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HB 17
CAPITAL ACCESS AMENDMENT
1996 GENERAL SESSION
STATE OF UTAH
Sponsor: David M. Jones
AN ACT RELATING TO COMMUNITY AND ECONOMIC DEVELOPMENT; MODIFYING
CERTAIN ACCOUNT AND RECORD ACCESS REQUIREMENTS ASSOCIATED WITH
THE CAPITAL ACCESS FUND; MODIFYING PREMIUM PARAMETERS;
AUTHORIZING UTFC TO USE INTEREST ON THE FUND FOR ADMINISTRATIVE
COSTS; AND MAKING TECHNICAL CORRECTIONS.
This act affects sections of Utah Code Annotated 1953 as follows:
AMENDS:
9-2-1304 , as last amended by Chapter 206, Laws of Utah 1993
9-2-1306 , as last amended by Chapters 4 and 206, Laws of Utah 1993
9-2-1310 , as last amended by Chapter 206, Laws of Utah 1993
9-2-1311 , as last amended by Chapter 206, Laws of Utah 1993
Be it enacted by the Legislature of the state of Utah:
Section 1.
Section
9-2-1304
is amended to read:
9-2-1304. Lender's fund reserve accounts.
(1) (a) The Utah Technology Finance Corporation shall [request the state treasurer to]
establish a separate lender's fund reserve account [within the fund] for each participating lender
[paying premiums] at the participating lender's institution.
(b) Each lender's fund reserve account shall consist of the fees and premiums paid by the
participating lenders and borrower's, together with interest and income earned on these monies.
(c) Monies in the lender's fund reserve account may be considered an asset of that
participating lender.
(d) Except [as permitted] for withdrawals permitted by Section 9-2-1310
upon termination
of participation in the fund, monies in the lender's fund reserve account may be used, pledged, and
dedicated only to offset losses on loans within the special loan portfolio of the participating lender.
(2) (a) The Utah Technology Finance Corporation shall request the state treasurer to
establish a separate state fund reserve account within the fund for each participating lender.
(b) Each state fund reserve account shall consist of the state matching funds as determined
in accordance with Subsection
9-2-1306
(3), together with interest earned on these monies.
(c) Monies in the state fund reserve account are an asset of the state.
(d) Monies in the state fund reserve account of a participating lender may be used, pledged,
and dedicated only to offset losses on loans within the special loan portfolio of the participating
lender.
(e) When a participating lender cancels or terminates participation in the Capital Access
Program, the monies in the participating lender's state fund reserve account revert back to the Capital
Access Fund.
Section 2.
Section
9-2-1306
is amended to read:
9-2-1306. Premiums -- Administrative costs -- Transfers.
(1) (a) When a participating lender makes a loan that qualifies it to be placed within a special
loan portfolio, the premium charges payable to the lender's fund reserve account by the participating
lender and the borrower shall be prescribed by the participating lender.
(b) The amount paid by the borrower may not be less than [1.5%] 0.5% of the principal
amount of the loan nor more than [3.5%] 6% of the principal amount of the loan.
(c) The amount paid by the participating lender shall be equal to the amount paid by the
borrower.
(d) This amount shall then be deposited into the lender's fund reserve account. [The]
(e) (i) Except as provided in Subsection (ii), the participating lender may recover from the
borrower the cost of the participating lender's payment in any manner agreed to by the participating
lender and the borrower.
(ii) Notwithstanding Subsection (i), the total premium charge paid by the borrower to the
lender's fund reserve account may not exceed 6% of the principal amount of the loan.
(2) (a) The Utah Technology Finance Corporation may [withdraw up to 50% of all] use the
interest [or income] earned on money in the state fund [or in any fund] reserve account for costs
incurred in administering the fund.
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[(a) Any interest remaining in the fund shall remain in the fund.]
(b) Any interest remaining in the lender's fund reserve account shall remain in the account
until a claim is filed in accordance with Section 9-2-1308
or until it is withdrawn under Section
9-2-1310
.
[(c) Any interest remaining in the state fund reserve account shall remain in the account until
a claim is filed in accordance with Section 9-2-1308
.]
