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H.B. 38
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SCHOOL BUILDINGS - STUDENT CAPACITY
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LIMITS
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2000 GENERAL SESSION
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STATE OF UTAH
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Sponsor: David N. Cox
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AN ACT RELATING TO PUBLIC SCHOOLS; PROVIDING FOR A CAPITAL FACILITIES
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PROGRAM THAT WOULD REQUIRE NEW PUBLIC SCHOOLS TO BE BUILT TO
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ACCOMMODATE NO MORE THAN 600 STUDENTS AT THE ELEMENTARY AND
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MIDDLE SCHOOL LEVEL, NO MORE THAN 800 STUDENTS AT THE JUNIOR HIGH
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LEVEL, AND NO MORE THAN 1,000 STUDENTS AT THE HIGH SCHOOL LEVEL;
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PROVIDING FOR EXCEPTIONS; PROVIDING FOR THE ISSUANCE OF $200,000,000 IN
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GENERAL OBLIGATION BONDS TO HELP FUND THE PROGRAM; PROVIDING
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STUDENT CAPACITY REQUIREMENTS FOR EXISTING BUILDINGS; AND PROVIDING
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AN EFFECTIVE DATE.
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This act affects sections of Utah Code Annotated 1953 as follows:
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ENACTS:
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53A-20-103.5, Utah Code Annotated 1953
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63B-9-101, Utah Code Annotated 1953
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63B-9-102, Utah Code Annotated 1953
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63B-9-103, Utah Code Annotated 1953
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63B-9-104, Utah Code Annotated 1953
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63B-9-105, Utah Code Annotated 1953
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63B-9-106, Utah Code Annotated 1953
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63B-9-107, Utah Code Annotated 1953
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63B-9-108, Utah Code Annotated 1953
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63B-9-109, Utah Code Annotated 1953
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63B-9-110, Utah Code Annotated 1953
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63B-9-111, Utah Code Annotated 1953
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63B-9-112, Utah Code Annotated 1953
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63B-9-113, Utah Code Annotated 1953
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63B-9-114, Utah Code Annotated 1953
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63B-9-115, Utah Code Annotated 1953
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63B-9-116, Utah Code Annotated 1953
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63B-9-117, Utah Code Annotated 1953
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Be it enacted by the Legislature of the state of Utah:
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Section 1.
Section
53A-20-103.5
is enacted to read:
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53A-20-103.5. School building capacity -- Exceptions.
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(1) Beginning July 1, 2000, local school boards shall provide for the construction of school
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buildings to accommodate the following number of students:
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(a) no more than 600 students for elementary and middle schools, as defined by State
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Board of Education rule;
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(b) no more than 800 students for junior high schools; and
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(c) no more than 1,000 students for high schools.
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(2) The State Bonding Commission shall issue general obligation bonds under Title 63B,
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Chapter 9, 2000 Public Education Capital Facilities General Obligation Bonds, to assist local
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school boards in meeting the requirements of Subsection (1).
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(3) The State Board of Education shall make rules:
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(a) for the distribution of monies received from the issuance of bonds under Title 63B,
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Chapter 9 to local school boards, giving consideration to both needs and equity in relation to the
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total amount of money received by the state board for distribution to the local boards and based
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on:
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(i) $5,000,000 for the construction of a new elementary or middle school;
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(ii) $12,000,000 for the construction of a new junior high school; and
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(iii) $20,000,000 for the construction of a new high school;
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(b) that would allow a school district to exceed the standards established under Subsection
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(1) for new schools in the event that resources are not available to meet those standards; and
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(c) for the reduction of the number of students in existing school buildings to meet the
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standards established in Subsection (1) or to 3/4 of the original building capacity, whichever is
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greater, by no later than the 2005 school year, unless the district is faced with such tremendous
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student enrollment growth that existing resources would not be sufficient to meet the standards.
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(4) The monies received under this section are in addition to other revenue sources
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authorized by statute for the construction of capital facilities and are made available to promote
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the construction of more effective and efficient facilities.
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Section 2.
