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First Substitute S.B. 193

Senator Curtis S. Bramble proposes the following substitute bill:


             1     
LOCAL GOVERNMENT BONDING ACT AMENDMENTS

             2     
2012 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: Curtis S. Bramble

             5     
House Sponsor: Patrick Painter

             6     
             7      LONG TITLE
             8      General Description:
             9          This bill amends the Local Government Bonding Act by providing that the 10-year
             10      period during which voter authorized bonds may be issued tolls during a period of time
             11      when the bonds are prevented from being issued due to pending litigation or other
             12      challenges.
             13      Highlighted Provisions:
             14          This bill:
             15          .    provides that the 10-year period during which voter authorized bonds may be issued
             16      is tolled when the bonds are challenged due to pending litigation or other
             17      challenges;
             18          .    provides that if, when the tolling period described in the preceding paragraph ends,
             19      the period of time remaining to issue the bonds is less than one year, the period of
             20      time remaining to issue the bonds shall be extended to one year;
             21          .    provides that the tolling provisions described in this bill apply to bonds that were
             22      approved by voters on or after May 8, 2002; and
             23          .    makes technical changes.
             24      Money Appropriated in this Bill:
             25          None


             26      Other Special Clauses:
             27          None
             28      Utah Code Sections Affected:
             29      AMENDS:
             30          11-14-301, as last amended by Laws of Utah 2007, Chapter 329
             31          11-14-311, as last amended by Laws of Utah 2006, Chapter 83
             32     
             33      Be it enacted by the Legislature of the state of Utah:
             34          Section 1. Section 11-14-301 is amended to read:
             35           11-14-301. Issuance of bonds by governing body -- Computation of indebtedness
             36      under constitutional and statutory limitations.
             37          (1) If the governing body has declared the bond proposition to have carried and no
             38      contest has been filed, or if a contest has been filed and favorably terminated, the governing
             39      body may proceed to issue the bonds voted at the election.
             40          (2) (a) It is not necessary that all of the bonds be issued at one time, but, except as
             41      otherwise provided in this Subsection (2), bonds approved by the voters may not be issued
             42      more than 10 years after the [date of] day on which the election is held.
             43          (b) The 10-year period described in Subsection (2)(a) is tolled if, at any time during the
             44      10-year period:
             45          (i) an application for a referendum petition is filed with a local clerk, in accordance
             46      with Section 20A-7-602 and Subsection 20A-7-601 (4)(a), with respect to the local obligation
             47      law relating to the bonds; or
             48          (ii) the bonds are challenged in a court of law or an administrative proceeding in
             49      relation to:
             50          (A) the legality or validity of the bonds, or the election or proceedings authorizing the
             51      bonds;
             52          (B) the authority of the local political subdivision to issue the bonds;
             53          (C) the provisions made for the security or payment of the bonds; or
             54          (D) any other issue that materially and adversely affects the marketability of the bonds,
             55      as determined by the individual or body that holds the executive powers of the local political
             56      subdivision.


             57          (c) A tolling period described in Subsection (2)(b)(i) ends on the later of the day on
             58      which:
             59          (i) the local clerk determines that the petition is insufficient, in accordance with
             60      Subsection 20A-7-607 (2)(c), unless an application, described in Subsection 20A-7-607 (4)(a), is
             61      made to the Supreme Court;
             62          (ii) the Supreme Court determines, under Subsection 20A-7-607 (4)(c), that the petition
             63      for the referendum is not legally sufficient; or
             64          (iii) for a referendum petition that is sufficient, the governing body declares, as
             65      provided by law, the results of the referendum election on the local obligation law.
             66          (d) A tolling period described in Subsection (2)(b)(ii) ends after:
             67          (i) there is a final settlement, a final adjudication, or another type of final resolution of
             68      all challenges described in Subsection (2)(b)(ii); and
             69          (ii) the individual or body that holds the executive powers of the local political
             70      subdivision issues a document indicating that all challenges described in Subsection (2)(b)(ii)
             71      are resolved and final.
             72          (e) If the 10-year period described in Subsection (2)(a) is tolled under this Subsection
             73      (2) and, when the tolling ends and after giving effect to the tolling, the period of time
             74      remaining to issue the bonds is less than one year, the period of time remaining to issue the
             75      bonds shall be extended to one year.
             76          (f) The tolling provisions described in this Subsection (2) apply to all bonds described
             77      in this section that were approved by voters on or after May 8, 2002.
             78          (3) (a) Bonds approved by the voters may not be issued to an amount that will cause
             79      the indebtedness of the local political subdivision to exceed that permitted by the Utah
             80      Constitution or statutes.
             81          (b) In computing the amount of indebtedness that may be incurred pursuant to
             82      constitutional and statutory limitations, the constitutionally or statutorily permitted percentage,
             83      as the case may be, shall be applied to the fair market value, as defined under Section 59-2-102 ,
             84      of the taxable property in the local political subdivision, as computed from the last applicable
             85      equalized assessment roll before the incurring of the additional indebtedness.
             86          (c) In determining the fair market value of the taxable property in the local political
             87      subdivision as provided in this section, the value of all tax equivalent property, as defined in


