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H.B. 407
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FINANCIAL ASSISTANCE FOR BUSINESS
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RELOCATION IN RURAL COMMUNITIES
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2000 GENERAL SESSION
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STATE OF UTAH
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Sponsor: Michael R. Styler
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AN ACT RELATING TO COMMUNITY AND ECONOMIC DEVELOPMENT; DEFINING
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TERMS; PROVIDING FOR FINANCIAL ASSISTANCE FROM THE INDUSTRIAL
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ASSISTANCE FUND TO A COMPANY CREATING AN ECONOMIC IMPEDIMENT; AND
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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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9-2-1202, as last amended by Chapter 193, Laws of Utah 1994
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9-2-1204, as renumbered and amended by Chapters 145 and 241, Laws of Utah 1992
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9-2-1205, as last amended by Chapter 335, Laws of Utah 1997
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9-2-1207, as last amended by Chapter 335, Laws of Utah 1997
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ENACTS:
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9-2-1205.5, 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
9-2-1202
is amended to read:
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9-2-1202. 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) "Company creating an economic impediment" means a company that discourages
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economic development within a reasonable radius of its location because of:
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(a) odors;
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(b) noise;
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(c) pollution;
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(d) health hazards; or
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(e) other activities similar to those described in Subsections (3)(a) through (d).
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[(3)] (4) "Economically disadvantaged rural area" means a geographic area designated by
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the board under Section
9-2-1207
.
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[(4)] (5) "Fund" means the restricted account known as the Industrial Assistance Fund
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created in Section
9-2-1203
.
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(6) "Replacement company" means a company locating its business or part of its business
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in a location vacated by a company creating an economic impediment.
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[(5)] (7) "Targeted industry" means an industry or group of industries targeted by the
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board, under Section
9-2-1207
, for economic development in the state.
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Section 2.
Section
9-2-1204
is amended to read:
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9-2-1204. Loans and assistance -- Repayment -- Credits.
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(1) (a) [Any qualifying] A company that qualifies under Section
9-2-1205
may receive
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loans or other financial assistance from the fund for expenses related to establishment, relocation,
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or development of industry in Utah.
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(b) A company creating an economic impediment that qualifies under Section
9-2-1205.5
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may in accordance with this part receive loans or other financial assistance from the fund for the
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expenses of the company creating an economic impediment related to:
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(i) relocation to a rural area in Utah of the company creating an economic impediment; and
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(ii) the siting of a replacement company.
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(2) [The] (a) Subject to Subsection (2)(b), the administrator shall have the authority to
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determine the structure, amount, and nature of any loan or other financial assistance from the fund.
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[Each such]
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(b) The form of financial assistance determined under Subsection (2)(a) shall be structured
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so the intended repayment or return to the state [of Utah], including cash or credit, equals at least
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the amount of the assistance together with an annual interest rate of 10%.
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(3) (a) (i) [The] Except as provided in Subsection (3)(b), the administrator may provide
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for a system of credits that may be used in lieu of cash repayment of a fund loan.
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(ii) The value of [these] the credits described in Subsection (3)(a)(i) shall be based on
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factors determined by the administrator, including:
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(A) the number of Utah jobs created[,];
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(B) the increased economic activity in Utah[,]; and
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(C) other events and activities that occur as a result of the fund loan.
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(b) (i) The administrator shall provide for a system of credits to be used in lieu of cash
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repayment of a fund loan that is issued to a company creating an economic impediment.
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(ii) The value of the credits described in Subsection (3)(b)(i) shall be based on factors
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determined by the administrator, including:
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(A) the number of Utah jobs created;
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(B) the increased economic activity in Utah; and
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(C) other events and activities that occur as a result of the fund loan.
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(4) (a) If loan repayments are in cash, [they] the repayments shall be deposited, including
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any interest, into the fund.
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(b) If the repayments are in the form of credits as provided in Subsection (3), the
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administrator and the Division of Finance shall determine the manner of recognizing and
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accounting for the credits.
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(5) At the end of each fiscal year, after the transfer of surplus General Fund revenues has
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been made to the Budget Reserve Account as provided in Section
63-38-2.5
, any additional
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unrestricted, undesignated General Fund balance, except the first $10,000,000 of additional
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unrestricted, undesignated General Fund balance on June 30, 1992, shall be earmarked to the
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Industrial Assistance Fund in an amount equal to any credit that has accrued under this part. These
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credit amounts may not be used for purposes of the fund as provided in this part until appropriated
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by the Legislature.
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Section 3.
Section
9-2-1205
is amended to read:
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9-2-1205. Qualification for assistance.
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(1) [The] Except as provided in Section
9-2-1205.5
, the administrator shall determine
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which industries, companies, and individuals qualify to receive monies from the fund. Except as
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provided by Subsection (2), to qualify for financial assistance from the fund, an applicant shall:
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(a) demonstrate to the satisfaction of the administrator that the applicant will expend funds
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in Utah with vendors and subcontractors or other businesses in an amount proportional with
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monies provided from the fund at a minimum ratio of 5.7 to 1 per year for a minimum period of
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five years beginning with the date the loan was approved;
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(b) demonstrate to the satisfaction of the administrator that the applicant will expend at
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least $10,000,000 annually in Utah over the base level of an applicant's prior year's expenditures
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in the state;
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(c) demonstrate to the satisfaction of the administrator the applicant's ability to sustain
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economic activity in the state sufficient to repay, by means of cash or appropriate credits, the
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assistance provided by the fund; and
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(d) satisfy other criteria the administrator considers appropriate.