Section
63B-9-101
is enacted to read:
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CHAPTER 9. 2000 PUBLIC EDUCATION CAPITAL FACILITIES GENERAL
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OBLIGATION BONDS
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63B-9-101. State Bonding Commission authorized to issue general obligation bonds.
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The commission created under Section
63B-1-201
may issue and sell general obligation
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bonds of the state pledging the full faith, credit, and resources of the state for the payment of the
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principal of and interest on the bonds to provide funds to the State Board of Education.
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Section 3.
Section
63B-9-102
is enacted to read:
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63B-9-102. Maximum amounts -- Projects authorized.
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(1) The total amount of bonds issued under this chapter may not exceed $200,000,000.
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(2) (a) Proceeds from the issuance of bonds shall be provided to the State Board of
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Education to provide funds to school districts to help pay the costs of capital facilities construction
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projects referred to in Section
53A-20-103.5
.
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(b) These costs may include the cost of acquiring land on which to build new schools,
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interest estimated to accrue on the bonds during the period to be covered by the construction of the
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projects plus a period of six months thereafter, and all related engineering, architectural, and legal
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fees.
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(3) The commission may, by resolution, make any statement of intent relating to a
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reimbursement that is necessary or desirable to comply with federal tax law.
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(4) The State Board of Education and local school boards may enter into agreements
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relative to the projects referred to in Subsection (2)(a) prior to the receipt of proceeds of bonds
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issued under this chapter.
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Section 4.
Section
63B-9-103
is enacted to read:
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63B-9-103. Bond proceeds may be used to pay costs of issuance and sale.
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The proceeds of the bonds issued under this chapter shall be used for the purposes
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described in Section
63B-9-102
and to pay all or part of any cost incident to the issuance and sale
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of the bonds, including, without limitation, printing, registration, and transfer costs, legal fees,
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financial advisors' fees, and underwriters' discount.
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Section 5.
Section
63B-9-104
is enacted to read:
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63B-9-104. Manner of issuance -- Amounts, interest, and maturity.
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(1) Bonds issued under this chapter may be authorized, sold, and issued at times and in a
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manner determined by the commission by resolution.
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(2) Bonds may be issued in one or more series, in amounts, and shall bear dates, interest
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rates, including a variable rate, and maturity dates as the commission determines by resolution.
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(3) A bond issued may not mature later than 20 years after the date of final passage of this
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chapter.
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Section 6.
Section
63B-9-105
is enacted to read:
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63B-9-105. Terms and conditions of sale -- Plan of financing -- Signatures --
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Replacement -- Registration -- Federal rebate.
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(1) In the issuance of bonds, the commission may determine by resolution:
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(a) the manner of sale, including public or private sale;
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(b) the terms and conditions of sale, including price, whether at, below, or above face
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value;
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(c) denominations;
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(d) form;
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(e) manner of execution;
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(f) manner of authentication;
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(g) place and medium of purchase;
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(h) redemption terms; and
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(i) other provisions and details it considers appropriate.
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(2) The commission may by resolution adopt a plan of financing which may include terms
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and conditions of arrangements entered into by the commission on behalf of the state with financial
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and other institutions for letters of credit, standby letters of credit, reimbursement agreements, and
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remarketing, indexing, and tender agent agreements to secure the bonds, including payment from
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any legally available source of fees, charges, or other amounts coming due under the agreements
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entered into by the commission.
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(3) (a) Any signature of a public official authorized by resolution of the commission to
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sign the bonds may be a facsimile signature of that official imprinted, engraved, stamped, or
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otherwise placed on the bonds.
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(b) If all signatures of public officials on the bonds are facsimile signatures, provision shall
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be made for a manual authenticating signature on the bonds by or on behalf of a designated
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authentication agent.
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(c) If an official ceases to hold office before delivery of the bonds signed by that official,
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the signature or facsimile signature of the official is nevertheless valid for all purposes.
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(d) A facsimile of the state seal may be imprinted, engraved, stamped, or otherwise placed
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on the bonds.
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(4) (a) The commission may enact resolutions providing for the replacement of lost,
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destroyed, or mutilated bonds, or for the exchange of bonds after issuance for bonds of smaller or
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larger denominations.
