This document includes Senate 3rd Reading Floor Amendments incorporated into the bill on Mon, Mar 6, 2017 at 5:50 PM by lpoole.
Senator Wayne A. Harper proposes the following substitute bill:


1     
HIGHWAY GENERAL OBLIGATION BONDS

2     
AUTHORIZATION

3     
2017 GENERAL SESSION

4     
STATE OF UTAH

5     
Chief Sponsor: Wayne A. Harper

6     
House Sponsor: Francis D. Gibson

7     

8     LONG TITLE
9     General Description:
10          This bill enacts and amends provisions relating to transportation funding.
11     Highlighted Provisions:
12          This bill:
13          ▸     authorizes the issuance of general obligation bonds to pay for certain state highway
14     construction or reconstruction projects;
15          ▸     authorizes the issuance of general obligation bonds to pay for certain state or local
16     highway construction or reconstruction projects, transportation facilities, or
17     multimodal transportation projects in a county of the first class;
18          ▸     specifies the use of general obligation bond proceeds and the manner of issuance;
19          ▸     exempts certain general obligation bonds from certain debt limitation provisions;
20          ▸     requires the Department of Transportation and the Transportation Commission to
21     report the amount of bonds needed to fund certain projects in the next fiscal year to
22     the Executive Appropriations Committee of the Legislature before the bonds may
23     be issued; and
24          ▸     makes technical changes.
25     Money Appropriated in this Bill:

26          None
27     Other Special Clauses:
28          This bill provides a special effective date.
29     Utah Code Sections Affected:
30     AMENDS:
31          63B-1-306, as last amended by Laws of Utah 2009, Chapters 241 and 275
32          63J-3-402, as last amended by Laws of Utah 2009, Chapters 241 and 275
33          72-2-121, as last amended by Laws of Utah 2016, Chapter 12
34          72-2-124, as last amended by Laws of Utah 2016, Chapters 137 and 291
35     ENACTS:
36          63B-27-101, Utah Code Annotated 1953
37          63B-27-102, Utah Code Annotated 1953
38     

39     Be it enacted by the Legislature of the state of Utah:
40          Section 1. Section 63B-1-306 is amended to read:
41          63B-1-306. Obligations issued by authority -- Limitation of liability on
42     obligations -- Limitation on amount of obligations issued.
43          (1) (a) All obligations issued by the authority under this part shall be limited
44     obligations of the authority and may not constitute, nor give rise to, a general obligation or
45     liability of, nor a charge against the general credit or taxing power of, this state or any of its
46     political subdivisions.
47          (b) This limitation shall be plainly stated upon all obligations.
48          (2) (a) No authority obligations incurred under this section may be issued in an amount
49     exceeding the difference between the total indebtedness of the state and an amount equal to
50     1-1/2% of the value of the taxable property of the state.
51          (b) Debt issued under authority of the following parts or sections may not be included
52     as part of the total indebtedness of the state of Utah in determining the debt limit established by
53     this Subsection (2):
54          (i) Title 63B, Chapter 6, Part 2, 1997 Highway General Obligation Bond
55     Authorization;
56          (ii) Title 63B, Chapter 6, Part 3, 1997 Highway Bond Anticipation Note Authorization;

