This document includes Senate 2nd and 3rd Reading Floor Amendments incorporated into the bill on Mon, Mar 11, 2019 at 8:20 PM by lpoole.
Senator Ralph Okerlund proposes the following substitute bill:


1     
THROUGHPUT INFRASTRUCTURE AMENDMENTS

2     
2019 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Ralph Okerlund

5     
House Sponsor: Michael K. McKell

6     

7     LONG TITLE
8     General Description:
9          This bill addresses throughput infrastructure.
10     Highlighted Provisions:
11          This bill:
12          ▸     defines terms;
13          ▸     addresses the Throughput Infrastructure Fund;
14          ▸     provides for the first throughput infrastructure project approved by the Office of
15     Energy Development;
16          ▸     requires an escrow account established under an escrow agreement;
17          ▸     provides for grant repayments;
18          ▸     addresses throughput infrastructure projects from repayment of the first throughput
19     infrastructure project; and
20          ▸     makes technical and conforming changes.
21     Money Appropriated in this Bill:
22          None
23     Other Special Clauses:
24          None
25     Utah Code Sections Affected:
26     AMENDS:
27          35A-8-302, as last amended by Laws of Utah 2017, Chapter 262
28          35A-8-308, as last amended by Laws of Utah 2017, Chapters 181 and 421
29          63M-4-401, as last amended by Laws of Utah 2017, Chapters 227 and 470
30     ENACTS:
31          35A-8-309.5, Utah Code Annotated 1953
32     RENUMBERS AND AMENDS:
33          35A-8-310, (Renumbered from 35A-8-309, as last amended by Laws of Utah 2017,
34     Chapters 181 and 421)
35     

