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8 LONG TITLE
9 General Description:
10 This bill creates the Municipal Infrastructure Fund (fund) within the Governor's Office
11 of Economic Development (office).
12 Highlighted Provisions:
13 This bill:
14 ▸ defines terms;
15 ▸ creates the fund within the office;
16 ▸ describes the allowable uses of the fund, including that the fund is to be used for
17 infrastructure loans to rural municipalities;
18 ▸ describes the office's requirements in providing and managing loans from the fund;
19 and
20 ▸ grants certain rulemaking authority to the office related to managing the fund.
21 Money Appropriated in this Bill:
22 This bill appropriates in fiscal year 2022:
23 ▸ to General Fund Restricted -- Municipal Infrastructure Fund Restricted Account, as
24 a one-time appropriation:
25 • from the General Fund, One-time, $69,000,000; and
26 ▸ to Governor's Office of Economic Development -- Municipal Infrastructure Loan
27 Program, as a one-time appropriation:
28 • from the General Fund Restricted -- Municipal Infrastructure Fund Restricted
29 Account, One-time, $69,000,000.
30 Other Special Clauses:
31 None
32 Utah Code Sections Affected:
33 AMENDS:
34 63B-1b-202, as last amended by Laws of Utah 2017, Chapter 345
35 ENACTS:
36 63N-3-601, Utah Code Annotated 1953
37 63N-3-602, Utah Code Annotated 1953
38 63N-3-603, Utah Code Annotated 1953
39 63N-3-604, Utah Code Annotated 1953
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41 Be it enacted by the Legislature of the state of Utah:
42 Section 1. Section 63B-1b-202 is amended to read:
43 63B-1b-202. Custodial officer -- Powers and duties.
44 (1) (a) There is created within the Division of Finance an officer responsible for the
45 care, custody, safekeeping, collection, and accounting of all bonds, notes, contracts, trust
46 documents, and other evidences of indebtedness:
47 (i) owned or administered by the state or any of its agencies; and
48 (ii) except as provided in Subsection (1)(b), relating to revolving loan funds.
49 (b) Notwithstanding Subsection (1)(a), the officer described in Subsection (1)(a) is not
50 responsible for the care, custody, safekeeping, collection, and accounting of a bond, note,
51 contract, trust document, or other evidence of indebtedness relating to the:
52 (i) Agriculture Resource Development Fund, created in Section 4-18-106;
53 (ii) Utah Rural Rehabilitation Fund, created in Section 4-19-105;
54 (iii) Petroleum Storage Tank Trust Fund, created in Section 19-6-409;
55 (iv) Olene Walker Housing Loan Fund, created in Section 35A-8-502; [
56 (v) Brownfields Fund, created in Section 19-8-120[
57 (vi) Municipal Infrastructure Fund, created in Section 63N-3-602.
58 (2) (a) Each authorizing agency shall deliver to this officer for the officer's care,
59 custody, safekeeping, collection, and accounting all bonds, notes, contracts, trust documents,
60 and other evidences of indebtedness:
61 (i) owned or administered by the state or any of its agencies; and
62 (ii) except as provided in Subsection (1)(b), relating to revolving loan funds.
63 (b) This officer shall:
64 (i) establish systems, programs, and facilities for the care, custody, safekeeping,
65 collection, and accounting for the bonds, notes, contracts, trust documents, and other evidences
66 of indebtedness submitted to the officer under this Subsection (2); and
67 (ii) shall make available updated reports to each authorizing agency as to the status of
68 loans under their authority.
69 (3) The officer described in Section 63B-1b-201 shall deliver to the officer described in
70 Subsection (1)(a) for the care, custody, safekeeping, collection, and accounting by the officer
71 described in Subsection (1)(a) of all bonds, notes, contracts, trust documents, and other
72 evidences of indebtedness closed as provided in Subsection 63B-1b-201(2)(b).
73 Section 2. Section 63N-3-601 is enacted to read:
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75 63N-3-601. Definitions.
76 As used in this part:
77 (1) "Fund" means the Municipal Infrastructure Fund created in Section 63N-3-602.
78 (2) "Infrastructure asset" means a physical asset that provides or supports an essential
79 public service.
80 (3) "Infrastructure loan" means a loan of money from the fund to finance an
81 infrastructure project.
82 (4) "Infrastructure project" means a project to build or improve one or more
83 infrastructure assets for a municipality, including:
84 (a) telecom and high-speed Internet infrastructure;
85 (b) power and energy infrastructure;
86 (c) water and sewerage infrastructure;
87 (d) healthcare infrastructure; or
88 (e) other infrastructure as defined by rule made by the office in accordance with Title
89 63G, Chapter 3, Utah Administrative Rulemaking Act.
90 (5) (a) "Rural municipality" means a city or town in a county of the third, fourth, fifth,
91 or sixth class.
92 (b) "Rural municipality" may include an unincorporated area of a county of the third,
93 fourth, fifth, or sixth class.
94 Section 3. Section 63N-3-602 is enacted to read:
95 63N-3-602. Municipal Infrastructure Fund -- Creation -- Use of money.
96 (1) There is created a restricted account within the General Fund known as the
97 Municipal Infrastructure Fund.
98 (2) The fund consists of money from the following sources:
99 (a) appropriations made to the fund by the Legislature;
100 (b) federal money and grants that are deposited into the fund;
101 (c) contributions and grants from any private or public sources for deposit into the
102 fund; and
103 (d) all money collected from the repayment of fund money used for an infrastructure
104 loan.