57          (iii) Title 63B, Chapter 7, Part 2, 1998 Highway General Obligation Bond
58     Authorization;
59          (iv) Title 63B, Chapter 7, Part 3, 1998 Highway Bond Anticipation Note
60     Authorization;
61          (v) Title 63B, Chapter 8, Part 2, 1999 Highway General Obligation Bond
62     Authorization;
63          (vi) Title 63B, Chapter 8, Part 3, 1999 Highway Bond Anticipation Note
64     Authorization;
65          (vii) Title 63B, Chapter 9, Part 2, 2000 Highway General Obligation Bond;
66          (viii) Title 63B, Chapter 10, Part 1, 2001 Highway General Obligation Bonds;
67          (ix) Title 63B, Chapter 10, Part 2, 2001 Highway General Obligation Bond
68     Anticipation Notes Authorization;
69          (x) Title 63B, Chapter 11, Part 5, 2002 Highway General Obligation Bonds for Salt
70     Lake County;
71          (xi) Title 63B, Chapter 11, Part 6, 2002 Highway General Obligation Bond
72     Anticipation Notes for Salt Lake County;
73          (xii) Section 63B-13-102;
74          (xiii) Section 63B-16-101;
75          (xiv) Section 63B-16-102;
76          (xv) Section 63B-18-401; [and]
77          (xvi) Section 63B-18-402[.]; and
78          (xvii) Title 63B, Chapter 27, Part 1, 2017 Highway General Obligation Bonds.
79          (c) Debt issued under authority of Section 63B-7-503 may not be included as part of
80     the total indebtedness of the state in determining the debt limit established by this Subsection
81     (2).
82          (3) The obligations shall be authorized by resolution of the authority, following
83     approval of the Legislature, and may:
84          (a) be executed and delivered at any time, and from time to time, as the authority may
85     determine;
86          (b) be sold at public or private sale in the manner and at the prices, either at, in excess
87     of, or below their face value and at the times that the authority determines;

88          (c) be in the form and denominations that the authority determines;
89          (d) be of the tenor that the authority determines;
90          (e) be in registered or bearer form either as to principal or interest or both;
91          (f) be payable in those installments and at the times that the authority determines;
92          (g) be payable at the places, either within or without this state, that the authority
93     determines;
94          (h) bear interest at the rate or rates, payable at the place or places, and evidenced in the
95     manner, that the authority determines;
96          (i) be redeemable before maturity, with or without premium;
97          (j) contain any other provisions not inconsistent with this part that are considered to be
98     for the best interests of the authority and provided for in the proceedings of the authority under
99     which the bonds are authorized to be issued; and
100          (k) bear facsimile signatures and seals.
101          (4) The authority may pay any expenses, premiums, or commissions, that it considers
102     necessary or advantageous in connection with the authorization, sale, and issuance of these
103     obligations, from the proceeds of the sale of the obligations or from the revenues of the projects
104     involved.
105          Section 2. Section 63B-27-101 is enacted to read:
106     
CHAPTER 27. 2017 BONDING AND FINANCING AUTHORIZATIONS

107     
Part 1. 2017 Highway General Obligation Bonds

108          63B-27-101. Highway bonds -- Maximum amount -- Use of proceeds for highway
109     projects.
110          (1) (a) Subject to the restriction in Subsection (1)(c), the total amount of bonds issued
111     under this section may not exceed $1,000,000,000.
112          (b) When the Department of Transportation certifies to the commission that the
113     requirements of Subsection 72-2-124(5) have been met and certifies the amount of bond
114     proceeds that the commission needs to provide funding for the projects described in Subsection
115     (2) for the current or next fiscal year, the commission may issue and sell general obligation
116     bonds in an amount equal to the certified amount plus costs of issuance.
117          (c) The commission may not issue general obligation bonds authorized under this
118     section if the issuance of the general obligation bonds would result in the total current

