S.B. 9






Chief Sponsor: Wayne A. Harper

House Sponsor: Gage Froerer

             8      LONG TITLE
             9      General Description:
             10          This bill repeals the authorization for the Board of Business and Economic
             11      Development and the state treasurer to purchase contracts for the sale of land and
             12      repeals a general obligation bond authorization to fund certain contract purchases.
             13      Highlighted Provisions:
             14          This bill:
             15          .    repeals provisions authorizing the Board of Business and Economic Development
             16      and the state treasurer to purchase contracts for the sale of land;
             17          .    repeals provisions governing requirements for the purchase of contracts for the sales
             18      of land;
             19          .    repeals a $42,500,000 general obligation bond authorization that:
             20              .    was to be used by the Governor's Office of Economic Development to provide
             21      funds to pay all or part of the cost of purchasing contracts for the sale of land if
             22      the purchase promotes a statewide public purpose such as promoting ease of
             23      interstate or intrastate travel or advancing economic development; and
             24              .    has not been issued;
             25          .    repeals a Master Bond Act provision allowing issuance of general obligation bonds
             26      for the purchase of land sale contracts or interests in land sale contracts; and
             27          .    makes technical and conforming changes.

             28      Money Appropriated in this Bill:
             29          None
             30      Other Special Clauses:
             31          None
             32      Utah Code Sections Affected:
             33      AMENDS:
             34           63B-1a-101 , as last amended by Laws of Utah 2008, Chapter 378
             35           63M-1-303 , as last amended by Laws of Utah 2013, Chapter 392
             36      REPEALS:
             37           63B-17-102 , as enacted by Laws of Utah 2008, Chapter 378
             39      Be it enacted by the Legislature of the state of Utah:
             40          Section 1. Section 63B-1a-101 is amended to read:
             41           63B-1a-101. Definitions -- Bonds authorized -- Prohibitions -- Purposes --
             42      Maturity -- Use of bonds proceeds.
             43          (1) As used in this section:
             44          (a) "Cost" includes:
             45          (i) all costs related to the authorized capital project, including the cost of equipment
             46      and furnishings for, interests in, or improvements necessary, incidental, or convenient to, those
             47      capital projects;
             48          (ii) all costs incident to the authorization and issuance of bonds;
             49          (iii) interest estimated to accrue on bonds during the period to be covered by the
             50      acquisition and construction of the capital project and for up to 12 months after that period; and
             51          (iv) other amounts that the commission finds necessary to establish reserve funds and
             52      to provide working capital related to the capital project.
             53          (b) "Taxable property of the state" includes all real and personal property subject to ad
             54      valorem taxation within the state, including all property subject to a fee-in lieu of tax.
             55          (2) When authorized by the Legislature, the commission may, in the manner specified
             56      in this chapter, issue bonds to provide funds to the state for the purpose of paying all or part of
             57      the cost of[: (a)] designing, acquiring, constructing, improving, or extending:
             58          [(i)] (a) any one or more capital projects; or

             59          [(ii)] (b) any interest in one or more or any combination of capital projects[; or].
             60          [(b) purchasing a land sale contract, or an interest in a land sale contract, under Section
             61      63M-1-303 .]
             62          (3) Before issuing any bonds, the commission shall determine that the Legislature has:
             63          (a) affirmatively authorized the issuance of the bonds; and
             64          (b) has specified:
             65          (i) for capital projects, the capital projects to be funded; and
             66          (ii) the maximum amount of the bonds.
             67          (4) The commission shall either:
             68          (a) comply with any maturity requirements established by the Legislature; or
             69          (b) in the absence of any maturity requirements, establish, by resolution, a bond
             70      maturity date or dates that are not later than 15 years after the date of delivery of the bonds.
             71          (5) (a) The commission may not issue bonds under this chapter in an amount that
             72      violates the limitation described in the Utah Constitution, Article XIV, Section 1 or payable
             73      beyond the period described in the Utah Constitution, Article XIII, Section 5(3).
             74          (b) For purposes of applying the debt limitation contained in the Utah Constitution
             75      Article XIV, Section 1, the value of the taxable property in Utah is considered to be 100% of
             76      the fair market value of the taxable property of the state as computed from the last assessment
             77      for state purposes made before the issuance of the bonds.
             78          Section 2. Section 63M-1-303 is amended to read:
             79           63M-1-303. Board duties and powers.
             80          (1) The board shall:
             81          (a) promote and encourage the economic, commercial, financial, industrial,
             82      agricultural, and civic welfare of the state;
             83          (b) do all lawful acts for the development, attraction, and retention of businesses,
             84      industries, and commerce within the state;
             85          (c) promote and encourage the expansion and retention of businesses, industries, and
             86      commerce located in the state;
             87          (d) support the efforts of local government and regional nonprofit economic
             88      development organizations to encourage expansion or retention of businesses, industries, and
             89      commerce located in the state;

