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First Substitute S.B. 273
Senator David H. Steele proposes to substitute the following bill:
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HIGHWAY BONDING
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2000 GENERAL SESSION
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STATE OF UTAH
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Sponsor: David H. Steele
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AN ACT RELATING TO BONDS; AUTHORIZING THE ISSUANCE AND SALE OF
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GENERAL OBLIGATION BONDS FOR CERTAIN HIGHWAYS AND RELATED
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FACILITIES; SPECIFYING THE USE OF BOND AND NOTE PROCEEDS AND THE
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MANNER OF ISSUANCE; IMPOSING AND ABATING A PROPERTY TAX; CREATING
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SINKING FUNDS; MODIFYING DEBT LIMIT REQUIREMENTS; AUTHORIZING CERTAIN
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OTHER HIGHWAY EXPENDITURES; PROVIDING FOR RELATED MATTERS;
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REQUIRING THE DEPARTMENT OF TRANSPORTATION TO ENTER AN AGREEMENT;
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AND MAKING TECHNICAL CORRECTIONS.
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This act affects sections of Utah Code Annotated 1953 as follows:
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AMENDS:
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63-38c-402, as last amended by Chapter 331, Laws of Utah 1999
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ENACTS:
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63B-9-201, Utah Code Annotated 1953
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63B-9-202, Utah Code Annotated 1953
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63B-9-203, Utah Code Annotated 1953
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63B-9-204, Utah Code Annotated 1953
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63B-9-205, Utah Code Annotated 1953
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63B-9-206, Utah Code Annotated 1953
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63B-9-207, Utah Code Annotated 1953
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63B-9-208, Utah Code Annotated 1953
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63B-9-209, Utah Code Annotated 1953
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63B-9-210, Utah Code Annotated 1953
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63B-9-211, Utah Code Annotated 1953
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63B-9-212, Utah Code Annotated 1953
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63B-9-213, Utah Code Annotated 1953
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63B-9-214, Utah Code Annotated 1953
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63B-9-215, Utah Code Annotated 1953
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63B-9-216, Utah Code Annotated 1953
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63B-9-217, Utah Code Annotated 1953
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This act enacts uncodified material.
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Be it enacted by the Legislature of the state of Utah:
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Section 1.
Section
63-38c-402
is amended to read:
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63-38c-402. Debt limitation -- Vote requirement needed to exceed limitation --
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Exceptions.
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(1) (a) Except as provided in Subsection (1)(b), the outstanding general obligation debt
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of the state may not exceed 20% of the maximum allowable appropriations limit unless approved
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by more than a two-thirds vote of both houses of the Legislature.
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(b) Notwithstanding the limitation contained in Subsection (1)(a), debt issued under the
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authority of Title 63B, Chapter 6, Part 2, 1997 Highway General Obligation Bond Authorization,
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Title 63B, Chapter 6, Part 3, 1997 Highway Bond Anticipation Note Authorization, Title 63B,
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Chapter 7, Part 2, 1998 Highway General Obligation Bond Authorization, Title 63B, Chapter 7,
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Part 3, 1998 Highway Bond Anticipation Note Authorization, Title 63B, Chapter 8, Part 2, 1999
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Highway General Obligation Bond Authorization, [and] Title 63B, Chapter 8, Part 3, 1999
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Highway Bond Anticipation Note Authorization, Title 63B, Chapter 9, Part 2, 2000 Highway
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General Obligation Bond, is not subject to the debt limitation established by this section.
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(2) This section does not apply if contractual rights will be impaired.
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Section 2.
Section
63B-9-201
is enacted to read:
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Part 2. 2000 Highway General Obligation Bond
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63B-9-201. 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 Department of Transportation.
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Section 3.
Section
63B-9-202
is enacted to read:
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63B-9-202. Maximum amount -- Projects authorized.
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(1) In addition to any other bonds issued under this part, upon a written request from the
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Department of Transportation the State Bonding Commission may issue bonds that may not exceed
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$6,000,000.
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(2) (a) (i) Proceeds from the issuance of bonds shall be provided to the Department of
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Transportation to provide funds to pay all or part of the costs of state highway construction or
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reconstruction of the interchange on Interstate 80 at 5600 West and approximately one mile of
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5600 West both north and south of Interstate 80 in Salt Lake County.
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(ii) The interchange and highway construction or reconstruction shall conform to the
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proposed design standards and configurations for the future 5600 West Legacy Highway profile.
