Enrolled Copy S.B. 162
1 RURAL DEVELOPMENT ACT AMENDMENTS
2024 GENERAL SESSION
STATE OF UTAH
Chief Sponsor: David P. Hinkins House Sponsor: Carl R. Albrecht
2
3 LONG TITLE
4 General Description:
5 This bill modifies the Rural Opportunity Program.
6 Highlighted Provisions:
7 This bill:
8 ▸ defines terms;
9 ▸ authorizes the Governor's Office of Economic Opportunity to award a grant or loan to a
10 rural health care special district;
11 ▸ removes the annual cap on grant awards to a rural community or business entity;
12 ▸ modifies the interest rate on a loan issued by the Governor's Office of Economic
13 Opportunity; and
14 ▸ makes technical changes.
15 Money Appropriated in this Bill:
16 None
17 Other Special Clauses:
18 None
19 Utah Code Sections Affected:
20 AMENDS:
21 63N-4-801, as last amended by Laws of Utah 2023, Chapter 499
22 63N-4-802, as last amended by Laws of Utah 2023, Chapter 499
23
24 Be it enacted by the Legislature of the state of Utah:
25 Section 1. Section 63N-4-801 is amended to read:
26 63N-4-801 . Definitions.
27 As used in this part:
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28 (1) "Advisory committee" means the Rural Opportunity Advisory Committee created in
29 Section 63N-4-804.
30 (2) "Association of governments" means an association of political subdivisions of the
31 state, established pursuant to an interlocal agreement under Title 11, Chapter 13,
32 Interlocal Cooperation Act.
33 (3) (a) "Business entity" means a sole proprietorship, partnership, association, joint
34 venture, corporation, firm, trust, foundation, or other organization or entity used in
35 carrying on a business.
36 (b) "Business entity" does not include a business primarily engaged in the following:
37 (i) construction;
38 (ii) staffing;
39 (iii) retail trade; or
40 (iv) public utility activities.
41 (4) "CEO board" means a County Economic Opportunity Advisory Board as described in
42 Section 63N-4-803.
43 (5) "Fund" means the Rural Opportunity Fund created in Section 63N-4-805.
44 (6) "Qualified asset" means a physical asset that provides or supports an essential public
45 service.
46 (7) " Qualified project" means a project to build or improve one or more qualified assets for
47 a rural community, including:
48 (a) telecom and high-speed Internet infrastructure;
49 (b) power and energy infrastructure;
50 (c) water and sewerage infrastructure;
51 (d) healthcare infrastructure; or
52 (e) other infrastructure as defined by rule made by the office in accordance with Title
53 63G, Chapter 3, Utah Administrative Rulemaking Act.
54 (8) "Rural community" means a rural county or rural municipality.
55 (9) "Rural county" means a county of the third, fourth, fifth, or sixth class.
56 (10) "Rural health care special district" means a special service district created to provide
57 health care under Subsection 17D-1-201(6) that is located in a rural county or rural
58 municipality.
59 [(10)] (11) "Rural municipality" means a city, town, or metro township located within the
60 boundaries of:
61 (a) a county of the third, fourth, fifth, or sixth class; or
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62 (b) a county of the second class, if the municipality has a population of 10,000 or less.
63 [(11)] (12) "Rural Opportunity Program" or "program" means the Rural Opportunity
64 Program created in Section 63N-4-802.
65 Section 2. Section 63N-4-802 is amended to read:
66 63N-4-802 . Creation of Rural Opportunity Program -- Awarding of grants and
67 loans -- Rulemaking -- Reporting.
68 (1) There is created the Rural Opportunity Program.
69 (2) The program shall be overseen by the advisory committee and administered by the
70 office.
71 (3) (a) In overseeing the program, the advisory committee shall make recommendations
72 to the office on the awarding of grants and loans under this section.
73 (b) After reviewing the recommendations of the advisory committee, and subject to
74 appropriations from the Legislature, the office shall:
75 (i) award grants to rural communities and business entities in accordance with
76 Subsection (4) and rules made by the center under Subsection (6); and
77 (ii) award loans to rural communities in accordance with Subsection (5) and rules
78 made by the center under Subsection (6).
79 (4) (a) The office shall annually distribute an equal amount of grant money to all rural
80 counties that have created a CEO board and apply for a grant, in an amount up to and
81 including $200,000 annually per county.
82 (b) In addition to the grant money distributed to rural counties under Subsection (4)(a),
83 the office may use program funds to:
84 (i) award grants to rural communities that demonstrate a funding match, in an amount
85 established by rule under Subsection (6);
86 (ii) award grants to business entities that create new jobs within rural communities; [
87 and]
88 (iii) award grants to associations of governments, subject to Subsection (4)(e)[.] ; and
89 (iv) award grants to rural health care special districts.
