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H.B. 227
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COMMUNITY AND ECONOMIC DEVELOPMENT
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AMENDMENTS
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2000 GENERAL SESSION
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STATE OF UTAH
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Sponsor: Wayne A. Harper
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AN ACT RELATING TO COMMUNITY AND ECONOMIC DEVELOPMENT; REPEALING
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THE CAPITAL ACCESS FUND; EXPANDING SCOPE OF THE COMMUNITY ECONOMIC
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DEVELOPMENT PROJECT FUND; AMENDING THE ALLOCATION OF THE PRIVATE
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ACTIVITY BOND VOLUME CAP; PROVIDING FOR THE DISPOSITION OF MONEYS IN
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THE CAPITAL ACCESS FUND; TRANSFERRING UP TO $100,000 FROM THE CAPITAL
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ACCESS FUND TO THE COMMUNITY ECONOMIC DEVELOPMENT FUND;
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TRANSFERRING BALANCE OF THE FUND TO THE DEPARTMENT OF COMMUNITY
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AND ECONOMIC DEVELOPMENT FOR USE IN THE CUSTOM FIT TRAINING
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PROGRAM; AND MAKING TECHNICAL CHANGES.
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This act affects sections of Utah Code Annotated 1953 as follows:
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AMENDS:
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9-2-1501, as enacted by Chapter 301, Laws of Utah 1996
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9-2-1502, as last amended by Chapter 391, Laws of Utah 1998
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9-2-1504, as last amended by Chapter 391, Laws of Utah 1998
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9-2-1505, as enacted by Chapter 301, Laws of Utah 1996
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9-2-1506, as last amended by Chapter 391, Laws of Utah 1998
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9-4-506, as last amended by Chapters 192 and 208, Laws of Utah 1997
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REPEALS:
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9-2-1301, as renumbered and amended by Chapter 241, Laws of Utah 1992
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9-2-1302, as last amended by Chapter 206, Laws of Utah 1993
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9-2-1303, as last amended by Chapter 76, Laws of Utah 1999
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9-2-1304, as last amended by Chapter 6, Laws of Utah 1996
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9-2-1305, as last amended by Chapter 206, Laws of Utah 1993
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9-2-1306, as last amended by Chapter 76, Laws of Utah 1999
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9-2-1307, as repealed and reenacted by Chapter 206, Laws of Utah 1993
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9-2-1308, as repealed and reenacted by Chapter 206, Laws of Utah 1993
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9-2-1309, as renumbered and amended by Chapter 241, Laws of Utah 1992
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9-2-1310, as last amended by Chapter 6, Laws of Utah 1996
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9-2-1311, as last amended by Chapter 76, Laws of Utah 1999
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9-2-1312, as last amended by Chapter 206, Laws of Utah 1993
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Be it enacted by the Legislature of the state of Utah:
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Section 1.
Section
9-2-1501
is amended to read:
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9-2-1501. Title.
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(1) This part is known as the "Community Economic Development Project Fund."
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(2) The purpose of this part is to achieve the critical public purposes of fostering growth
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of the state's economy and creating jobs throughout the state by encouraging:
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(a) local governments and nonprofit economic development organizations to develop
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projects that enhance the economic strengths of their communities; and
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(b) the development of small businesses in Utah.
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Section 2.
Section
9-2-1502
is amended to read:
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9-2-1502. Definitions.
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As used in this part:
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(1) "Administrator" means the Department of Community and Economic Development.
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(2) "Board" means the Board of Business and Economic Development.
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(3) "Fund" means the Community Economic Development Project Fund created in Section
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9-2-1503
.
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(4) "Qualified small business" means a small business that:
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(a) has one or more locations within Utah;
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(b) is of a size that may be eligible for Small Business Administration loans under 13
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C.F.R. 121.101 et seq.; and
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(c) (i) prior to application for a loan or grant under this chapter, has not engaged in
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business activities in Utah except for activities incidental to starting a business; or
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(ii) intends to expand its operations in Utah.
