Bill Summary – FastDemocracy

LEGISLATIVE GENERAL COUNSEL                                            S.B. 86
Approved for Filing: R.H. Rees 6                         2nd Sub. (Salmon)
          6 02-20-24 3:22 PM 6
                         Senator Lincoln Fillmore proposes the following substitute bill:
                     LOCAL GOVERNMENT BONDS AMENDMENTS
                                       2024 GENERAL SESSION
                                           STATE OF UTAH
                                Chief Sponsor: Lincoln Fillmore
                                 House Sponsor: Brady Brammer
 6
 LONG TITLE
 General Description:
        This bill modifies provisions relating to local government bonds.
 Highlighted Provisions:
        This bill:
        < requires a local government entity intending to issue a lease revenue bond to comply
 with specified notice and public hearing requirements before issuing the lease
 revenue bond.
 Money Appropriated in this Bill:
        None
 Other Special Clauses:
        None
 Utah Code Sections Affected:
 AMENDS:                                                                                         2nd Sub. S.B. 86
        11-14-103, as last amended by Laws of Utah 2016, Chapter 386
        17D-2-501, as enacted by Laws of Utah 2008, Chapter 360
23
 Be it enacted by the Legislature of the state of Utah:
        Section 1. Section 11-14-103 is amended to read:
     *SB0086S02*
       2nd Sub. (Salmon) S.B. 86                                                    02-20-24 3:22 PM
          11-14-103. Bond issues authorized -- Purposes -- Use of bond proceeds.
          (1) Any local political subdivision may, in the manner and subject to the limitations
 and restrictions contained in this chapter, issue its negotiable bonds for the purpose of paying
 all or part of the cost of:
          (a) acquiring, improving, or extending any one or more improvements, facilities, or
 property that the local political subdivision is authorized by law to acquire, improve, or extend;
          (b) acquiring, or acquiring an interest in, any one or more or any combination of the
 following types of improvements, facilities, or property to be owned by the local political
 subdivision, either alone or jointly with one or more other local political subdivisions, or for
 the improvement or extension of any of those wholly or jointly owned improvements, facilities,
 or properties:
          (i) public buildings of every nature, including without limitation, offices, courthouses,
 jails, fire, police and sheriff's stations, detention homes, and any other buildings to
 accommodate or house lawful activities of a local political subdivision;
          (ii) waterworks, irrigation systems, water systems, dams, reservoirs, water treatment
 plants, and any other improvements, facilities, or property used in connection with the
 acquisition, storage, transportation, and supplying of water for domestic, industrial, irrigation,
 recreational, and other purposes and preventing pollution of water;
          (iii) sewer systems, sewage treatment plants, incinerators, and other improvements,
 facilities, or property used in connection with the collection, treatment, and disposal of sewage,
 garbage, or other refuse;
          (iv) drainage and flood control systems, storm sewers, and any other improvements,
 facilities, or property used in connection with the collection, transportation, or disposal of
 water;
          (v) recreational facilities of every kind, including without limitation, athletic and play
 facilities, playgrounds, athletic fields, gymnasiums, public baths, swimming pools, camps,
 parks, picnic grounds, fairgrounds, golf courses, zoos, boating facilities, tennis courts,
 auditoriums, stadiums, arenas, and theaters;
          (vi) convention centers, sports arenas, auditoriums, theaters, and other facilities for the
 holding of public assemblies, conventions, and other meetings;
          (vii) roads, bridges, viaducts, tunnels, sidewalks, curbs, gutters, and parking buildings,
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       02-20-24 3:22 PM                                                    2nd Sub. (Salmon) S.B. 86
 lots, and facilities;
         (viii) airports, landing fields, landing strips, and air navigation facilities;
         (ix) educational facilities, including without limitation, schools, gymnasiums,
 auditoriums, theaters, museums, art galleries, libraries, stadiums, arenas, and fairgrounds;
         (x) hospitals, convalescent homes, and homes for the aged or indigent; and
         (xi) electric light works, electric generating systems, and any other improvements,
 facilities, or property used in connection with the generation and acquisition of electricity for
 these local political subdivisions and transmission facilities and substations if they do not
 duplicate transmission facilities and substations of other entities operating in the state prepared
 to provide the proposed service unless these transmission facilities and substations proposed to
 be constructed will be more economical to these local political subdivisions;
         (c) new construction, renovation, or improvement to a state highway within the
 boundaries of the local political subdivision or an environmental study for a state highway
 within the boundaries of the local political subdivision; or
         (d) except as provided in Subsection (5), the portion of any claim, settlement, or
 judgment that exceeds $3,000,000.
         (2) Except as provided in Subsection (1)(c), any improvement, facility, or property
 under Subsection (1) need not lie within the limits of the local political subdivision.
         (3) A cost under Subsection (1) may include:
         (a) the cost of equipment and furnishings for such improvements, facilities, or
 property;
         (b) all costs incident to the authorization and issuance of bonds, including engineering,
 legal, and fiscal advisers' fees;
         (c) costs incident to the issuance of bond anticipation notes, including interest to accrue
 on bond anticipation notes;
         (d) interest estimated to accrue on the bonds during the period to be covered by the
 construction of the improvement, facility, or property and for 12 months after that period; and
         (e) other amounts which the governing body finds necessary to establish bond reserve
 funds and to provide working capital related to the improvement, facility, or property.
         (4) (a) Except as provided in Subsection (4)(b), the proceeds from bonds issued on or
 after May 14, 2013, may not be used:
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        2nd Sub. (Salmon) S.B. 86                                                  02-20-24 3:22 PM
        (i) for operation and maintenance expenses for more than one year after the date any of
 the proceeds are first used for those expenses; or
        (ii) for capitalization of interest more than five years after the bonds are issued.