119     outstanding general obligation debt of the state exceeding 50% of the limitation described in
120     the Utah Constitution, Article XIV, Section 1.
121          (2) Except as provided in Subsection (3), proceeds from the issuance of bonds shall be
122     provided to the Department of Transportation to pay all or part of the costs of the following
123     state highway construction or reconstruction projects:
124          (a) state and federal highways prioritized by the Transportation Commission through
125     the prioritization process for new transportation capacity projects adopted under Section
126     72-1-304, giving priority consideration for projects with a regional significance or that support
127     economic development within the state, including:
128          (i) projects that are prioritized but exceed available cash flow beyond the normal
129     programming horizon; or
130          (ii) projects prioritized in the state highway construction program; and
131          (b) $100,000,000 to be used by the Department of Transportation for transportation
132     improvements as prioritized by the Transportation Commission for projects that:
133          (i) have a significant economic development impact associated with recreation and
134     tourism within the state; and
135          (ii) address significant needs for congestion mitigation.
136          (3) Nineteen million dollars of the bond proceeds issued under this section shall be
137     provided to the Transportation Infrastructure Loan Fund created by Section 72-2-202 to make
138     funds available for a transportation infrastructure loan or transportation infrastructure
139     assistance under Title 72, Chapter 2, Part 2, Transportation Infrastructure Loan Fund, as
140     follows:
141          (a) $10,000,000 to the military installation development authority created in Section
142     63H-1-201;
143          (b) $5,000,000 for right-of-way acquisition and highway construction in Davis County;
144     and
145          (c) $4,000,000 for pedestrian access and crossings by a Ŝ→ [
future] ←Ŝ public transit fixed
146     guideway rail station and an institution of higher education.
147          (4) The bond proceeds issued under this section shall be provided to the Department of
148     Transportation.
149          (5) The costs under Subsection (2) may include the costs of studies necessary to make

150     transportation infrastructure improvements, the costs of acquiring land, interests in land, and
151     easements and rights-of-way, the costs of improving sites, and making all improvements
152     necessary, incidental, or convenient to the facilities, and the costs of interest estimated to
153     accrue on these bonds during the period to be covered by construction of the projects plus a
154     period of six months after the end of the construction period, interest estimated to accrue on
155     any bond anticipation notes issued under the authority of this title, and all related engineering,
156     architectural, and legal fees.
157          (6) The commission or the state treasurer may make any statement of intent relating to
158     a reimbursement that is necessary or desirable to comply with federal tax law.
159          (7) The Department of Transportation may enter into agreements related to the projects
160     described in Subsection (2) before the receipt of proceeds of bonds issued under this section.
161          Section 3. Section 63B-27-102 is enacted to read:
162          63B-27-102. Highway bonds -- Maximum amount -- Use of proceeds for highway
163     projects.
164          (1) (a) Subject to the restriction in Subsection (1)(c), the total amount of bonds issued
165     under this section may not exceed $47,000,000.
166          (b) When the Department of Transportation certifies to the commission the amount of
167     bond proceeds that the commission needs to provide funding for the projects described in
168     Subsection (2), the commission may issue and sell general obligation bonds in an amount equal
169     to the certified amount plus costs of issuance.
170          (c) The commission may not issue general obligation bonds authorized under this
171     section if the issuance of the general obligation bonds would result in the total current
172     outstanding general obligation debt of the state exceeding 50% of the limitation described in
173     the Utah Constitution, Article XIV, Section 1.
174          (2) (a) Proceeds from the bonds issued under this section shall be provided to the
175     Department of Transportation to pay for or to provide funds to a municipality or county to pay
176     for the costs of right-of-way acquisition, construction, reconstruction, renovations, or
177     improvements to highways, transportation facilities, or multimodal transportation projects
178     described in Subsection (2)(b).
179          (b) Bond proceeds described under Subsection (2)(a) shall be used to pay for state and
180     local highway projects or transportation facilities or multimodal transportation projects