             90          (e) do other acts not specifically enumerated in this chapter, if the acts are for the
             91      betterment of the economy of the state;
             92          (f) work in conjunction with companies and individuals located or doing business
             93      within the state to secure favorable rates, fares, tolls, charges, and classification for
             94      transportation of persons or property by:
             95          (i) railroad;
             96          (ii) motor carrier; or
             97          (iii) other common carriers;
             98          (g) recommend policies, priorities, and objectives to the office regarding the assistance,
             99      retention, or recruitment of business, industries, and commerce in the state;
             100          (h) recommend how any money or program administered by the office or its divisions
             101      for the assistance, retention, or recruitment of businesses, industries, and commerce in the state
             102      shall be administered, so that the money or program is equitably available to all areas of the
             103      state unless federal or state law requires or authorizes the geographic location of a recipient of
             104      the money or program to be considered in the distribution of the money or administration of the
             105      program; and
             106          (i) maintain ethical and conflict of interest standards consistent with those imposed on
             107      a public officer under Title 67, Chapter 16, Utah Public Officers' and Employees' Ethics Act.
             108          (2) The board may:
             109          (a) in furtherance of the authority granted under Subsection (1)(f), appear as a party
             110      litigant on behalf of individuals or companies located or doing business within the state in
             111      proceedings before regulatory commissions of the state, other states, or the federal government
             112      having jurisdiction over such matters; and
             113          (b) make, amend, or repeal rules for the conduct of its business consistent with this part
             114      and in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
             115          [(3) (a) Subject to Subsection (3)(b), when money is appropriated or otherwise made
             116      available to the office by the Legislature for the purchase of a contract for the sale of land, the
             117      board, with the approval of the state treasurer, may purchase the contract if the board makes a
             118      finding that the purchase of the contract promotes a statewide public interest such as promoting
             119      ease of interstate or intrastate travel or advancing economic development.]
             120          [(b) (i) As used in this Subsection (3)(b), "net projected debt service cost" means the

             121      money projected to be necessary to pay bond issuance costs for a general obligation bond and
             122      to make any interest payments for that general obligation bond less the projected investment
             123      earnings from the state's investment of that bond's proceeds, if any.]
             124          [(ii) When some or all of the money made available by the Legislature to purchase a
             125      contract for the sale of land is provided from the proceeds from the issuance of one or more
             126      general obligation bonds, if the board and state treasurer decide to purchase the contract, the
             127      board and state treasurer shall purchase the contract at a price discounted by an amount equal to
             128      the total net projected debt service cost for those bonds.]
             129          [(iii) The State Bonding Commission shall certify the total net projected debt service
             130      cost to the board and the state treasurer.]
             131          [(iv) In purchasing a contract, the board and state treasurer may:]
             132          [(A) purchase the contract with a single payment; or]
             133          [(B) arrange to have the contract placed in escrow pending the final payment on the
             134      contract and make multiple payments on the contract according to a schedule that is negotiated
             135      with the holder of the contract and included as part of the contract.]
             136          [(c) Before purchasing a contract, the board and the state treasurer shall:]
             137          [(i) contract with a qualified person or entity to prepare a report evaluating the
             138      purchaser of the land;]
             139          [(ii) ensure that the report evaluates:]
             140          [(A) the purchaser's financial ability to pay the money to complete the purchase on the
             141      date that the final payment is due under the contract;]
             142          [(B) whether or not the security underlying the contract is adequate to protect the state
             143      if the purchaser defaults;]
             144          [(C) the purchaser's balance sheet and general credit-worthiness;]
             145          [(D) environmental issues affecting the property under federal or state law; and]
             146          [(E) any other items that will assist the board and the state treasurer in determining
             147      whether or not to purchase the contract;]
             148          [(iii) ensure that the state has or will have a properly perfected security interest in, title
             149      to, or a deed in escrow for, the property that is the subject of the purchase; and]
             150          [(iv) after reviewing the report, evaluating the state's security in case of a default on the
             151      contract, and considering the terms of the proposed contract, determine whether or not to

             152      purchase the contract.]
             153          [(d) The board and the state treasurer may not purchase a contract under this
             154      Subsection (3) if the date of the last payment owed by the land purchaser under the contract is
             155      more than seven years from the date that the board purchases the contract.]
             156          Section 3. Repealer.
             157          This bill repeals:
             158          Section 63B-17-102 , Bonds to purchase land sale contract -- Maximum amount --
             159      Purchases authorized.

Legislative Review Note
    as of 3-10-14 7:11 PM

Office of Legislative Research and General Counsel

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