1     
STATE FINANCE REVIEW COMMISSION AMENDMENTS

2     
2023 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Jeffrey D. Stenquist

5     
Senate Sponsor: Jerry W. Stevenson

6     

7     LONG TITLE
8     General Description:
9          This bill modifies provisions related to the State Finance Review Commission and
10     bonding requirements.
11     Highlighted Provisions:
12          This bill:
13          ▸     modifies definitions;
14          ▸     requires that any entity with bonding authority obtain the approval of the State
15     Finance Review Commission before entering into certain concessionaire
16     agreements; and
17          ▸     makes technical corrections.
18     Money Appropriated in this Bill:
19          None
20     Other Special Clauses:
21          None
22     Utah Code Sections Affected:
23     AMENDS:
24          63C-25-101, as enacted by Laws of Utah 2022, Chapter 207 and last amended by
25     Coordination Clause, Laws of Utah 2022, Chapter 207
26          63C-25-202, as enacted by Laws of Utah 2022, Chapter 207
27          63N-13-302, as last amended by Laws of Utah 2022, Chapter 240
28          63N-13-306, as last amended by Laws of Utah 2022, Chapters 207, 240
29     

30     Be it enacted by the Legislature of the state of Utah:
31          Section 1. Section 63C-25-101 is amended to read:
32          63C-25-101. Definitions.
33          As used in this chapter:
34          (1) "Authority" means the same as that term is defined in Section 63B-1-303.
35          (2) "Bond" means the same as that term is defined in Section 63B-1-101.
36          (3) (a) "Bonding government entity" means the state or any entity that is authorized to
37     issue bonds under any provision of state law.
38          (b) "Bonding government entity" includes:
39          (i) a bonding political subdivision; and
40          (ii) a public infrastructure district that is authorized to issue bonds either directly, or
41     through the authority of a bonding political subdivision or other governmental entity.
42          [(3)] (4) "Bonding political subdivision" means:
43          (a) the Utah Inland Port Authority, created in Section 11-58-201;
44          (b) the Military Installation Development Authority, created in Section 63H-1-201;
45          (c) the Point of the Mountain State Land Authority, created in Section 11-59-201; or
46          (d) the Utah Lake Authority, created in Section 11-65-201.
47          [(4)] (5) "Commission" means the State Finance Review Commission created in
48     Section 63C-25-201.
49          [(5)] (6) "Concessionaire" means a person who:
50          (a) operates, finances, maintains, or constructs a government facility under a contract
51     with a bonding political subdivision; and
52          (b) is not a bonding [political subdivision] government entity.
53          (7) "Concessionaire contract" means a contract:
54          (a) between a bonding government entity and a concessionaire for the operation,
55     finance, maintenance, or construction of a government facility;
56          (b) that authorizes the concessionaire to operate the government facility for a term of
57     five years or longer, including any extension of the contract; and
58          (c) in which all or some of the annual source of payment to the concessionaire comes
59     from state funds provided to the bonding government entity.
60          [(6)] (8) "Creating entity" means the same as that term is defined in Section
61     17D-4-102.
62          [(7)] (9) "Government facility" means infrastructure, improvements, or a building that:
63          (a) costs more than $5,000,000 to construct; and
64          (b) has a useful life greater than five years.
65          [(8)] (10) "Large public transit district" means the same as that term is defined in
66     Section 17B-2a-802.
67          [(9)] (11) "Loan entity" means the board, person, unit, or agency with legal
68     responsibility for making a loan from a revolving loan fund.
69          [(10)] (12) "Obligation" means the same as that term is defined in Section 63B-1-303.
70          [(11)] (13) "Parameters resolution" means a resolution of a bonding [political
71     subdivision, or public infrastructure district created by a bonding political subdivision,]
72     government entity that sets forth for proposed bonds:
73          (a) the maximum:
74          (i) amount of bonds;
75          (ii) term; and
76          (iii) interest rate; and
77          (b) the expected security for the bonds.
78          [(12)] (14) "Public infrastructure district" means a public infrastructure district created
79     under Title 17D, Chapter 4, Public Infrastructure District Act.
80          [(13) "Public-private partnership" means a contract:]
81          [(a) between a bonding political subdivision and a concessionaire for the operation,
82     finance, maintenance, or construction of a government facility;]
83          [(b) that authorizes the concessionaire to operate the government facility for a term of
84     five years or longer, including any extension of the contract; and]
85          [(c) in which all or some of the annual source of payment to the concessionaire comes
86     from state funds provided to the bonding political subdivision.]
87          [(14)] (15) "Revolving loan fund" means:
88          (a) the Water Resources Conservation and Development Fund, created in Section
89     73-10-24;
90          (b) the Water Resources Construction Fund, created in Section 73-10-8;
91          (c) the Water Resources Cities Water Loan Fund, created in Section 73-10-22;
92          (d) the Clean Fuel Conversion Funds, created in [Title 19, Chapter 1, Part 4, Clean
93     Fuels and Vehicle Technology Program Act] Title 19, Chapter 1, Part 4, Clean Fuels and
94     Emission Reduction Technology Program Act;
