold; and
480 (vi) that a copy of the resolution or other bond document may be examined at the office
481 of the state treasurer during regular business hours for at least 30 days after the publication of
482 the notice.
483 (2) For 30 days after the date of publication, any interested person may contest:
484 (a) the legality of the resolution or other bond document;
485 (b) any of the revenue bonds authorized under it; or
486 (c) any of the provisions made for the repayment of the revenue bonds.
487 (3) After 30 days, a person may not, for any cause, contest:
488 (a) the legality of the resolution or other bond document;
489 (b) any of the revenue bonds authorized under the resolution or other bond document;
491 (c) any of the provisions made for the security and repayment of the revenue bonds.
492 Section 10. Section 63-65-9 is amended to read:
493 63-65-9. Payment of expenses.
494 (1) All expenses incurred by the state [
495 (a) in the case of expenses incurred under Section 63-65-6 , from the proceeds of [
496 the liquidation of agency bonds; and
497 (b) in the case of expenses incurred under Section [
498 proceeds of sale of revenue bonds [
499 (2) [
500 that are not paid [
501 issuance of state revenue bonds shall be [
502 revolving funds of the authorizing agencies [
504 (b) These expenses are not a charge to or an appropriation from the General Fund.
Legislative Review Note
as of 2-13-03 3:25 PM
A limited legal review of this legislation raises no obvious constitutional or statutory concerns.
Office of Legislative Research and General Counsel
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