First Substitute H.B. 176

Representative David Clark proposes the following substitute bill:

1 CERTAIN COUNTY DEBT FORGIVEN
2 2007 GENERAL SESSION
3 STATE OF UTAH
4 Chief Sponsor: David Clark
5 Senate Sponsor: John W. Hickman
6
7 LONG TITLE
8 General Description:
9 This bill forgives certain loans for disaster relief outstanding as of June 30, 2007.
10 Highlighted Provisions:
11 This bill:
12 . forgives loans issued for disaster relief that are outstanding on June 30, 2007; and
13 . makes technical and conforming changes.
14 Monies Appropriated in this Bill:
15 None
16 Other Special Clauses:
17 None
18 Utah Code Sections Affected:
19 AMENDS:
20 53-2-102.5, as last amended by Chapter 89, Laws of Utah 2006
21
22 Be it enacted by the Legislature of the state of Utah:
23 Section 1. Section 53-2-102.5 is amended to read:
24 53-2-102.5. Loan program for disasters.
25 (1) The director may make loans to local governments as provided in this section

26 when:
27 (a) the governor has issued a proclamation declaring a state of emergency because of a
28 natural disaster;
29 (b) the Legislature has appropriated monies to the division explicitly for that purpose;
30 and
31 (c) threats to the public health and safety, or damages to flood control systems or the
32 transportation infrastructure exist.
33 (2) (a) In order to qualify for loans under this section, the county and each political
34 subdivision within the county shall:
35 (i) pass a resolution that:
36 (A) requests a loan;
37 (B) identifies the loan amount that is requested; and
38 (C) describes, in as much detail as possible, how the entity will spend the loan
39 proceeds; and
40 (ii) complete the application for funds provided by the director.
41 (b) Each political subdivision other than the county shall submit a copy of its
42 resolution and application to the county legislative body.
43 (c) The county legislative body shall file with the director:
44 (i) a letter identifying the total loan amount sought by the county and its political
45 subdivisions; and
46 (ii) a copy of the county's resolution and application and a copy of the resolution and
47 application of each political subdivision seeking loan funds.
48 (3) (a) To the extent appropriated funds are available, the director shall prepare a
49 promissory note lending the county the total amount requested by the county for itself and its
50 political subdivisions.
51 (b) Except as required in Subsections (8) and (9), the director shall ensure that the
52 promissory note contains:
53 (i) a requirement that the principal on the note is due on the May 1 in the calendar year
54 two years after the year in which the note is signed;
55 (ii) terms that require repayment of the principal on the note be made to the General
56 Fund Budget Reserve Account established in Section 63-38-2.5 ; and

57 (iii) terms that limit the use of note proceeds to the repair and reconstruction of
58 infrastructures owned by local governments located within the county.
59 (c) After an authorized representative of the county signs the promissory note, the
60 director shall disburse the loan funds to the county.
61 (4) The county and any participating political subdivision may not use loan proceeds
62 for costs:
63 (a) that could have been paid from other available funding sources if the county or
64 participating political subdivision had applied for those funds; or
65 (b) to compensate private businesses or private persons for damages incurred in the
66 disaster by those private businesses or persons.
67 (5) After receiving the loan proceeds from the state, the county shall, before disbursing
68 loan proceeds to the other county political subdivisions, obtain signed promissory notes from
69 each participating political subdivision that include terms substantially similar to the terms
70 contained in the promissory note signed by the county.
71 (6) The county shall, on behalf of itself and any participating political subdivision, file
72 a report with the director every three months, that:
73 (a) specifies each project on which loan funds were expended, classified by the name
74 of the local entity that expended the funds; and
75 (b) identifies the amount expended for that project.
76 (7) If the county or one of its participating political subdivisions has not expended or
77 committed the funds by the date that the promissory note is due, the county or participating
78 political subdivision shall return the unused or uncommitted funds to the director for redeposit
79 into the fund.
80 (8) For each promissory note issued under this section that is unpaid on May 1, 2006,
81 the director shall issue a new promissory note to replace the existing promissory note:
82 (a) for the principal amount of the unpaid promissory note without accrued interest, if
83 any;
84 (b) due on or before June 30, 2007; and
85 (c) with no interest rate.
86 (9) The director shall ensure that each promissory note issued under this section that is
87 funded by monies appropriated and available for disaster loans as of January 1, 2006, are due

88 on or before June 30, 2007.
89 (10) Any amount on a promissory note issued under this section before April 30, 2007
90 that is unpaid as of June 30, 2007 is forgiven and need not be repaid.