95          (e) the Water Development Security Fund and its subaccounts, created in Section
96     73-10c-5;
97          (f) the Agriculture Resource Development Fund, created in Section 4-18-106;
98          (g) the Utah Rural Rehabilitation Fund, created in Section 4-19-105;
99          (h) the Permanent Community Impact Fund, created in Section 35A-8-303;
100          (i) the Petroleum Storage Tank Fund, created in Section 19-6-409;
101          (j) the School Building Revolving Account, created in Section 53F-9-206;
102          (k) the State Infrastructure Bank Fund, created in Section 72-2-202;
103          (l) the Uintah Basin Revitalization Fund, created in Section 35A-8-1602;
104          (m) the Navajo Revitalization Fund, created in Section 35A-8-1704;
105          (n) the Energy Efficiency Fund, created in Section 11-45-201;
106          (o) the Brownfields Fund, created in Section 19-8-120;
107          (p) the following enterprise revolving loan funds created in Section 63A-3-402:
108          (i) the inland port infrastructure revolving loan fund;
109          (ii) the point of the mountain infrastructure revolving loan fund; or
110          (iii) the military development infrastructure revolving loan fund; and
111          (q) any other revolving loan fund created in statute where the borrower from the
112     revolving loan fund is a public non-profit entity or political subdivision, including a fund listed
113     in Section 63A-3-205, from which a loan entity is authorized to make a loan.
114          [(15)] (16) (a) "State funds" means an appropriation by the Legislature identified as
115     coming from the General Fund or Education Fund.
116          (b) "State funds" does not include:
117          (i) a revolving loan fund; or
118          (ii) revenues received by a bonding political subdivision from:
119          (A) a tax levied by the bonding political subdivision;
120          (B) a fee assessed by the bonding political subdivision; or
121          (C) operation of the bonding political subdivision's government facility.
122          Section 2. Section 63C-25-202 is amended to read:
123          63C-25-202. Powers and duties.
124          (1) The commission shall annually review a report provided in accordance with Section
125     63B-1-305 or 63B-1a-102.
126          (2) (a) A loan entity other than a loan entity described in Subsection (2)(b) shall no
127     later than January 1 of each year submit information on each revolving loan fund from which
128     the loan entity made a loan in the previous fiscal year, including information identifying new
129     and ongoing loan recipients, the terms of each loan, loan repayment, and any other information
130     regarding a revolving loan fund requested by the commission.
131          (b) If a loan entity is:
132          (i) the Utah Inland Port Authority, the loan entity shall submit the information in
133     accordance with Section 11-58-106 and any other information regarding a revolving loan fund
134     requested by the commission;
135          (ii) the Point of the Mountain State Land Authority, the loan entity shall submit the
136     information in accordance with Section 11-59-104 and any other information regarding a
137     revolving loan fund requested by the commission; or
138          (iii) the Military Installation Development Authority, the loan entity shall submit the
139     information in accordance with Section 63H-1-104 and any other information regarding a
140     revolving loan fund requested by the commission.
141          (c) The commission may annually review and provide feedback for the following:
142          (i) each loan entity for compliance with state law authorizing and regulating the
143     revolving loan fund, including, as applicable, Title 11, Chapter 14, Local Government Bonding
144     Act;
145          (ii) each loan entity's revolving loan fund policies and practices, including policies and
146     practices for approving and setting the terms of a loan; and
147          (iii) each borrower of funds from a revolving loan fund for accurate and timely
148     reporting by the borrower to the appropriate debt repository.
149          (3) (a) The commission shall review and may approve a bond before a large public
150     transit district may issue a bond.
151          (b) The commission may not approve issuance of a bond described in Subsection (3)(a)
152     unless the execution and terms of the bond comply with state law.
153          (c) If, after review, the commission approves a bond described in Subsection (3)(a), the
154     large public transit district:
155          (i) may not change before issuing the bond the terms of the bond that were reviewed by
156     the commission if the change is outside the approved parameters and intended purposes; and
157          (ii) is under no obligation to issue the bond.
158          (d) A member of the commission who approves a bond under Subsection (3)(a) or
159     reviews a parameters resolution under Subsection (4)(a) is not liable personally on the bond.
160          (e) The approval of a bond under Subsection (3)(a) or review under Subsection (4)(a)
161     of a parameters resolution by the commission:
162          (i) is not an obligation of the state; and
163          (ii) is not an act that:
164          (A) lends the state's credit; or
165          (B) constitutes indebtedness within the meaning of any constitutional or statutory debt
166     limitation.
167          (4) (a) The commission shall review and, at the commission's discretion, may make
168     recommendations regarding a parameters resolution before:
169          (i) a bonding political subdivision may issue a bond; or
170          (ii) a public infrastructure district may issue a bond, if the creating entity of the public