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[(4)] (5) "Rural" means those communities located in the areas of the state defined by the
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board in Title 9, Chapter 2, Part 12, Industrial Assistance Fund, as economically disadvantaged
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rural [targeted] areas.
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[(5)] (6) "Urban" means communities located within a standard metropolitan statistical
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area, as designated by the United States Bureau of the Census.
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Section 3.
Section
9-2-1504
is amended to read:
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9-2-1504. Distribution of fund moneys.
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(1) The administrator shall:
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(a) establish criteria and procedures for the grant and loan process as provided in Title 63,
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Chapter 46a, Utah Administrative Rulemaking Act;
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(b) determine the order in which [projects will be funded] grants or loans will be issued;
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and
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(c) make grants and loans from the fund:
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(i) to any of the entities authorized by Section
9-2-1505
; and
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(ii) in accordance with Subsection (3).
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(2) Two percent of the fund moneys may be used by the executive director for purposes
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consistent with this chapter, including the payment of reasonable loan processing fees, but may not
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be used to offset department or board administrative expenses.
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(3) (a) Fund moneys remaining after distribution as provided in Subsection (2) shall be
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distributed as follows:
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(i) at least 50% of the moneys shall be distributed as loans to be repaid to the fund by the
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entity receiving [them, with] the moneys;
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(ii) at least 50% of [those] the required amount of loans under Subsection (3)(a)(i) shall
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be distributed to:
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(A) communities meeting the requirements for enterprise zones in Section
9-2-404
; or
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(B) a qualified small business located in an enterprise zone under Section
9-2-404
; and
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[(ii)] (iii) moneys not distributed as loans under Subsection (3)(a)(i) shall be distributed
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as grants with:
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(A) [fifty percent] 50% distributed to:
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(I) communities meeting the requirements for enterprise zones in Section
9-2-404
; [and]
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or
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(II) a qualified small business located in an enterprise zone under Section
9-2-404
; and
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(B) [fifty percent] 50% distributed to communities [not meeting the requirements for
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enterprise zones in Section
9-2-404
] or entities that do not meet the requirements of Subsection
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(3)(a)(iii)(A).
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(b) No more than 50% of the fund [monies] moneys distributed as grants or loans under
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Subsection (3)(a) may be distributed to urban areas of the state.
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Section 4.
Section
9-2-1505
is amended to read:
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9-2-1505. Entities authorized to receive fund moneys.
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The administrator, with advice of the board, may make [grants] a grant or [loans] loan to:
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(1) a local [governments] government; [and]
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(2) a regional or statewide nonprofit economic development [organizations.] organization;
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or
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(3) a qualified small business.
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Section 5.
Section
9-2-1506
is amended to read:
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9-2-1506. Application process and priorities.
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(1) For a grant or loan to a qualified small business, the administrator:
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(a) may accept applications for a loan or grant from a qualified small business at any time;
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(b) may not issue a grant or loan to a qualified small business in excess of $15,000; and
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(c) as a condition of issuing the grant or loan, shall require that the qualified small business
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use the grant or loan solely for the acquisition of any of the following intended to have long-term
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beneficial use:
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(i) furniture;
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(ii) fixtures; or
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(iii) equipment.