        (b) The restrictions on the use of bond proceeds under Subsection (4)(a) do not apply
 to bonds issued to pay all or part of the costs of a claim, settlement, or judgment under
 Subsection (1)(d).
        (5) Beginning on or after July 1, 2021, a local political subdivision may not issue its
 negotiable bonds for a purpose described in Subsection (1)(d).
        (6) (a) Before issuing a lease revenue bond on or after May 1, 2024, a local political
 subdivision shall:
        (i) make a statement at a meeting of the local political subdivision, as provided in
 Subsection (6)(b);
        (ii) publish notice of the proposed issuance of a lease revenue bond and of the public
 hearing under Subsection (6)(d), as provided in Subsection (6)(c); and
        (iii) hold a public hearing, as provided in Subsection (6)(d).
        (b) (i) At a regular meeting of the local political subdivision that is held at least 14 days
 before a public hearing under Subsection (6)(d), the governing body of a local political
 subdivision intending to issue a lease revenue bond shall make a statement indicating:
        (A) the intent to issue a lease revenue bond; and
        (B) the purpose and estimated amount of the lease revenue bond.
        (ii) The local political subdivision's agenda under Section 52-4-202 for a meeting
 described in Subsection (6)(b)(i) shall include a separate item for the statement required under
 Subsection (6)(b)(i).
        (c) (i) A local political subdivision intending to issue a lease revenue bond shall
 provide notice of the intent to issue a lease revenue bond and of the public hearing required
 under Subsection (6)(d).
        (ii) The notice required under Subsection (6)(c)(i) shall be published:
        (A) subject to Section 45-1-101, in a newspaper or combination of newspapers of
 general circulation in the local political subdivision;
        (B) electronically in accordance with Section 45-1-101; and
        (C) for the local political subdivision, as a class A notice under Section 63G-30-102,
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        02-20-24 3:22 PM                                                2nd Sub. (Salmon) S.B. 86
 for at least 14 days immediately before the public hearing under Subsection (6)(d).
        (iii) The notice described in Subsection (6)(c)(ii)(A):
        (A) shall be no less than 1/4 page in size, use type no smaller than 18 point, and be
 surrounded by a 1/4-inch border;
        (B) shall be run once each week for the two weeks before a local political subdivision
 conducts a public hearing under Subsection (6)(d); and
        (C) may not be placed in the portion of a newspaper where legal notices and classified
 advertisements appear.
        (iv) A notice required under Subsection (6)(c)(i) shall:
        (A) contain a clear statement indicating that the local political subdivision intends to
 issue a lease revenue bond;
        (B) explain the purpose, proposed amount, and length of term of the lease revenue
 bond and the annual amount that the local political subdivision will be required to pay in
 principal and interest on the lease revenue bond;
        (C) identify the intended lessee of the facility to be constructed using proceeds from
 the lease revenue bond and the expected annual amount of lease payments that the lessee will
 pay;
        (D) provide the date, time, place, and purpose of the public hearing under Subsection
 (6)(d); and
        (E) provide the date, time, and place of the local political subdivision governing body
 meeting at which the governing body anticipates taking action on the proposal to issue a lease
 revenue bond.
        (d) (i) A local political subdivision intending to issue a lease revenue bond shall hold a
 public hearing on the proposed lease revenue bond.
        (ii) A public hearing under this Subsection (6)(d):
        (A) shall be held beginning at or after 6:00 p.m.;
        (B) shall be held separate from any other public hearing; and
        (C) may be held the same day as another public hearing, including immediately before
 or after the other public hearing.
        (iii) At a public hearing under this Subsection (6)(d), the governing body of the local
 political subdivision shall provide a member of the public desiring to be heard an opportunity
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       2nd Sub. (Salmon) S.B. 86                                                 02-20-24 3:22 PM
 to present testimony on the proposed issuance of a lease revenue bond:
        (A) within reasonable time limits; and
        (B) without unreasonable restriction on the number of individuals allowed to make
 public comment.
        Section 2. Section 17D-2-501 is amended to read:
        17D-2-501. Provisions applicable to issuance of local building authority bonds.
        (1) Except as otherwise provided in this chapter:
        [(1)] (a) each local building authority that issues bonds shall:
        [(a)] (i) issue them as provided in Title 11, Chapter 14, Local Government Bonding
 Act, except Section 11-14-306; and
        [(b)] (ii) receive the benefits of Title 11, Chapter 30, Utah Bond Validation Act;
        [(2)] (b) bonds issued by a local building authority are governed by and subject to Title
 11, Chapter 14, Local Government Bonding Act, except Sections 11-14-306 and 11-14-403;
 and
        [(3)] (c) each local building authority that issues refunding bonds shall issue them as
 provided in Title 11, Chapter 27, Utah Refunding Bond Act.
        (2) A local building authority that issues a lease revenue bond on or after May 1, 2024
 shall, before issuing the lease revenue bond, comply with the same requirements under
 Subsection 11-14-103(6) that apply to the issuance of a lease revenue bond by a local political
 subdivision, as defined in Section 11-14-102.
        Section 3. Effective date.
        This bill takes effect on May 1, 2024.
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Statutes affected: 
Introduced: 11-14-103, 17D-2-501
Enrolled: 11-14-103, 17D-2-501
S.B. 86 1st Substitute : 11-14-103, 17D-2-501
S.B. 86 2nd Substitute (Not Adopted) Text: 11-14-103, 17D-2-501
S.B. 86 3rd Substitute (Not Adopted) Text: 11-14-103, 17D-2-501
S.B. 86 1st Substitute (Not Adopted) Text: 11-14-103, 17D-2-501