S.B. 225

             1     

REPEAL OF BUSINESS DEVELOPMENT FOR

             2     
DISADVANTAGED RURAL COMMUNITIES ACCOUNT

             3     
2014 GENERAL SESSION

             4     
STATE OF UTAH

             5     
Chief Sponsor: Lyle W. Hillyard

             6     
House Sponsor: Melvin R. Brown

             7     
             8      LONG TITLE
             9      General Description:
             10          This bill modifies the Business Development for Disadvantaged Rural Communities
             11      Act by repealing the Business Development for Disadvantaged Rural Communities
             12      Restricted Account.
             13      Highlighted Provisions:
             14          This bill:
             15          .    repeals the Business Development for Disadvantaged Rural Communities Restricted
             16      Account in the General Fund; and
             17          .    makes technical changes.
             18      Money Appropriated in this Bill:
             19          None
             20      Other Special Clauses:
             21          None
             22      Utah Code Sections Affected:
             23      AMENDS:
             24           63B-1b-202 , as last amended by Laws of Utah 2013, Chapter 227
             25           63M-1-2002 , as renumbered and amended by Laws of Utah 2008, Chapter 382
             26           63M-1-2004 , as renumbered and amended by Laws of Utah 2008, Chapter 382
             27      REPEALS:


             28           63M-1-2003 , as last amended by Laws of Utah 2011, Chapter 303
             29     
             30      Be it enacted by the Legislature of the state of Utah:
             31          Section 1. Section 63B-1b-202 is amended to read:
             32           63B-1b-202. Custodial officer -- Powers and duties.
             33          (1) (a) There is created within the Division of Finance an officer responsible for the
             34      care, custody, safekeeping, collection, and accounting of all bonds, notes, contracts, trust
             35      documents, and other evidences of indebtedness:
             36          (i) owned or administered by the state or any of its agencies; and
             37          (ii) except as provided in Subsection (1)(b), relating to revolving loan funds.
             38          (b) Notwithstanding Subsection (1)(a), the officer described in Subsection (1)(a) is not
             39      responsible for the care, custody, safekeeping, collection, and accounting of a bond, note,
             40      contract, trust document, or other evidence of indebtedness relating to the:
             41          (i) Agriculture Resource Development Fund, created in Section 4-18-106 ;
             42          (ii) Utah Rural Rehabilitation Fund, created in Section 4-19-4 ;
             43          (iii) Petroleum Storage Tank Loan Fund, created in Section 19-6-405.3 ;
             44          (iv) Olene Walker Housing Loan Fund, created in Section 35A-8-502 ; and
             45          [(v) Business Development for Disadvantaged Rural Communities Restricted Account,
             46      created in Section 63M-1-2003 ; and]
             47          [(vi)] (v) Brownfields Fund, created in Section 19-8-120 .
             48          (2) (a) Each authorizing agency shall deliver to this officer for the officer's care,
             49      custody, safekeeping, collection, and accounting all bonds, notes, contracts, trust documents,
             50      and other evidences of indebtedness:
             51          (i) owned or administered by the state or any of its agencies; and
             52          (ii) except as provided in Subsection (1)(b), relating to revolving loan funds.
             53          (b) This officer shall:
             54          (i) establish systems, programs, and facilities for the care, custody, safekeeping,
             55      collection, and accounting for the bonds, notes, contracts, trust documents, and other evidences
             56      of indebtedness submitted to the officer under this Subsection (2); and
             57          (ii) shall make available updated reports to each authorizing agency as to the status of
             58      loans under their authority.


             59          (3) The officer described in Section 63B-1b-201 shall deliver to the officer described in
             60      Subsection (1)(a) for the care, custody, safekeeping, collection, and accounting by the officer
             61      described in Subsection (1)(a) of all bonds, notes, contracts, trust documents, and other
             62      evidences of indebtedness closed as provided in Subsection 63B-1b-201 (2)(b).
             63          Section 2. Section 63M-1-2002 is amended to read:
             64           63M-1-2002. Definitions.
             65          As used in this part:
             66          (1) "Board" means the Board of Business and Economic Development created by
             67      Section 63M-1-301 .
             68          (2) "Business incubator expense" means an expense relating to funding a program that
             69      is:
             70          (a) designed to provide business support services and resources to one or more
             71      business entities within a project area during the business entities' early stages of development;
             72      and
             73          (b) determined to be a business incubator by the board.
             74          (3) "Business rehabilitation expense" means an expense relating to the renovation or
             75      rehabilitation of an existing building within a project area as determined by the board.
             76          (4) "Debt service" means the payment of debt service on a bond issued to pay a:
             77          (a) business rehabilitation expense relating to a project; or
             78          (b) public infrastructure expense relating to a project.
             79          (5) "Eligible county" means a county of the third, fourth, fifth, or sixth class.
             80          (6) "Eligible expense" means an expense:
             81          (a) incurred by an eligible county;
             82          (b) relating to a project; and
             83          (c) that is:
             84          (i) a business incubator expense;
             85          (ii) debt service; or
             86          (iii) a public infrastructure expense.
             87          (7) "Project" means an economic development project:
             88          (a) as determined by the board; and
             89          (b) for which an eligible county applies to the board in accordance with this part for a