36     Be it enacted by the Legislature of the state of Utah:
37          Section 1. Section 35A-8-302 is amended to read:
38          35A-8-302. Definitions.
39          As used in this part:
40          (1) "Bonus payments" means that portion of the bonus payments received by the
41     United States government under the Leasing Act paid to the state under Section 35 of the
42     Leasing Act, 30 U.S.C. Sec. 191, together with any interest that had accrued on those
43     payments.
44          (2) "Impact board" means the Permanent Community Impact Fund Board created under
45     Section 35A-8-304.
46          (3) "Impact fund" means the Permanent Community Impact Fund established by this
47     chapter.
48          (4) "Interlocal agency" means a legal or administrative entity created by a subdivision
49     or combination of subdivisions under the authority of Title 11, Chapter 13, Interlocal
50     Cooperation Act.
51          (5) "Leasing Act" means the Mineral Lands Leasing Act of 1920, 30 U.S.C. Sec. 181 et
52     seq.
53          (6) "Office of Energy Development" means the Office of Energy Development created
54     in Section 63M-4-401.
55          [(6)] (7) "Qualifying sales and use tax distribution reduction" means that, for the
56     calendar year beginning on January 1, 2008, the total sales and use tax distributions a city
57     received under Section 59-12-205 were reduced by at least 15% from the total sales and use tax
58     distributions the city received under Section 59-12-205 for the calendar year beginning on
59     January 1, 2007.
60          [(7)] (8) "Subdivision" means a county, city, town, county service area, special service
61     district, special improvement district, water conservancy district, water improvement district,
62     sewer improvement district, housing authority, building authority, school district, or public
63     postsecondary institution organized under the laws of this state.
64          [(8)] (9) (a) "Throughput infrastructure project" means the following facilities, whether
65     located within, partially within, or outside of the state:
66          (i) a bulk commodities ocean terminal;
67          (ii) a pipeline for the transportation of liquid or gaseous hydrocarbons;
68          (iii) electric transmission lines and ancillary facilities;
69          (iv) a shortline freight railroad and ancillary facilities;
70          (v) a plant for producing hydrogen, including the liquification of hydrogen, for use as a
71     fuel in zero emission motor vehicles; or
72          (vi) a plant for the production of zero emission hydrogen fueled trucks.
73          (b) "Throughput infrastructure project" includes:
74          (i) an ownership interest or a joint or undivided ownership interest in a facility;
75          (ii) a membership interest in the owner of a facility; or
76          (iii) a contractual right, whether secured or unsecured, to use all or a portion of the
77     throughput, transportation, or transmission capacity of a facility.
78          Section 2. Section 35A-8-308 is amended to read:
79          35A-8-308. Throughput Infrastructure Fund.
80          (1) There is created an enterprise fund known as the "Throughput Infrastructure Fund."
81          (2) The [fund] Throughput Infrastructure Fund consists of money generated from the
82     following revenue sources:
83          (a) [all] the amounts transferred to the [fund] Throughput Infrastructure Fund under
84     Subsection 59-12-103(12);
85          (b) [any] voluntary contributions received;
86          (c) appropriations made to the [fund] Throughput Infrastructure Fund by the
87     Legislature; and
88          (d) [all] the amounts received from the repayment of loans [made by the impact board
89     under Section 35A-8-309] or repayable grants under Sections 35A-8-309.5 and 35A-8-310.
90          (3) The state treasurer shall:
91          (a) invest the money in the [fund] Throughput Infrastructure Fund, pending the
92     applications for grants or loans under Sections 35A-8-309.5 and 35A-8-310, by following the
93     procedures and requirements of Title 51, Chapter 7, State Money Management Act; [and]
94          (b) deposit [all] the interest or other earnings derived from those investments into the
95     [fund.] Throughput Infrastructure Fund; and
96          (c) contract for trust and escrow services to be used as provided under Section
97     35A-8-309.5.
98          Section 3. Section 35A-8-309.5 is enacted to read:
99          35A-8-309.5. Funding for first throughput infrastructure project -- Administered
100     by Office of Energy Development -- Terms.
101          (1) Upon receipt of an application from an interlocal agency created for the sole
102     purpose of undertaking a throughput infrastructure project that is a bulk commodities ocean
103     terminal, the Office of Energy Development shall grant all of the money in the Throughput
104     Infrastructure Fund, created in Section 35A-8-308, to the interlocal agency if the application
105     demonstrates that the interlocal agency:
106          (a) has taken steps to plan for a bulk commodities ocean terminal; and
107          (b) can comply with Subsections (2) and (3).
108          (2) (a) The interlocal agency described in Subsection (1) shall enter into an escrow
109     agreement with the Office of Energy Development, and the trust and escrow services provider
110     contracted for under Subsection 35A-8-308(3)(c).
111          (b) The interlocal agency shall deposit the grant directly into the established escrow
112     account and pending its use by the interlocal agency the grant shall be invested as provided in
113     Title 51, Chapter 7, State Money Management Act.
114          (3) The escrow agreement described in Subsection (2) shall:
115          (a) permit the interlocal agency to use up to 2% of the amount on deposit in the escrow
116     account to pay or reimburse the interlocal agency's costs incurred before the acquisition of the
117     throughput infrastructure project, including:
118          (i) organizational costs;
119          (ii) costs and expenses incurred in the interlocal agency's investigation, review, and
120     negotiation of the interlocal agency's acquisition of the throughput infrastructure project; and
121          (iii) costs of the escrow agreement;
122          (b) provide that the escrow agent shall release the amount remaining on deposit in the
123     escrow account after the use described in Subsection (3)(a) only to pay the cost of the
124     throughput infrastructure project, including:
125          (i) amounts for working capital; Ŝ→ [and] ←Ŝ
126          (ii) reserves and transaction costs upon the delivery of a bond, note, or other instrument
127     issued by the interlocal agency that:
128          (A) provides for the repayment of the grant in annual installments beginning not less
129     than three years after the throughput infrastructure project commences full commercial
130     operation; Ŝ→ and ←Ŝ
131          (B) is secured solely by a pledge by the interlocal agency of the net revenues received
132     from the throughput infrastructure project; and
133          (iii) is otherwise a nonrecourse obligation of the interlocal agency and the members of