             88      Section 59-3-102 , shall be included as a part of the total fair market value of taxable property
             89      in the local political subdivision, as provided in Title 59, Chapter 3, Tax Equivalent Property
             90      Act.
             91          (4) Bonds of improvement districts issued in a manner that they are payable solely
             92      from the revenues to be derived from the operation of the facilities of the district may not be
             93      included as bonded indebtedness for the purposes of the computation.
             94          (5) Where bonds are issued by a city, town, or county payable solely from revenues
             95      derived from the operation of revenue-producing facilities of the city, town, or county, or
             96      payable solely from a special fund into which are deposited excise taxes levied and collected by
             97      the city, town, or county, or excise taxes levied by the state and rebated pursuant to law to the
             98      city, town, or county, or any combination of those excise taxes, the bonds shall be included as
             99      bonded indebtedness of the city, town, or county only to the extent required by the Utah
             100      Constitution, and any bonds not so required to be included as bonded indebtedness of the city,
             101      town, or county need not be authorized at an election, except as otherwise provided by the Utah
             102      Constitution, the bonds being hereby expressly excluded from the election requirement of
             103      Section 11-14-201 .
             104          (6) A bond election is not void when the amount of bonds authorized at the election
             105      exceeded the limitation applicable to the local political subdivision at the time of holding the
             106      election, but the bonds may be issued from time to time in an amount within the applicable
             107      limitation at the time the bonds are issued.
             108          Section 2. Section 11-14-311 is amended to read:
             109           11-14-311. Bond anticipation notes.
             110          (1) (a) If the governing body considers it advisable and in the interests of the local
             111      political subdivision to anticipate the issuance of bonds to be issued under this chapter, the
             112      governing body may, pursuant to appropriate resolution, issue bond anticipation notes.
             113          (b) Each resolution authorizing the issuance of bond anticipation notes shall:
             114          (i) describe the bonds in anticipation of which the notes are to be issued;
             115          (ii) specify the principal amount of the notes and the maturity dates of the notes; and
             116          (iii) specify either the rates of interest, if any, on the notes or the method by which
             117      interest on the notes may be determined while the notes are outstanding.
             118          (c) If the resolution specifies a method by which the interest rates on the notes may be


             119      determined, the resolution may specify the maximum rate of interest which the notes may bear.
             120          (2) Bond anticipation notes shall be issued and sold in a manner and at a price, either
             121      at, below, or above face value, as the governing body determines by resolution. Interest on
             122      bond anticipation notes may be made payable semiannually, annually, or at maturity. Bond
             123      anticipation notes may be made redeemable prior to maturity at the option of the governing
             124      body in the manner and upon the terms fixed by the resolution authorizing their issuance.
             125      Bond anticipation notes shall be executed and shall be in a form and have details and terms as
             126      provided in the authorizing resolution.
             127          (3) Contemporaneously with the issuance of the bonds in anticipation of which bond
             128      anticipation notes are issued, provision shall be made for the retirement of any outstanding
             129      bond anticipation notes.
             130          (4) Whenever the bonds in anticipation of which notes are issued are to be payable
             131      from ad valorem taxes and constitute full general obligations of the local political subdivision,
             132      the bond anticipation notes and the interest on them shall be secured by a pledge of the full
             133      faith and credit of the local political subdivision in the manner provided in Section 11-14-310
             134      and shall also be made payable from funds derived from the sale of the bonds in anticipation of
             135      which the notes are issued. Whenever the bonds in anticipation of which the notes are to be
             136      issued are to be payable solely from revenues derived from the operation of revenue-producing
             137      facilities, these bond anticipation notes and the interest on them shall be secured by a pledge of
             138      the income and revenues derived by the local political subdivision from the revenue-producing
             139      facilities and shall also be made payable from funds derived from the sale of the bonds in
             140      anticipation of which the notes are issued.
             141          (5) Bond anticipation notes issued under this section may be refunded by the issuance
             142      of other bond anticipation notes issued under this section.
             143          (6) Sections 11-14-304 , 11-14-305 , 11-14-315 , 11-14-316 , and 11-14-401 apply to all
             144      bond anticipation notes issued under this section.
             145          (7) Bonds are not considered to have been issued [more than 10 years after the date of
             146      the election authorizing the issuance of them, under] outside of the 10-year period described in
             147      Section 11-14-301 , if the issuance of [these] the bonds [has been] is anticipated under this
             148      section by bond anticipation notes issued [prior to] before the expiration of [this ten-year] the
             149      10-year period.


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