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(2) (a) The administrator may exempt an applicant from either the requirements of
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Subsection (1)(a) or (1)(b), or both, if:
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(i) the financial assistance is provided to an applicant for the purpose of locating all or any
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portion of its operations to an economically disadvantaged rural area;
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(ii) the applicant is solely owned by or is a cooperative consisting solely of persons who
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reside in an economically disadvantaged rural area; or
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(iii) the applicant is part of a targeted industry.
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(b) The administrator may not exempt the applicant from the requirement under
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Subsection
9-2-1204
(2) that the loan or financial assistance be structured so that the repayment or
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return to the state equals at least the amount of the assistance together with an annual interest rate
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of 10%.
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(3) The administrator shall:
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(a) for applicants not described in Subsection (2)(a)(ii):
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(i) make findings as to whether or not each applicant has satisfied each of the conditions
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set forth in Subsection (1); and
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(ii) monitor the continued compliance by each applicant with each of the conditions set
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forth in Subsection (1);
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(b) for applicants described in Subsection (2)(a)(ii) who are cooperatives, make findings
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as to whether the economic activities of each applicant has resulted in a reduction in the federal
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poverty rate in the economically disadvantaged rural area in which the applicant is located;
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(c) for applicants described in Subsection (2)(a)(ii) who are not cooperatives, make
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findings as to whether the economic activities of each applicant has resulted in the creation of new
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jobs on a per capita basis, instead of a set standard, in the economically disadvantaged rural area
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in which the applicant is located;
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(d) monitor the compliance by each applicant with the provisions of any contract or
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agreement entered into between the applicant and the state as provided in Section
9-2-1206
; and
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(e) make funding decisions based upon appropriate findings and compliance.
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Section 4.
Section
9-2-1205.5
is enacted to read:
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9-2-1205.5. Financial assistance to companies that create economic impediments.
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(1) (a) The administrator may provide monies from the fund to a company creating an
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economic impediment if that company:
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(i) applies to the administrator;
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(ii) relocates to a rural area in Utah; and
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(iii) meets the qualifications of Subsection (1)(b).
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(b) Except as provided by Subsection (2), to qualify for financial assistance from the fund,
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a company creating an economic impediment shall:
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(i) demonstrate to the satisfaction of the administrator that the company creating an
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economic impediment, its replacement company, or in the aggregate the company creating the
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economic impediment and its replacement company:
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(A) will expend funds in Utah with vendors and subcontractors or other businesses in an
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amount proportional with monies provided from the fund at a minimum ratio of 5.7 to 1 per year
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for a minimum period of five years beginning with the date the loan was approved;
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(B) will expend at least $10,000,000 annually in Utah over the base level of the company
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creating the economic impediment's prior year's expenditures in the state; and
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(C) can sustain economic activity in the state sufficient to repay, by means of cash or
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appropriate credits, the assistance provided by the fund; and
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(ii) satisfy other criteria the administrator considers appropriate.
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(2) (a) The administrator may exempt a company creating an economic impediment from
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the requirements of Subsection (1)(b)(i)(A) or (1)(b)(i)(B), or both, if:
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(i) the financial assistance is provided to a company creating an economic impediment for
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the purpose of locating all or any portion of its operations to an economically disadvantaged rural
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area; or
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(ii) its replacement company is part of a targeted industry.
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(b) The administrator may not exempt a company creating an economic impediment from
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the requirement under Subsection
9-2-1204
(2) that the loan or financial assistance be structured
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so that the repayment or return to the state equals at least the amount of the assistance together
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with an annual interest rate of 10%.
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(3) The administrator shall:
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(a) make findings as to whether or not a company creating an economic impediment, its
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replacement company, or both, have satisfied each of the conditions set forth in Subsection (1);
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(b) monitor the compliance by a company creating an economic impediment, its
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replacement company, or both, with:
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(i) each of the conditions set forth in Subsection (1); and
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(ii) any contract or agreement under Section
9-2-1206
entered into between:
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(A) the company creating an economic impediment; and
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(B) the state; and
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(c) make funding decisions based upon appropriate findings and compliance.
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Section 5.
Section
9-2-1207
is amended to read:
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9-2-1207. Designation of economically disadvantaged rural areas and targeted
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industries.
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(1) For purposes of this part, the board shall determine annually which industries or groups
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of industries shall be targeted industries as defined in [Subsection] Section
9-2-1202
[(5)].
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(2) In designating an economically disadvantaged rural area:
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(a) the board shall consider the average agricultural and nonagricultural wage, personal
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income, unemployment, and employment in the area; and
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(b) the board may use an econometric cost-benefit model or models adopted by the
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Governor's Office of Planning and Budget.
Legislative Review Note
as of 2-16-00 12:06 PM
A limited legal review of this legislation raises no obvious constitutional or statutory concerns.