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(2) For a grant or loan to a local government or regional or statewide nonprofit economic
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development organization, the administrator shall:
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[(1)] (a) (i) [At] at least once in each calendar year that moneys are available from the fund
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for use by the administrator, [the administrator shall] provide notice of a grant and loan application
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period to interested entities[.]; and
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[(b)] (ii) [The administrator shall] accept applications for at least 90 days[.]; and
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[(2)] (b) [The administrator shall] give preference to applications that demonstrate:
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[(a)] (i) substantial leverage with other sources of financing;
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[(b)] (ii) substantial contributions to total project costs, including allied contributions from
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other sources, such as professional, craft and trade services, and community organizations;
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[(c)] (iii) substantial local government project contributions in the form of infrastructure
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improvements or other assistance;
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[(d)] (iv) projects that encourage ownership, management, and other project-related
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opportunities;
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[(e)] (v) projects that demonstrate a strong probability of serving the original target group
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or income level for a period of at least 15 years;
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[(f)] (vi) projects where the applicant has demonstrated the ability, stability, and resources
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to complete the project;
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[(g)] (vii) projects that appear to serve the greatest need of the target group;
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[(h)] (viii) projects that demonstrate economic development benefits for the state;
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[(i)] (ix) projects that allow integration into a local government economic development
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plan;
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[(j)] (x) projects or businesses located in any part of the state that create new jobs in or
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measurable positive economic impact on a rural area;
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[(k)] (xi) projects or programs [which] that require specialized training; and
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[(l)] (xii) recreational or cultural projects [which] that enhance the economic vitality of or
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tourism in a community.
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Section 6.
Section
9-4-506
is amended to read:
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9-4-506. Allotment accounts.
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(1) There are created the following allotment accounts:
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(a) the Single Family Housing Account, for which eligible issuing authorities are those
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authorized under the code and state statute to issue qualified mortgage bonds under Section 143
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of the code;
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(b) the Student Loan Account, for which eligible issuing authorities are those authorized
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under the code and state statute to issue qualified student loan bonds under Section 144(b) of the
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code;
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(c) the Small Issue Bond Account, for which eligible issuing authorities are those
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authorized under the code and state statute to issue:
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(i) qualified small issue bonds under Section 144(a) of the code; or
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(ii) qualified exempt facility bonds for qualified residential rental projects under Section
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142(d) of the code;
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(d) the Exempt Facilities Account, for which eligible issuing authorities are those
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authorized under the code and state statute to issue bonds requiring an allocation of volume cap
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other than for purposes described in Subsections (1)(a), (b), or (c);
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(e) the Pool Account, for which eligible issuing authorities are those authorized under the
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code and state statute to issue bonds requiring an allocation of volume cap; and
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(f) the Carryforward Account, for which eligible issuing authorities are those with projects
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or programs qualifying under Section 146(f) of the code.
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(2) (a) The volume cap shall be distributed to the various allotment accounts on January
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1 of each year on the following basis:
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(i) [42%] 40% to the Single Family Housing Account;
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(ii) [33%] 31% to the Student Loan Account;
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(iii)1% to the Exempt Facilities Account; and
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(iv) [24%] 28% to the Small Issue Bond Account.
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(b) From July 1 to September 30 of each year, the board of review may transfer any
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unallocated volume cap from the Exempt Facilities Account or the Small Issue Bond Account to
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the Pool Account.
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(c) The board of review, upon written notification by the issuing authorities eligible for
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volume cap allocation from the Single Family Housing Account or the Student Loan Account that
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all or a portion of volume cap distributed into that allotment account will not be used, may transfer
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the unused volume cap between the Single Family Housing Account and the Student Loan
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Account.
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(d) From October 1 to the third Friday of December of each year, all unallocated volume
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cap shall be transferred into the Pool Account.
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(e) Unallocated volume cap or allocated volume cap for which bonds have not been issued
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prior to the third Saturday of December shall be transferred on that date into the Carryforward
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Account.
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(f) If the authority to issue bonds designated in any allotment account is rescinded by
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amendment to the code, the board of review may transfer any unallocated volume cap from [such]
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that allotment account to any other allotment account.
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Section 7. Repealer.
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This act repeals:
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Section 9-2-1301, Short title.
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Section 9-2-1302, Definitions.
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Section 9-2-1303, Utah Capital Access Fund.
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Section 9-2-1304, Lender's fund reserve accounts.
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Section 9-2-1305, Conditions for match -- Special loan portfolios.
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Section 9-2-1306, Premiums -- Administrative costs -- Transfers.