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(b) Bonds in changed denominations shall:
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(i) be exchanged for the original bonds in like aggregate principal amounts and in a
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manner that prevents the duplication of interest; and
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(ii) bear interest at the same rate, mature on the same date, and be as nearly as practicable
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in the form of the original bonds.
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(5) (a) Bonds may be registered as to both principal and interest or may be in a book entry
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form under which the right to principal and interest may be transferred only through a book entry.
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(b) The commission may provide for the services and payment for the services of one or
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more financial institutions or other entities or persons, or nominees, within or outside the state, for
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the authentication, registration, transfer, including record, bookkeeping, or book entry functions,
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exchange, and payment of the bonds.
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(c) The records of ownership, registration, transfer, and exchange of the bonds, and of
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persons to whom payment with respect to the obligations is made, are private records as provided
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in Section
63-2-302
or protected records as provided in Section
63-2-304
.
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(d) The bonds and any evidences of participation interest in the bonds may be issued,
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executed, authenticated, registered, transferred, exchanged, and otherwise made to comply with
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Title 15, Chapter 7, Registered Public Obligations Act, or any other act of the Legislature relating
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to the registration of obligations enacted to meet the requirements of Section 149 of the Internal
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Revenue Code of 1986, as amended, or any successor to it, and applicable regulations.
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(6) The commission may:
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(a) by resolution, provide for payment to the United States of such amounts as may be
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necessary to comply with Section 148 (f) of the Internal Revenue Code of 1986, as amended; and
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(b) enter into agreements with financial and other institutions and attorneys to provide for:
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(i) the calculation, holding, and payment of those amounts; and
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(ii) payment from any legally available source of fees, charges, or other amounts coming
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due under any agreements entered into by the commission.
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Section 7.
Section
63B-9-106
is enacted to read:
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63B-9-106. Constitutional debt limitation.
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(1) The commission may not issue bonds under this chapter in an amount that violates the
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limitation described in Utah Constitution Article XIV, Sec. 1.
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(2) For purposes of applying the debt limitation contained in Utah Constitution Article
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XIV, Sec. 1, the value of taxable property in Utah is considered to be 100% of the fair market
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value of the taxable property of the state, as computed from the last assessment for state purposes
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previous to the issuance of the bonds.
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Section 8.
Section
63B-9-107
is enacted to read:
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63B-9-107. Tax levy -- Abatement of tax.
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(1) Each year after issuance of the bonds and until all outstanding bonds are retired, there
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is levied a direct annual tax on all real and personal property within the state subject to state
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taxation, sufficient to pay:
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(a) applicable bond redemption premiums, if any;
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(b) interest on the bonds as it becomes due; and
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(c) principal of the bonds as it becomes due.
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(2) (a) The State Tax Commission shall fix the rate of the direct annual tax levy each year.
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(b) The tax shall be collected and the proceeds applied as provided in this chapter.
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(3) The direct annual tax imposed under this section is abated to the extent money is
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available from sources, other than ad valorem taxes in the sinking fund, for the payment of bond
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interest, principal, and redemption premiums.
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Section 9.
Section
63B-9-108
is enacted to read:
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63B-9-108. Creation of sinking fund.
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(1) There is created a sinking fund to be administered by the state treasurer entitled the
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"2000 Public Education Capital Facilities General Obligation Bonds Sinking Fund."
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(2) All monies deposited in the sinking fund, from whatever source, shall be used to pay
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debt service on the bonds.
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(3) The proceeds of all taxes levied under this chapter are appropriated to this fund.
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(4) The state treasurer may create separate accounts within the sinking fund for each series
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of bonds issued.
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Section 10.
Section
63B-9-109
is enacted to read:
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63B-9-109. Payment of interest, principal, and redemption premiums.
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(1) The Division of Finance shall draw warrants on the state treasury before any interest,
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principal, or redemption premiums become due on the bonds.
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(2) After receipt of the warrants, the state treasurer shall:
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(a) promptly pay from funds within the sinking fund; and
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(b) immediately transmit the amount paid to the paying agent for the bonds.
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Section 11.