134     the interlocal agency; and
135          (c) Ŝ→ [contains] contain ←Ŝ other terms that are acceptable to the parties to the escrow
135a     agreement.
136          (4) A grant repayment made by the interlocal agency under this section shall be
137     deposited into the Throughput Infrastructure Fund for use as provided in Section 35A-8-310.
138          Section 4. Section 35A-8-310, which is renumbered from Section 35A-8-309 is
139     renumbered and amended to read:
140          [35A-8-309].      35A-8-310. Throughput Infrastructure Fund administered
141     by impact board -- Uses -- Review by board -- Annual report.
142          (1) The impact board shall:
143          [(a) make grants and loans from the Throughput Infrastructure Fund created in Section
144     35A-8-308 for a throughput infrastructure project;]
145          [(b) use money transferred to the Throughput Infrastructure Fund in accordance with
146     Subsection 59-12-103(12)]
147          (a) use the repayments deposited into the Throughput Infrastructure Fund under
148     Subsection 35A-8-309.5(4) to provide a loan or grant to finance the cost of acquisition or
149     construction of a throughput infrastructure project to one or more local political subdivisions,
150     including a Utah interlocal [entity] agency created under Title 11, Chapter 13, Interlocal
151     Cooperation Act;
152          [(c)] (b) administer the Throughput Infrastructure Fund in a manner that will keep a
153     portion of the fund revolving;
154          [(d)] (c) determine provisions for repayment of loans;
155          [(e)] (d) establish criteria for awarding loans and grants; and
156          [(f)] (e) establish criteria for determining eligibility for assistance under this section.
157          (2) The cost of acquisition or construction of a throughput infrastructure project
158     includes amounts for working capital, reserves, transaction costs, and other amounts
159     determined by the impact board to be allocable to a throughput infrastructure project.
160          (3) The impact board may restructure or forgive all or part of a local political
161     subdivision's or interlocal [entity's] agency's obligation to repay loans for extenuating
162     circumstances.
163          (4) [In order to] To receive assistance under this section, a local political subdivision or
164     an interlocal [entity] agency shall submit a formal application containing the information that
165     the impact board requires.
166          (5) (a) The impact board shall:
167          (i) review the proposed uses of the Throughput Infrastructure Fund for a loan or grant
168     before approving the loan or grant and may condition its approval on whatever assurances the
169     impact board considers necessary to ensure that proceeds of the loan or grant will be used in
170     accordance with this section;
171          (ii) ensure that each loan specifies terms for interest deferments, accruals, and
172     scheduled principal repayment; and
173          (iii) ensure that repayment terms are evidenced by bonds, notes, or other obligations of
174     the appropriate local political subdivision or interlocal [entity] agency issued to the impact
175     board and payable from the net revenues of a throughput infrastructure project.
176          (b) An instrument described in Subsection (5)(a)(iii) may be:
177          (i) non-recourse to the local political subdivision or interlocal [entity] agency; and
178          (ii) limited to a pledge of the net revenues from a throughput infrastructure project.
179          (6) (a) Subject to the restriction in Subsection (6)(b), the impact board shall allocate
180     from the Throughput Infrastructure Fund to the board those amounts that are appropriated by
181     the Legislature for the administration of the Throughput Infrastructure Fund.
182          (b) The amount described in Subsection (6)(a) may not exceed 2% of the annual
183     receipts to the fund.
184          (7) The board shall include in the annual written report described in Section
185     35A-1-109:
186          (a) the number and type of loans and grants made under this section; and
187          (b) a list of local political subdivisions or interlocal [entities] agencies that received
188     assistance under this section.
189          Section 5. Section 63M-4-401 is amended to read:
190          63M-4-401. Office of Energy Development -- Creation -- Director -- Purpose --
191     Rulemaking regarding confidential information -- Fees.
192          (1) There is created an Office of Energy Development.
193          (2) (a) The governor's energy advisor shall serve as the director of the office or appoint
194     a director of the office.
195          (b) The director:
196          (i) shall, if the governor's energy advisor appoints a director under Subsection (2)(a),
197     report to the governor's energy advisor; and
198          (ii) may appoint staff as funding within existing budgets allows.
199          (c) The office may consolidate energy staff and functions existing in the state energy
200     program.
201          (3) The purposes of the office are to:
202          (a) serve as the primary resource for advancing energy and mineral development in the
203     state;
204          (b) implement:
205          (i) the state energy policy under Section 63M-4-301; and
206          (ii) the governor's energy and mineral development goals and objectives;
207          (c) advance energy education, outreach, and research, including the creation of
208     elementary, higher education, and technical college energy education programs;
209          (d) promote energy and mineral development workforce initiatives; and
210          (e) support collaborative research initiatives targeted at Utah-specific energy and
211     mineral development.
212          (4) By following the procedures and requirements of Title 63J, Chapter 5, Federal
213     Funds Procedures Act, the office may:
214          (a) seek federal grants or loans;
215          (b) seek to participate in federal programs; and
216          (c) in accordance with applicable federal program guidelines, administer federally
217     funded state energy programs.
218          (5) The office shall perform the duties required by Sections 11-42a-106, 35A-8-309.5,
219     59-7-614.7, 59-10-1029, Part 5, Alternative Energy Development Tax Credit Act, and Part 6,
220     High Cost Infrastructure Development Tax Credit Act.
221          (6) (a) For purposes of administering this section, the office may make rules, by
222     following the procedures and requirements of Title 63G, Chapter 3, Utah Administrative
223     Rulemaking Act, to maintain as confidential, and not as a public record, information that the
224     office receives from any source.
225          (b) The office shall maintain information the office receives from any source at the
226     level of confidentiality assigned by the source.
227          (7) The office may charge application, filing, and processing fees in amounts
228     determined by the office in accordance with Section 63J-1-504 as dedicated credits for
229     performing office duties described in this part.