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Section 9-2-1307, Enrolling.
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Section 9-2-1308, Loan losses -- Claims.
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Section 9-2-1309, Restrictions on loans.
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Section 9-2-1310, Termination -- Withdrawal.
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Section 9-2-1311, Reports -- Audits.
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Section 9-2-1312, State agency support.
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Section 8. Disposition of the Capital Access Fund.
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(1) As used in this section:
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(a) "Capital Access Act" means Title 9, Chapter 2, Part 13, Utah Capital Access Act;
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(b) "corporation" means the Utah Technology Finance Corporation;
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(c) "fund" means the Capital Access Fund;
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(d) "fund balance" means an amount calculated by subtracting from the total amount in
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the fund as of the last day of the state's fiscal year 1999-2000, the monies obligated under
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Subsection (3) for pre-repeal loans;
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(e) "participating lender" has the same meaning as under Section 9-2-1302; and
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(f) "pre-repeal loan" means a loan enrolled by the corporation under the Capital Access
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Act:
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(i) before May 1, 2000; or
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(ii) in accordance with Subsection (2)(b).
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(2) (a) Except as provided in Subsection (2)(b) and notwithstanding the notice
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requirements of Section
9-2-1310
, the corporation may not enroll a loan under the Capital Access
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Act on or after May 1, 2000.
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(b) The corporation may enroll a loan under the Capital Access Act on or after May 1,
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2000 but no later than June 30, 2000 if:
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(i) the loan is issued by a participating lender who is a participating lender on or before
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June 30, 2000;
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(ii) the application for the loan is filed with the participating lender on or before May 10,
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2000; and
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(iii) the participating lender shows that it did not receive notice of the termination of the
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corporation's authority to enroll a loan prior to the date the loan was issued.
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(c) The corporation shall notify each participating lender by no later than May 10, 2000
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of the termination of the corporation's authority under the Capital Access Act to enroll loans.
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(3) (a) Notwithstanding the repeal of the Capital Access Act and the termination of the
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corporation's authority to enroll a loan, for each participating lender that holds a pre-repeal loan:
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(i) the Capital Access Act in effect as of April 30, 1999, shall apply to the pre-repeal loan;
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(ii) the corporation shall maintain the participating lender's fund reserve account for the
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life of the pre-repeal loan; and
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(iii) the state treasurer shall maintain a separate state fund reserve account within the fund
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in accordance with the Capital Access Act for the life of the pre-repeal loans held by the
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participating lender.
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(b) Notwithstanding Subsection (3)(a), if a loan described in Subsection (3)(a) is
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refinanced, the amount of the loan covered under the Capital Access Act may not be increased
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beyond the amount of the loan on the later of:
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(i) May 1, 2000; or
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(ii) the date the loan is enrolled by the corporation.
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(4) By no later than 90 days after fiscal year 1999-2000, the Division of Finance shall
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transfer from the fund:
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(a) to the Community Economic Development Project Fund created in Section
9-2-1503
,
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an amount equal to the lesser of:
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(i) the fund balance; or
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(ii) $100,000; and
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(b) if the fund balance exceeds $100,000, to the Department of Community and Economic
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Development for use in the custom-fit-training program that the Department of Community and
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Economic Development administers, an amount equal to the difference between:
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(i) the fund balance; and
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(ii) the funds transferred under Subsection (4)(a).
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(5) The Division of Finance shall notify the Business, Labor, and Economic Development
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Interim Committee by no later than the committee's November interim meeting:
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(a) that the transfers required under Subsection (4) have been made; and
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(b) the amount of each transfer required under Subsection (4).
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(6) When moneys obligated under Subsection (3) are no longer obligated under the Capital
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Access Act, the state treasurer shall transfer the moneys including any interest on the moneys to
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the corporation.
Legislative Review Note
as of 1-13-00 9:38 AM
A limited legal review of this legislation raises no obvious constitutional or statutory concerns.