181     described in Subsection 72-2-121(4)(c) in Salt Lake County prioritized by the county.
182          (c) The costs under this Subsection (2) may include the costs of acquiring land,
183     interests in land, and easements and rights-of-way, the costs of improving sites, and making all
184     improvements necessary, incidental, or convenient to the facilities, and the costs of interest
185     estimated to accrue on these bonds during the period to be covered by construction of the
186     projects plus a period of six months after the end of the construction period, interest estimated
187     to accrue on any bond anticipation notes issued under the authority of this title, and all related
188     engineering, architectural, and legal fees.
189          (3) The commission or the state treasurer may make any statement of intent relating to
190     a reimbursement that is necessary or desirable to comply with federal tax law.
191          (4) The Department of Transportation may enter into agreements related to the project
192     before the receipt of proceeds of bonds issued under this chapter.
193          Section 4. Section 63J-3-402 is amended to read:
194          63J-3-402. Debt limitation -- Vote requirement needed to exceed limitation --
195     Exceptions.
196          (1) (a) Except as provided in Subsection (1)(b), the outstanding general obligation debt
197     of the state may not exceed 45% of the maximum allowable appropriations limit unless
198     approved by more than a two-thirds vote of both houses of the Legislature.
199          (b) Notwithstanding the limitation contained in Subsection (1)(a), debt issued under the
200     authority of the following parts or sections is not subject to the debt limitation established by
201     this section:
202          (i) Title 63B, Chapter 6, Part 2, 1997 Highway General Obligation Bond
203     Authorization;
204          (ii) Title 63B, Chapter 6, Part 3, 1997 Highway Bond Anticipation Note Authorization;
205          (iii) Title 63B, Chapter 7, Part 2, 1998 Highway General Obligation Bond
206     Authorization;
207          (iv) Title 63B, Chapter 7, Part 3, 1998 Highway Bond Anticipation Note
208     Authorization;
209          (v) Title 63B, Chapter 8, Part 2, 1999 Highway General Obligation Bond
210     Authorization;
211          (vi) Title 63B, Chapter 8, Part 3, 1999 Highway Bond Anticipation Note

212     Authorization;
213          (vii) Title 63B, Chapter 9, Part 2, 2000 Highway General Obligation Bond;
214          (viii) Title 63B, Chapter 10, Part 1, 2001 Highway General Obligation Bonds;
215          (ix) Title 63B, Chapter 10, Part 2, 2001 Highway General Obligation Bond
216     Anticipation Notes Authorization;
217          (x)      Title 63B, Chapter 11, Part 5, 2002 Highway General Obligation Bonds for Salt
218     Lake County;
219          (xi) Title 63B, Chapter 11, Part 6, 2002 Highway General Obligation Bond
220     Anticipation Notes for Salt Lake County [Authorization];
221          (xii) Section 63B-13-102;
222          (xiii) Section 63B-16-101;
223          (xiv) Section 63B-16-102;
224          (xv) Section 63B-18-401; [and]
225          (xvi) Section 63B-18-402[.]; and
226          (xvii) Title 63B, Chapter 27, Part 1, 2017 Highway General Obligation Bonds.
227          (2) This section does not apply if contractual rights will be impaired.
228          Section 5. Section 72-2-121 is amended to read:
229          72-2-121. County of the First Class Highway Projects Fund.
230          (1) There is created a special revenue fund within the Transportation Fund known as
231     the "County of the First Class Highway Projects Fund."
232          (2) The fund consists of money generated from the following revenue sources:
233          (a) any voluntary contributions received for new construction, major renovations, and
234     improvements to highways within a county of the first class;
235          (b) the portion of the sales and use tax described in Subsection 59-12-2214(3)(b)
236     deposited in or transferred to the fund;
237          (c) the portion of the sales and use tax described in Subsection 59-12-2217(2)(b) and
238     required by Subsection 59-12-2217(8)(b) to be deposited in or transferred to the fund; and
239          (d) a portion of the local option highway construction and transportation corridor
240     preservation fee imposed in a county of the first class under Section 41-1a-1222 deposited in or
241     transferred to the fund.
242          (3) (a) The fund shall earn interest.