             90      loan or grant to assist the eligible county in paying an eligible expense.
             91          (8) "Project area" means the geographic area within which a project is implemented by
             92      an eligible county.
             93          (9) "Public infrastructure expense" means an expense relating to a publicly owned
             94      improvement located within a project area if:
             95          (a) the expense is:
             96          (i) incurred for:
             97          (A) construction;
             98          (B) demolition;
             99          (C) design;
             100          (D) engineering;
             101          (E) an environmental impact study;
             102          (F) environmental remediation; or
             103          (G) rehabilitation; or
             104          (ii) similar to an expense described in Subsection (9)(a)(i) as determined by the board;
             105      and
             106          (b) the publicly owned improvement is:
             107          (i) not a building as determined by the board; and
             108          (ii) necessary to support a project as determined by the board.
             109          (10) "Publicly owned improvement" means an improvement to real property if:
             110          (a) the real property is owned by:
             111          (i) the United States;
             112          (ii) the state; or
             113          (iii) a political subdivision:
             114          (A) as defined in Section 17B-1-102 ; and
             115          (B) of the state; and
             116          (b) the improvement relates to:
             117          (i) a sewage system including a system for collection, transport, storage, treatment,
             118      dispersal, effluent use, or discharge;
             119          (ii) a drainage or flood control system, including a system for collection, transport,
             120      diversion, storage, detention, retention, dispersal, use, or discharge;


             121          (iii) a water system including a system for production, collection, storage, treatment,
             122      transport, delivery, connection, or dispersal;
             123          (iv) a highway, street, or road system for vehicular use for travel, ingress, or egress;
             124          (v) a rail transportation system;
             125          (vi) a system for pedestrian use for travel, ingress, or egress;
             126          (vii) a public utility system including a system for electricity, gas, or
             127      telecommunications; or
             128          (viii) a system or device that is similar to a system or device described in Subsections
             129      (10)(b)(i) through (vii) as determined by the board.
             130          [(11) "Restricted account" means the Business Development for Disadvantaged Rural
             131      Communities Restricted Account created by Section 63M-1-2003 .]
             132          Section 3. Section 63M-1-2004 is amended to read:
             133           63M-1-2004. Board authority to award a grant or loan to an eligible county --
             134      Interest on a loan -- Eligible county proposal process -- Process for awarding a grant or
             135      loan.
             136          (1) (a) Subject to the provisions of, and funds made available for, this section,
             137      beginning on July 1, 2005, through June 30, 2015, the board may make an award to an eligible
             138      county[: (i)] of one or more [of the following to] grants or loans to assist in paying an eligible
             139      expense relating to a project[:].
             140          [(A) a grant; or]
             141          [(B) a loan; and]
             142          [(ii) from amounts or interest deposited into the restricted account in accordance with
             143      Section 63M-1-2003 to the extent that there is a balance in the restricted account sufficient to
             144      cover the amount of the award.]
             145          (b) The total amount of grants and loans that the board may award in accordance with
             146      this section relating to one project is $75,000.
             147          (c) If the board awards a loan to an eligible county in accordance with this section, the
             148      loan shall be subject to interest as provided by the procedures and methods referred to in
             149      Subsection (6).
             150          (2) (a) Before the board may award an eligible county a grant or loan in accordance
             151      with this section, the eligible county shall submit a written proposal to the board in accordance