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(b) These costs may include the cost of acquiring land, interests in land, easements and
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rights-of-way, improving sites, and making all improvements necessary, incidental, or convenient
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to the facilities, interest estimated to accrue on these bonds during the period to be covered by
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construction of the projects plus a period of six months after the end of the construction period,
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and all related engineering, architectural, and legal fees.
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(3) If, after completion of the projects authorized under Subsection (2)(a) and payment of
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the costs of issuing and selling the bonds under Section
63B-9-203
, any bond proceeds remain
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unexpended, the Department of Transportation may use those unexpended proceeds to pay all or
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part of the costs of construction projects approved and prioritized by the Transportation
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Commission.
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(4) 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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(5) The Department of Transportation may enter into agreements related to that project
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before the receipt of proceeds of bonds issued under this chapter.
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Section 4.
Section
63B-9-203
is enacted to read:
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63B-9-203. Bond proceeds may be used to pay costs of issuance and sale.
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The proceeds of bonds issued under this chapter shall be used for the purposes described
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in Section
63B-9-202
and to pay all or part of any cost incident to the issuance and sale of the
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bonds including, without limitation, printing, registration and transfer costs, legal fees, trustees'
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fees, financial advisors' fees, liquidity providers' fees, credit enhancement providers' fees, and
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underwriters' discount.
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Section 5.
Section
63B-9-204
is enacted to read:
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63B-9-204. 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 15 years after the dated date of the bonds.
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Section 6.
Section
63B-9-205
is enacted to read:
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63B-9-205. 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
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terms and conditions of arrangements entered into by the commission on behalf of the state with
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financial and other institutions for letters of credit, standby letters of credit, reimbursement
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agreements, and remarketing, indexing, and tender agent agreements to secure the bonds, including
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payment from any legally available source of fees, charges, or other amounts coming due under
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the agreements 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 whatever amounts are
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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-9-206
is enacted to read:
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63B-9-206. 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, Section 1.
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(2) For purposes of applying the debt limitation contained in Utah Constitution Article
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XIV, Section 1, the value of the taxable property in Utah is considered to be 100% of the fair
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market value of the taxable property of the state, as computed from the last assessment for state
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purposes previous to the issuance of the bonds.
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Section 8.
Section
63B-9-207
is enacted to read:
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63B-9-207. 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-9-208
is enacted to read:
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63B-9-208. 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 Highway 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-9-209
is enacted to read:
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63B-9-209. Payment of interest, principal, and redemption premiums.
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The state treasurer shall:
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(1) promptly pay any principal and interest due on the bonds from funds within the sinking
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fund; and
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(2) immediately transmit the amount paid to the paying agent for the bonds.
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Section 11.
Section
63B-9-210
is enacted to read:
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63B-9-210. Investment of sinking fund money.
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(1) The state treasurer may, by following the procedures and requirements of Title 51,
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Chapter 7, State Money Management Act, invest any money contained in the sinking fund until
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it is needed for the purposes for which the fund 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 in the sinking fund and use it for the payment of debt service on the
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bonds.
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Section 12.
Section
63B-9-211
is enacted to read:
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63B-9-211. 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-9-212
is enacted to read:
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63B-9-212. 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-9-213
is enacted to read:
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63B-9-213. 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 this 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-9-214
is enacted to read:
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63B-9-214. 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-9-215
is enacted to read:
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63B-9-215. 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-9-216
is enacted to read:
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63B-9-216. 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) in lieu of publishing the entire resolution, publish a notice of bonds to be issued, titled
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as such, containing the information required by Subsection
11-14-21
(3).
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(2) (a) Any interested person, for 30 days 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-9-217
is enacted to read:
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63B-9-217. 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. Department of Transportation agreement required.
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(1) As used in this section:
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(a) "Department" means the Department of Transportation.
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(b) "Developer" means a developer of a large sales tax generating development that
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requires highway improvement projects because of significant impacts on highway infrastructure.
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(2) Before the department may request the issuance of bonds under Section
63B-9-202
,
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the department shall enter into an agreement with a developer that specifies the liability of the
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developer for:
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(a) project costs, including costs that exceed the amount of the bond issuance;
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(b) new sales tax revenues from construction of the developer's development and new
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revenues from the completed development that are less than $6,000,000 within an agreed upon
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time as certified by the Tax Commission; and
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(c) failure of the developer to complete the agreed upon capital construction for the
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development.
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(3) Notwithstanding the requirements of Subsection (2), the agreement may not contain
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any terms that prevent the bonds under Section
63B-9-202
from being issued on a federally
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tax-exempt basis.
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