Download Zipped Introduced WordPerfect SB0298S02.ZIP
[Status][Bill Documents][Fiscal Note][Bills Directory]

Second Substitute S.B. 298

Representative David Clark proposes the following substitute bill:




Chief Sponsor: John W. Hickman

House Sponsor: David Clark

             7      LONG TITLE
             8      General Description:
             9          This bill authorizes the Board of Business and Economic Development to purchase
             10      contracts for the sale of land under certain circumstances and authorizes the issuance of
             11      general obligation bonds to fund certain contract purchases.
             12      Highlighted Provisions:
             13          This bill:
             14          .    authorizes the Board of Business and Economic Development and the state treasurer
             15      to purchase contracts for the sale of land;
             16          .    requires the board and the state treasurer to obtain an evaluation of the purchaser of
             17      the land before buying the contract;
             18          .    establishes criteria that should be evaluated as part of the evaluation;
             19          .    directs the board and state treasurer to consider certain issues and determine
             20      whether or not to purchase the contract;
             21          .    prohibits the board and the state treasurer from purchasing a contract if the last
             22      payment due under the contract is more than seven years from the date that the
             23      board buys the contract;
             24          .    authorizes the State Bonding Commission to issue up to $42,500,000 in general
             25      obligation bonds with the proceeds given to the Governor's Office of Economic

             26      Development to purchase land sale contracts; and
             27          .    amends the Master Bond Act to allow issuance of general obligation bonds for the
             28      purchase of land sale contracts or interests in land sale contracts.
             29      Monies Appropriated in this Bill:
             30          None
             31      Other Special Clauses:
             32          None
             33      Utah Code Sections Affected:
             34      AMENDS:
             35          63-38f-303, as last amended by Laws of Utah 2006, Chapter 52
             36          63B-1a-101, as last amended by Laws of Utah 2003, First Special Session, Chapter 1
             37      ENACTS:
             38          63B-17-102, Utah Code Annotated 1953
             40      Be it enacted by the Legislature of the state of Utah:
             41          Section 1. Section 63-38f-303 is amended to read:
             42           63-38f-303. Board duties and powers.
             43          (1) The board shall:
             44          (a) promote and encourage the economic, commercial, financial, industrial,
             45      agricultural, and civic welfare of the state;
             46          (b) do all lawful acts for the development, attraction, and retention of businesses,
             47      industries, and commerce within the state;
             48          (c) promote and encourage the expansion and retention of businesses, industries, and
             49      commerce located in the state;
             50          (d) support the efforts of local government and regional nonprofit economic
             51      development organizations to encourage expansion or retention of businesses, industries, and
             52      commerce located in the state;
             53          (e) do other acts not specifically enumerated in this chapter, if the acts are for the
             54      betterment of the economy of the state;
             55          (f) work in conjunction with companies and individuals located or doing business
             56      within the state to secure favorable rates, fares, tolls, charges, and classification for

             57      transportation of persons or property by:
             58          (i) railroad;
             59          (ii) motor carrier; or
             60          (iii) other common carriers;
             61          (g) recommend policies, priorities, and objectives to the office regarding the assistance,
             62      retention, or recruitment of business, industries, and commerce in the state; and
             63          (h) recommend how any money or program administered by the office or its divisions
             64      for the assistance, retention, or recruitment of businesses, industries, and commerce in the state
             65      shall be administered, so that the money or program is equitably available to all areas of the
             66      state unless federal or state law requires or authorizes the geographic location of a recipient of
             67      the money or program to be considered in the distribution of the money or administration of the
             68      program.
             69          (2) The board may:
             70          (a) in furtherance of the authority granted under Subsection (1)(f), appear as a party
             71      litigant on behalf of individuals or companies located or doing business within the state in
             72      proceedings before regulatory commissions of the state, other states, or the federal government
             73      having jurisdiction over such matters; and
             74          (b) make, amend, or repeal rules for the conduct of its business consistent with this part
             75      and in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act.
             76          (3) (a) Subject to Subsection (3)(b), when monies are appropriated or otherwise made
             77      available to the office by the Legislature for the purchase of a contract for the sale of land, the
             78      board, with the approval of the state treasurer, may purchase the contract if the board makes a
             79      finding that the purchase of the contract promotes a statewide public interest such as promoting
             80      ease of interstate or intrastate travel or advancing economic development.
             81          (b) (i) As used in this Subsection (3)(b), "net projected debt service cost" means the
             82      monies projected to be necessary to pay bond issuance costs for a general obligation bond and
             83      to make any interest payments for that general obligation bond less the projected investment
             84      earnings from the state's investment of that bond's proceeds, if any.
             85          (ii) When some or all of the monies made available by the Legislature to purchase a
             86      contract for the sale of land are provided from the proceeds from the issuance of one or more
             87      general obligation bonds, if the board and state treasurer decide to purchase the contract, the