             152      with Subsection (2)(b).
             153          (b) The proposal described in Subsection (2)(a) shall:
             154          (i) describe the project area;
             155          (ii) describe the characteristics of the project including a description of how the project
             156      will be implemented;
             157          (iii) provide an economic development plan for the project including a description of
             158      any eligible expenses that will be incurred as part of implementing the project;
             159          (iv) describe the characteristics of the community within which the project area is
             160      located;
             161          (v) establish that the community within which the project area is located is a
             162      disadvantaged community on the basis of one or more of the following factors:
             163          (A) median income per capita within the community;
             164          (B) median property tax revenues generated within the community;
             165          (C) median sales and use tax revenues generated within the community; or
             166          (D) unemployment rates within the community;
             167          (vi) demonstrate that there is a need for the project in the community within which the
             168      project area is located;
             169          (vii) describe the short-term and long-term benefits of the project to the community
             170      within which the project area is located;
             171          (viii) demonstrate that there is a need for assistance in paying eligible expenses relating
             172      to the project;
             173          (ix) indicate the amount of any revenues that will be pledged to match any funds the
             174      board may award as a loan or grant under this section; and
             175          (x) indicate whether there is support for the implementation of the project from:
             176          (A) the community within which the project area is located; and
             177          (B) any cities or towns within which the project area is located.
             178          (3) At the request of the board, representatives from an eligible county shall appear
             179      before the board to:
             180          (a) present a proposal submitted to the board in accordance with Subsection (2)(b); and
             181          (b) respond to any questions or issues raised by the board relating to eligibility to
             182      receive a grant or loan under this section.


             183          (4) The board shall:
             184          (a) consider a proposal submitted to the board in accordance with Subsection (2);
             185          (b) make written findings as to whether the proposal described in Subsection (4)(a)
             186      meets the requirements of Subsection (2)(b);
             187          (c) make written findings as to whether to award the eligible county that submitted the
             188      proposal described in Subsection (4)(a) one or more grants or loans:
             189          (i) on the basis of the factors established in Subsection (5);
             190          (ii) in consultation with the director; and
             191          (iii) in accordance with the procedures established for prioritizing which projects may
             192      be awarded a grant or loan by the board under this section;
             193          (d) if the board determines to award an eligible county a grant or loan in accordance
             194      with this section, make written findings in consultation with the director specifying the:
             195          (i) amount of the grant or loan;
             196          (ii) time period for distributing the grant or loan;
             197          (iii) terms and conditions that the eligible county shall meet to receive the grant or
             198      loan;
             199          (iv) structure of the grant or loan; and
             200          (v) eligible expenses for which the eligible county may expend the grant or loan;
             201          (e) if the board determines to award an eligible county a loan in accordance with this
             202      section, make written findings stating:
             203          (i) the method of calculating interest applicable to the loan; and
             204          (ii) procedures for:
             205          (A) applying interest to the loan; and
             206          (B) paying interest on the loan; and
             207          (f) provide the written findings required by Subsections (4)(b) through (e) to the
             208      eligible county.
             209          (5) For purposes of Subsection (4)(c), the board shall consider the following factors in
             210      determining whether to award an eligible county one or more grants or loans authorized by this
             211      part:
             212          (a) whether the project is likely to result in economic development in the community
             213      within which the project area is located;


             214          (b) whether the community within which the project area is located is a disadvantaged
             215      community on the basis of one or more of the following factors:
             216          (i) median income per capita within the community;
             217          (ii) median property tax revenues generated within the community;
             218          (iii) median sales and use tax revenues generated within the community; or
             219          (iv) unemployment rates within the community;
             220          (c) whether there is a need for the project in the community within which the project
             221      area is located;
             222          (d) whether the project is likely to produce short-term and long-term benefits to the
             223      community within which the project area is located;
             224          (e) whether the project would be successfully implemented without the board awarding
             225      a grant or a loan to the eligible county;
             226          (f) whether any revenues will be pledged to match any funds the board may award as a
             227      grant or loan under this section;
             228          (g) whether there is support for the implementation of the project from:
             229          (i) the community within which the project area is located; and
             230          (ii) any cities or towns within which the project area is located; and
             231          (h) any other factor as determined by the board.
             232          (6) The office shall establish procedures:
             233          (a) for prioritizing which projects may be awarded a grant or loan by the board under
             234      this section; and
             235          (b) for loans awarded in accordance with this section:
             236          (i) the methods of calculating interest applicable to the loans; and
             237          (ii) procedures for:
             238          (A) applying interest to the loans; and
             239          (B) paying interest on the loans.
             240          Section 4. Repealer.
             241          This bill repeals:
             242          Section 63M-1-2003 , Creation of Business Development for Disadvantaged Rural
             243      Communities Restricted Account -- Interest -- Costs of administering the restricted
             244      account -- Deposit of certain money and interest into the General Fund.






Legislative Review Note
    as of 2-20-14 8:20 AM


Office of Legislative Research and General Counsel


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