90 (c) The office shall award grants under this Subsection (4) to address the economic
91 development needs of rural communities, which needs may include:
92 (i) business recruitment, development, and expansion;
93 (ii) workforce training and development; and
94 (iii) infrastructure, industrial building development, and capital facilities
95 improvements for business development.
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96 (d) In awarding grants under this Subsection (4), the office:
97 (i) shall prioritize applications in accordance with rules made by the office under
98 Subsection (6); and
99 [(ii) may not award more than $800,000 annually to a rural community or business
100 entity; and]
101 [(iii)] (ii) may not award more than 20% of the total amount of grant funds made
102 available each year to associations of governments.
103 (e) An association of governments may not receive a grant from the program unless the
104 association of governments demonstrates to the office that each county belonging to
105 the association of governments has approved the request for grant funds.
106 (5) (a) In addition to the awarding of grants under Subsection (4), the office may use
107 program funds to award loans to rural communities or rural health care special
108 districts to provide financing for qualified projects.
109 (b) (i) A rural community or rural health care special district may not receive a loan
110 from the program for a qualified project unless:
111 (A) the rural community or rural health care special district demonstrates to the
112 office that the rural community or rural health care special district has
113 exhausted all other means of securing funding from the state for the qualified
114 project; and
115 (B) the rural community or rural health care special district enters into a loan
116 contract with the office.
117 (ii) A loan contract under Subsection (5)(b)(i)(B):
118 (A) shall be secured by legally issued bonds, notes, or other evidence of
119 indebtedness validly issued under state law, including pledging all or any
120 portion of a revenue source controlled by the rural community or rural health
121 care special district to the repayment of the loan; and
122 (B) may provide that a portion of the proceeds of the loan may be applied to fund
123 a reserve fund to secure the repayment of the loan.
124 (c) A loan under this Subsection (5) shall bear interest [at a rate:] as set by the office in
125 consultation with the state treasurer.
126 [(i) not less than bond market interest rates available to the state; and]
127 [(ii) not more than .5% above bond market interest rates available to the state.]
128 (d) Before a rural community or rural health care special district may receive a loan from
129 the office, the rural community or rural health care special district shall:
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130 (i) publish the rural community's or rural health care special district's intention to
131 obtain the loan at least once in accordance with the publication and notice
132 requirements described in Section 11-14-316; and
133 (ii) adopt an ordinance or resolution authorizing the loan.
134 (e) (i) If a rural community or rural health care district that receives a loan from the
135 office fails to comply with the terms of the loan contract, the office may seek any
136 legal or equitable remedy to obtain compliance or payment of damages.
137 (ii) If a rural community or rural health care district fails to make loan payments
138 when due, the state shall, at the request of the office, withhold an amount of
139 money due to the rural community or rural health care district and deposit the
140 withheld money into the fund to pay the amount due under the contract.
141 (iii) The office may elect when to take any action or request the withholding of
142 money under this Subsection (5)(e).
143 (f) All loan contracts, bonds, notes, or other evidence of indebtedness securing any loans
144 shall be collected and accounted for in accordance with Section 63B-1b-202.
145 (6) (a) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act,
146 and in collaboration with the advisory committee, the office shall make rules to
147 administer the program.
148 (b) The rules under Subsection (6)(a) shall establish:
149 (i) eligibility criteria for a rural community or business entity to receive a grant or
150 loan under the program;
151 (ii) application requirements;
152 (iii) funding match requirements for a rural community to receive a grant under
153 Subsection (4)(b);
154 (iv) a process for prioritizing grant and loan applications; and
155 (v) reporting requirements.
156 (7) The office shall include the following information in the annual written report described
157 in Section 63N-1a-306:
158 (a) the total amount of grants and loans the office awarded to rural communities, rural
159 health care special districts, and business entities under the program;
160 (b) a description of the projects for which the office awarded a grant or loan under the
161 program;
162 (c) the total amount of outstanding debt service that is being repaid by a grant or loan
163 awarded under the program;
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164 (d) whether the grants and loans awarded under the program have resulted in economic
165 development within rural communities; and
166 (e) the office's recommendations regarding the effectiveness of the program and any
167 suggestions for legislation.
168 Section 3. Effective date.
169 This bill takes effect on May 1, 2024.
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Statutes affected: Introduced: 63N-4-801, 63N-4-802
Amended: 63N-4-801, 63N-4-802
Enrolled: 63N-4-801, 63N-4-802