105 (3) (a) The fund shall earn interest.
106 (b) All interest earned on money in the fund shall be deposited into the fund.
107 (4) Money in the fund may only be used by the office to:
108 (a) provide infrastructure loans to rural municipalities; and
109 (b) pay for the office's costs in administering the fund, including costs related to
110 providing infrastructure loans, monitoring infrastructure projects, and obtaining repayments of
111 infrastructure loans.
112 (5) The office may establish separate accounts in the fund for infrastructure loans,
113 administrative and operating expenses, or any other purpose to implement this part.
114 (6) Money in the fund shall be invested by the state treasurer as provided in Title 51,
115 Chapter 7, State Money Management Act, and the earnings from the investments shall be
116 credited to the fund.
117 (7) The office shall include in the annual written report described in Section
118 63N-1-301, a report of how money from the fund was used, including information regarding all
119 infrastructure projects funded by loans from the fund.
120 Section 4. Section 63N-3-603 is enacted to read:
121 63N-3-603. Infrastructure loans -- Authority -- Rulemaking.
122 (1) Money in the fund may be used by the office to make infrastructure loans to any
123 rural municipality for any purpose consistent with the provisions of this part.
124 (2) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
125 office shall make rules providing procedures and standards for making infrastructure loans,
126 including application requirements and a process for prioritizing applications.
127 (3) The prioritization process, procedures, and standards for making an infrastructure
128 loan may include consideration of the following:
129 (a) the availability of money in the fund;
130 (b) the credit worthiness of the infrastructure project, including the identification of a
131 dedicated source of revenue to repay the infrastructure loan;
132 (c) the amount of expected economic and other benefits to the rural municipality from
133 the infrastructure project when compared to the cost of the infrastructure project;
134 (d) the amount of money from other sources being contributed to the infrastructure
135 project; and
136 (e) a municipality's difficulty in obtaining or qualifying for complete funding with
137 reasonable repayment options from other sources.
138 Section 5. Section 63N-3-604 is enacted to read:
139 63N-3-604. Loan program procedures -- Repayment.
140 (1) A rural municipality may obtain an infrastructure loan from the office by entering
141 into a loan contract with the office secured by legally issued bonds, notes, or other evidence of
142 indebtedness validly issued under state law, including pledging all or any portion of a revenue
143 source controlled by the rural municipality to the repayment of the loan.
144 (2) A loan from the fund shall bear interest at a rate:
145 (a) not less than bond market interest rates available to the state; and
146 (b) not more than .5% above bond market interest rates available to the state.
147 (3) A rural municipality shall begin repayment of a loan no later than the date of
148 completion of the infrastructure project.
149 (4) An infrastructure loan contract with a rural municipality may provide that a portion
150 of the proceeds of the loan may be applied to fund a reserve fund to secure the repayment of the
151 loan.
152 (5) Before obtaining an infrastructure loan, a rural municipality shall:
153 (a) publish the rural municipality's intention to obtain an infrastructure loan at least
154 once in accordance with the publication and notice requirements described in Section
155 11-14-316; and
156 (b) adopt an ordinance or resolution authorizing the infrastructure loan.
157 (6) (a) If a rural municipality fails to comply with the terms of the rural municipality's
158 infrastructure loan contract, the office may seek any legal or equitable remedy to obtain
159 compliance or payment of damages.
160 (b) If a rural municipality fails to make infrastructure loan payments when due, the
161 state shall, at the request of the office, withhold an amount of money due to the rural
162 municipality and deposit the withheld money into the fund to pay the amount due under the
163 contract.
164 (c) The office may elect when to take any action or request the withholding of money
165 under this Subsection (6).
166 (7) All loan contracts, bonds, notes, or other evidence of indebtedness securing any
167 infrastructure loans shall be collected and accounted for in accordance with Section
168 63B-1b-202.
169 Section 6. Appropriation.
170 The following sums of money are appropriated for the fiscal year beginning July 1,
171 2021, and ending June 30, 2022. These are additions to amounts previously appropriated for
172 fiscal year 2022.
173 Subsection 6(a). Restricted Fund and Account Transfers.
174 The Legislature authorizes the State Division of Finance to transfer the following
175 amounts between the following funds or accounts as indicated. Expenditures and outlays from
176 the funds to which the money is transferred must be authorized by an appropriation.
177 ITEM 1
178 To General Fund Restricted -- Municipal Infrastructure Fund Restricted Account
179 From General Fund, One-time
$69,000,000
180 Schedule of Programs:
181 General Fund Restricted -- Municipal Infrastructure Fund
182 Restricted Account $69,000,000
183 Subsection 6(b). Operating and Capital Budgets.
184 Under the terms and conditions of Title 63J, Chapter 1, Budgetary Procedures Act, the
185 Legislature appropriates the following sums of money from the funds or accounts indicated for
186 the use and support of the government of the state of Utah.
187 ITEM 2
188 To Governor's Office of Economic Development
189 From General Fund Restricted -- Municipal Infrastructure Fund
190 Restricted Account, One-time
$69,000,000
191 Schedule of Programs:
192 Municipal Infrastructure Loan Program $69,000,000
193 The Legislature intends that, under Section 63J-1-603 of the Utah Code, appropriations
194 under this section not lapse at the close of Fiscal Year 2022.