Section
63B-9-110
is enacted to read:
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63B-9-110. Investment of sinking fund money.
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(1) The state treasurer may invest any money in the sinking fund in accordance with Title
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51, Chapter 7, State Money Management Act, until it is needed for the purposes for which the fund
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is created.
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(2) Unless otherwise provided in the resolution of the commission authorizing the issuance
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of bonds under this chapter, the treasurer shall retain all income from the investment of any money
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contained in the sinking fund and use it for the payment of debt service on the bonds.
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Section 12.
Section
63B-9-111
is enacted to read:
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63B-9-111. Bond proceeds -- Deposits -- Investment -- Disposition of investment
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income and unexpended proceeds.
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(1) (a) Proceeds from the sale of bonds issued under this chapter shall be deposited within
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one or more accounts as determined by resolution of the commission.
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(b) The state treasurer shall administer and maintain these accounts unless otherwise
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provided by the commission by resolution.
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(c) The commission by resolution may provide for the deposit of these monies with a
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trustee and the administration, disposition, or investment of these monies by this trustee.
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(2) (a) The commission by resolution shall provide for the kinds of investments in which
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the proceeds of bonds issued under this chapter may be invested.
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(b) Income from the investment of proceeds of bonds issued under this chapter shall be
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applied as provided by resolution of the commission.
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(3) Any unexpended bond proceeds issued under this chapter shall be deposited, upon
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completion of the purposes for which the bonds were issued, in the sinking fund, unless otherwise
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provided in the resolution of the commission authorizing the issuance of bonds under this chapter.
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Section 13.
Section
63B-9-112
is enacted to read:
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63B-9-112. Refunding of bonds.
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(1) The commission may provide for the refunding of any of the bonds in accordance with
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Title 11, Chapter 27, Utah Refunding Bond Act.
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(2) For purposes of Title 11, Chapter 27, Utah Refunding Bond Act, the state is considered
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the public body and the commission its governing body.
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Section 14.
Section
63B-9-113
is enacted to read:
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63B-9-113. Certification of satisfaction of conditions precedent -- Conclusiveness.
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(1) The commission may not issue any bond under this chapter until it finds and certifies
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that all conditions precedent to issuance of the bonds have been satisfied.
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(2) A recital on any bond of such a finding and certification conclusively establishes the
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completion and satisfaction of all such conditions.
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Section 15.
Section
63B-9-114
is enacted to read:
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63B-9-114. Tax exemption.
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The bonds issued under this chapter, any interest paid on the bonds, and any income from
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the bonds are not taxable in this state for any purpose, except for the corporate franchise tax.
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Section 16.
Section
63B-9-115
is enacted to read:
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63B-9-115. Legal investment status.
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Bonds issued under this chapter are legal investments for all state trust funds, insurance
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companies, banks, trust companies, and the State School Fund and may be used as collateral to
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secure legal obligations.
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Section 17.
Section
63B-9-116
is enacted to read:
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63B-9-116. Publication of resolution or notice -- Limitation on actions to contest
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legality.
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(1) The commission may:
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(a) publish any resolution it adopts under this chapter once in a newspaper having general
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circulation in Utah; or
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(b) instead of publishing the entire resolution, publish a notice of bonds to be issued, titled
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as such, containing the information called for in Subsection
11-14-21
(3).
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(2) (a) Any interested person, for a 30-day period after the date of publication, may contest:
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(i) the legality of the resolution;
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(ii) any of the bonds authorized under it; or
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(iii) any of the provisions made for the security and repayment of the bonds.
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(b) After 30 days a person may not contest the legality of the resolution, any of the bonds
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authorized under it, or any of the provisions made for the security and repayment of the bonds for
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any cause.
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Section 18.
Section
63B-9-117
is enacted to read:
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63B-9-117. Report to Legislature.
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The governor shall report the commission's proceedings to each annual general session of
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the Legislature in his budget for as long as bonds issued under this chapter remain outstanding.
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Section 19. Effective date.
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This act takes effect on July 1, 2000.
Legislative Review Note
as of 1-7-00 11:03 AM
A limited legal review of this legislation raises no obvious constitutional or statutory concerns.