171     infrastructure district is a bonding political subdivision.
172          (b) The commission shall conduct the review under Subsection (4)(a) and forward any
173     recommendations to the bonding political subdivision or public infrastructure district no later
174     than 45 days after the day on which the commission receives the bonding political subdivision's
175     or public infrastructure district's parameters resolution.
176          (c) Notwithstanding Subsection (4)(a), if the commission fails to review a parameters
177     resolution or forward recommendations, if any, in the timeframe described in Subsection
178     (4)(b), the bonding political subdivision or public infrastructure district, respectively, may
179     proceed with the bond without review by the commission.
180          (d) After review by the commission under Subsection (4)(a), the bonding political
181     subdivision or public infrastructure district:
182          (i) shall consider recommendations by the commission; and
183          (ii) may proceed with the bond but is under no obligation to issue the bond.
184          (5) The commission shall provide training and other information on debt management,
185     lending and borrowing best practices, and compliance with state law to the authority, a bonding
186     political subdivision, a large public transit district, and a loan entity.
187          (6) (a) [If a public-private partnership contemplates payments from state funds, the
188     commission shall review and may approve the public-private partnership before a bonding
189     political subdivision may enter into the public-private partnership.] Before a bonding
190     government entity may enter into a concessionaire contract, the commission shall review and
191     approve the concessionaire contract.
192          (b) If, after review, the commission approves the [public-private partnership described
193     in Subsection (6)(a)] concessionaire contract, the bonding [political subdivision] government
194     entity:
195          (i) may not change the terms of the [public-private partnership] concessionaire contract
196     if the change is outside [the] of:
197          (A) any applicable approved parameters [and] of the concessionaire contract; or
198          (B) the intended purposes of the concessionaire contract; and
199          (ii) is under no obligation to enter into the [public-private partnership] concessionaire
200     contract.
201          Section 3. Section 63N-13-302 is amended to read:
202          63N-13-302. Definitions.
203          As used in this part:
204          (1) "Bonding government entity" means the same as that term is defined in Section
205     63C-25-101.
206          (2) "Concessionaire contract" means the same as that term is defined in Section
207     63C-25-101.
208          (3) "Facilitator" means:
209          (a) the office, if the office chooses to perform itself the functions and responsibilities
210     described in Section 63N-13-304; or
211          (b) a person engaged by the office to perform the functions and responsibilities
212     described in Section 63N-13-304, if the office chooses to have those functions and
213     responsibilities performed by a person other than the office.
214          [(2)] (4) "Government entity" means:
215          (a) the state or any department, division, agency, or other instrumentality of the state;
216     or
217          (b) a political subdivision of the state.
218          [(3)] (5) "Public-private partnership" means an arrangement or agreement between a
219     government entity and one or more private persons to fund and provide for a public need
220     through the development or operation of a public project in which the private person or persons
221     share with the government entity the responsibility or risk of developing, owning, maintaining,
222     financing, or operating the project.
223          Section 4. Section 63N-13-306 is amended to read:
224          63N-13-306. Limits on application of this part -- Concessionaire contract.
225          (1) Nothing in this part:
226          (a) requires a government entity to use the facilitator to explore the possibility of filling
227     a public need through a public-private partnership; or
228          (b) limits the ability of a government entity to directly:
229          (i) solicit a public-private partnership; or
230          (ii) respond to a private person exploring an investment opportunity in a public project
231     through a public-private partnership.
232          [(2) (a) As used in this Subsection (2):]
233          [(i) "Bonding political subdivision" means the same as that term is defined in Section
234     63C-25-101.]
235          [(ii) "Public-private partnership" means the same as that term is defined in Section
236     63C-25-101.]
237          [(b)] (2) A facilitator shall inform a bonding [political subdivision] government entity
238     that is contemplating entering into a [public-private partnership] concessionaire contract that
239     the bonding [political subdivision] government entity may not enter into the [public-private
240     partnership] concessionaire contract unless the bonding [political subdivision] government
241     entity first receives approval from the State Finance Review Commission in accordance with
242     Section 63C-25-202.
243          (3) A government entity anticipating the possibility of entering into a public-private
244     partnership or a concessionaire contract is encouraged to consult with and take advantage of the
245     expertise of the facilitator as the government entity determines:
246          (a) whether to enter into the public-private partnership or the concessionaire contract;
247     and
248          (b) the best way to structure the public-private partnership or the concessionaire
249     contract.