             88      board and state treasurer shall purchase the contract at a price discounted by an amount equal to
             89      the total net projected debt service cost for those bonds.
             90          (iii) The State Bonding Commission shall certify the total net projected debt service
             91      cost to the board and the state treasurer.
             92          (iv) In purchasing a contract, the board and state treasurer may:
             93          (A) purchase the contract with a single payment; or
             94          (B) arrange to have the contract placed in escrow pending the final payment on the
             95      contract and make multiple payments on the contract according to a schedule that is negotiated
             96      with the holder of the contract and included as part of the contract.
             97          (c) Before purchasing a contract, the board and the state treasurer shall:
             98          (i) contract with a qualified person or entity to prepare a report evaluating the
             99      purchaser of the land;
             100          (ii) ensure that the report evaluates:
             101          (A) the purchaser's financial ability to pay the money to complete the purchase on the
             102      date that the final payment is due under the contract;
             103          (B) whether or not the security underlying the contract is adequate to protect the state if
             104      the purchaser defaults;
             105          (C) the purchaser's balance sheet and general credit-worthiness;
             106          (D) environmental issues affecting the property under federal or state law; and
             107          (E) any other items that will assist the board and the state treasurer in determining
             108      whether or not to purchase the contract;
             109          (iii) ensure that the state has or will have a properly perfected security interest in, title
             110      to, or a deed in escrow for, the property that is the subject of the purchase; and
             111          (iv) after reviewing the report, evaluating the state's security in case of a default on the
             112      contract, and considering the terms of the proposed contract, determine whether or not to
             113      purchase the contract.
             114          (d) The board and the state treasurer may not purchase a contract under this Subsection
             115      (3) if the date of the last payment owed by the land purchaser under the contract is more than
             116      seven years from the date that the board purchases the contract.
             117          Section 2. Section 63B-1a-101 is amended to read:
             118           63B-1a-101. Definitions -- Bonds authorized -- Prohibitions -- Purposes --

             119      Maturity -- Use of bonds proceeds.
             120          (1) As used in this section:
             121          (a) "Cost" includes:
             122          (i) all costs related to the authorized capital project, including the cost of equipment
             123      and furnishings for, interests in, or improvements necessary, incidental, or convenient to, those
             124      capital projects;
             125          (ii) all costs incident to the authorization and issuance of bonds;
             126          (iii) interest estimated to accrue on bonds during the period to be covered by the
             127      acquisition and construction of the capital project and for up to 12 months after that period; and
             128          (iv) other amounts that the commission finds necessary to establish reserve funds and
             129      to provide working capital related to the capital project.
             130          (b) "Taxable property of the state" includes all real and personal property subject to ad
             131      valorem taxation within the state, including all property subject to a fee-in lieu of tax.
             132          (2) When authorized by the Legislature, the commission may, in the manner specified
             133      in this chapter, issue bonds to provide funds to the state for the purpose of paying all or part of
             134      the cost of:
             135          (a) designing, acquiring, constructing, improving, or extending:
             136          [(a)] (i) any one or more capital projects; or
             137          [(b)] (ii) any interest in one or more or any combination of capital projects; or
             138          (b) purchasing a land sale contract, or an interest in a land sale contract, under Section
             139      63-38f-303 .
             140          (3) Before issuing any bonds, the commission shall determine that the Legislature has:
             141          (a) affirmatively authorized the issuance of the bonds; and
             142          (b) has specified:
             143          (i) for capital projects, the capital projects to be funded; and
             144          (ii) the maximum amount of the bonds.
             145          (4) The commission shall either:
             146          (a) comply with any maturity requirements established by the Legislature; or
             147          (b) in the absence of any maturity requirements, establish, by resolution, a bond
             148      maturity date or dates that are not later than 15 years after the date of delivery of the bonds.
             149          (5) (a) The commission may not issue bonds under this chapter in an amount that

             150      violates the limitation described in the Utah Constitution Article XIV, Section 1 or payable
             151      beyond the period described in the Utah Constitution Article XIII, Section 5(3).
             152          (b) For purposes of applying the debt limitation contained in the Utah Constitution
             153      Article XIV, Section 1, the value of the taxable property in Utah is considered to be 100% of
             154      the fair market value of the taxable property of the state as computed from the last assessment
             155      for state purposes made before the issuance of the bonds.
             156          Section 3. Section 63B-17-102 is enacted to read:
             157          63B-17-102. Bonds to purchase land sale contract -- Maximum amount --
             158      Purchases authorized.
             159          (1) The total amount of bonds issued under this section may not exceed $42,500,000.
             160          (2) (a) Proceeds from the issuance of bonds shall be provided to the Governor's Office
             161      of Economic Development to provide funds to pay all or part of the cost of purchasing
             162      contracts for the sale of land if the purchase promotes a statewide public purpose such as
             163      promoting ease of interstate or intrastate travel or advancing economic development.
             164          (b) These costs may include the cost of all related financial analysis and legal fees.
             165          (3) The commission, by resolution and in consultation with the Governor's Office of
             166      Economic Development, may decline to issue the bonds authorized by this section if issuance
             167      of the bonds for the purpose authorized in this section could be construed to violate state law or
             168      federal law or regulation.

[Bill Documents][Bills Directory]