243          (b) All interest earned on fund money shall be deposited into the fund.
244          (4) The executive director shall use the fund money only:
245          (a) to pay debt service and bond issuance costs for bonds issued under Sections
246     63B-16-102 [and], 63B-18-402, and 63B-27-102;
247          (b) for right-of-way acquisition, new construction, major renovations, and
248     improvements to highways within a county of the first class and to pay any debt service and
249     bond issuance costs related to those projects, including improvements to a highway located
250     within a municipality in a county of the first class where the municipality is located within the
251     boundaries of more than a single county;
252          (c) for the construction, acquisition, use, maintenance, or operation of:
253          (i) an active transportation facility for nonmotorized vehicles;
254          (ii) multimodal transportation that connects an origin with a destination; or
255          (iii) a facility that may include a:
256          (A) pedestrian or nonmotorized vehicle trail;
257          (B) nonmotorized vehicle storage facility;
258          (C) pedestrian or vehicle bridge; or
259          (D) vehicle parking lot or parking structure;
260          (d) for fiscal year 2012-13 only, to pay for or to provide funds to a municipality or
261     county to pay for a portion of right-of-way acquisition, construction, reconstruction,
262     renovations, and improvements to highways described in Subsections 72-2-121.4(7), (8), and
263     (9);
264          (e) to transfer to the 2010 Salt Lake County Revenue Bond Sinking Fund created by
265     Section 72-2-121.3 the amount required in Subsection 72-2-121.3(4)(c) minus the amounts
266     transferred in accordance with Subsection 72-2-124(4)(a)(iv);
267          (f) for a fiscal year beginning on or after July 1, 2013, to pay debt service and bond
268     issuance costs for $30,000,000 of the bonds issued under Section 63B-18-401 for the projects
269     described in Subsection 63B-18-401(4)(a);
270          (g) for a fiscal year beginning on or after July 1, 2013, and after the department has
271     verified that the amount required under Subsection 72-2-121.3(4)(c) is available in the fund, to
272     transfer an amount equal to 50% of the revenue generated by the local option highway
273     construction and transportation corridor preservation fee imposed under Section 41-1a-1222 in

274     a county of the first class:
275          (i) to the legislative body of a county of the first class; and
276          (ii) to be used by a county of the first class for:
277          (A) highway construction, reconstruction, or maintenance projects; or
278          (B) the enforcement of state motor vehicle and traffic laws;
279          (h) for fiscal year 2015 only, and after the department has verified that the amount
280     required under Subsection 72-2-121.3(4)(c) is available in the fund and the transfer under
281     Subsection (4)(f) has been made, to transfer an amount equal to the remainder of the revenue
282     available in the fund for the 2015 fiscal year:
283          (i) to the legislative body of a county of the first class; and
284          (ii) to be used by a county of the first class for:
285          (A) highway construction, reconstruction, or maintenance projects; or
286          (B) the enforcement of state motor vehicle and traffic laws;
287          (i) for fiscal year 2015-16 only, and after the department has verified that the amount
288     required under Subsection 72-2-121.3(4)(c) is available in the fund and the transfer under
289     Subsection (4)(f) has been made, to transfer an amount equal to $25,000,000:
290          (i) to the legislative body of a county of the first class; and
291          (ii) to be used by the county for the purposes described in this section;
292          (j) for a fiscal year beginning on or after July 1, 2015, after the department has verified
293     that the amount required under Subsection 72-2-121.3(4)(c) is available in the fund and the
294     transfer under Subsection (4)(f) has been made, to annually transfer an amount equal to up to
295     42.5% of the sales and use tax revenue imposed in a county of the first class and deposited into
296     the fund in accordance with Subsection 59-12-2214(3)(b) to:
297          (i) the appropriate debt service or sinking fund for the repayment of bonds issued under
298     Section 63B-27-102; and
299          (ii) the Transportation Investment Fund of 2005 created in Section 72-2-124 until
300     $28,079,000 has been deposited into the Transportation Investment Fund of 2005; and
301          (k) for a fiscal year beginning after the amount described in Subsection (4)(j) has been
302     repaid to the Transportation Investment Fund of 2005 until fiscal year 2030, [and] after the
303     department has verified that the amount required under Subsection 72-2-121.3(4)(c) is
304     available in the fund and the transfer under Subsection (4)(f) has been made, and after the

305     bonds under Section 63B-27-102 have been repaid, to annually transfer an amount equal to up
306     to 42.5% of the sales and use tax revenue imposed in a county of the first class and deposited
307     into the fund in accordance with Subsection 59-12-2214(3)(b):
308          (i) to the legislative body of a county of the first class; and
309          (ii) to be used by the county for the purposes described in this section.
310          (5) The revenues described in Subsections (2)(b), (c), and (d) that are deposited in the
311     fund and bond proceeds from bonds issued under Sections 63B-16-102 [and], 63B-18-402, and
312     63B-27-102 are considered a local matching contribution for the purposes described under
313     Section 72-2-123.
314          (6) The additional administrative costs of the department to administer this fund shall
315     be paid from money in the fund.
316          (7) Notwithstanding any statutory or other restrictions on the use or expenditure of the
317     revenue sources deposited into this fund, the Department of Transportation may use the money
318     in this fund for any of the purposes detailed in Subsection (4).
319          Section 6. Section 72-2-124 is amended to read:
320          72-2-124. Transportation Investment Fund of 2005.
321          (1) There is created a capital projects fund entitled the Transportation Investment Fund
322     of 2005.
323          (2) The fund consists of money generated from the following sources:
324          (a) any voluntary contributions received for the maintenance, construction,
325     reconstruction, or renovation of state and federal highways;
326          (b) appropriations made to the fund by the Legislature;
327          (c) the sales and use tax revenues deposited into the fund in accordance with Section
328     59-12-103;
329          (d) registration fees designated under Section 41-1a-1201; and
330          (e) revenues transferred to the fund in accordance with Section 72-2-106.
331          (3) (a) The fund shall earn interest.
332          (b) All interest earned on fund money shall be deposited into the fund.
333          (4) (a) Except as provided in Subsection (4)(b), the executive director may use fund
334     money only to pay:
335          (i) the costs of maintenance, construction, reconstruction, or renovation to state and

336     federal highways prioritized by the Transportation Commission through the prioritization
337     process for new transportation capacity projects adopted under Section 72-1-304;
338          (ii) the costs of maintenance, construction, reconstruction, or renovation to the highway
339     projects described in Subsections 63B-18-401(2), (3), and (4);
340          (iii) principal, interest, and issuance costs of bonds authorized by Section 63B-18-401
341     minus the costs paid from the County of the First Class Highway Projects Fund in accordance
342     with Subsection 72-2-121(4)(f);
343          (iv) for a fiscal year beginning on or after July 1, 2013, to transfer to the 2010 Salt
344     Lake County Revenue Bond Sinking Fund created by Section 72-2-121.3 the amount certified
345     by Salt Lake County in accordance with Subsection 72-2-121.3(4)(c) as necessary to pay the
346     debt service on $30,000,000 of the revenue bonds issued by Salt Lake County;
347          (v) principal, interest, and issuance costs of bonds authorized by Section 63B-16-101
348     for projects prioritized in accordance with Section 72-2-125;
349          (vi) all highway general obligation bonds that are intended to be paid from revenues in
350     the Centennial Highway Fund created by Section 72-2-118; and
351          (vii) for fiscal year 2015-16 only, to transfer $25,000,000 to the County of the First
352     Class Highway Projects Fund created in Section 72-2-121 to be used for the purposes described
353     in Section 72-2-121.
354          (b) The executive director may use fund money to exchange for an equal or greater
355     amount of federal transportation funds to be used as provided in Subsection (4)(a).
356          (5) (a) Before bonds authorized by Section 63B-18-401 or 63B-27-101 may be issued
357     in any fiscal year, the department and the commission shall appear before the Executive
358     Appropriations Committee of the Legislature and present the amount of bond proceeds that the
359     department needs to provide funding for the projects identified in Subsections 63B-18-401(2),
360     (3), and (4) or Subsection 63B-27-101(2) for the current or next fiscal year.
361          (b) The Executive Appropriations Committee of the Legislature shall review and
362     comment on the amount of bond proceeds needed to fund the projects.
363          (6) The Division of Finance shall, from money deposited into the fund, transfer the
364     amount of funds necessary to pay principal, interest, and issuance costs of bonds authorized by
365     Section 63B-18-401 or 63B-27-101 in the current fiscal year to the appropriate debt service or
366     sinking fund.

367          Section 7. Effective date.
368          This bill takes effect on July 1, 2017.