(3) When enrolling a loan, the Utah Technology Finance Corporation shall request the
treasurer to transfer into the state fund reserve account an amount determined as follows:
(a) [If] if the amount of any loan made by a participating lender, plus the amount of loans
previously enrolled by that participating lender, is less than $750,000, the Utah Technology Finance
Corporation shall request the state treasurer to deposit into the state fund reserve account in each case
an amount equal to:
(i) 250% of the combined amounts paid into the lender's fund reserve account in all areas
of the state except those designated as enterprise zones under Title 9, Chapter 2, Part 4; or
(ii) 300% of the combined amounts paid into the lender's fund reserve account in areas
designated as enterprise zones under Title 9, Chapter 2[.];
(b) [If prior to] if, before the enrollment of the loan, the amount of loans previously enrolled
equals or exceeds $750,000, the Utah Technology Finance Corporation shall request the state
treasurer to transfer into the state fund reserve account an amount equal to the amounts paid into the
lender's fund reserve account[.]; and
(c) [If] if the amount of loans previously enrolled by a participating lender is less than
$750,000 but the enrollment of a loan will cause the aggregate amount of all loans enrolled by that
participating lender to exceed $750,000, the Utah Technology Finance Corporation shall request the
state treasurer to transfer into the state fund reserve account an amount equal to a percentage of the
amount paid into the lender's fund reserve account, [which percentage shall be] determined by:
(i) [by] multiplying by 250% for loans in areas described in Subsection (3)(a)(i), and by
300% for loans in areas described in Subsection (3)(a)(ii) that portion of the loan which when added
to the amount of all previously enrolled loans totals $750,000;
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(ii) [by] multiplying the balance of the loan by 100%; and
(iii) [by] adding together the products of such computations and dividing the sum by the total
amount of the loan.
(4) In any three-year period, the Utah Technology Finance Corporation may not request the
treasurer to transfer more than $100,000 from the fund into any state fund reserve account for any
one borrower.
Section 3.
Section
9-2-1310
is amended to read:
9-2-1310. Termination -- Withdrawal.
(1) (a) If matching money is no longer available in the fund, the Utah Technology Finance
Corporation may terminate its obligation under this part to enroll loans.
(b) If a participating lender fails to comply with the intent or provisions of this part or with
the provisions of any agreement entered into pursuant to this part, the Utah Technology Finance
Corporation may terminate its obligation under this part to enroll loans for that participating lender.
(2) (a) The termination described in Subsection (1) shall be applicable on the effective date
specified in the notice of termination, except that the termination may not apply to any loan made
on or before the date on which the notice of termination is received by the participating lender.
(b) If the Utah Technology Finance Corporation is terminating the enrollment of loans not
merely for the participating lender but instead for all participating lenders under this part, the Utah
Technology Finance Corporation shall provide notice of at least 90 days to the participating lender.
(c) Any terminations under Subsection (1) shall be prospective only, and do not apply to any
loans previously enrolled under this chapter, except that if a previously enrolled loan is refinanced,
the amount covered under this part may not be increased beyond the covered amount as previously
enrolled.
(3) (a) (i) Any participating lender may withdraw from the Capital Access Program under
this part upon written notice to the Utah Technology Finance Corporation 30 days before the date
of withdrawal.
(ii) This withdrawal shall be applicable on the effective date specified in the notice of
withdrawal, except that the withdrawal may not apply to any unpaid loan made on or before the date
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on which the notice of withdrawal is received by the Utah Technology Finance Corporation.
(b) Any withdrawals under this subsection shall be prospective only, and do not apply to any
unpaid loans previously enrolled under this chapter, except that if a previously enrolled loan is
refinanced, the amount covered under this part may not be increased beyond the covered amount as
previously enrolled.
(c) (i) If a participating lender chooses to withdraw, it may claim monies left in the lender's
fund reserve account [attributable to the lender's portion of the premium charges plus interest, as
determined by the Utah Technology Finance Corporation].
(ii) Any such withdrawal may not have the effect of exposing the state or the Utah
Technology Finance Corporation to any loss or default on any loan made by the withdrawing
participating lender.
Section 4.
Section
9-2-1311
is amended to read:
9-2-1311. Reports -- Audits.
(1) (a) The Utah Technology Finance Corporation shall report to the Legislature at least
quarterly on the activities of the fund.
(b) The report shall include[, but not be limited to,]:
(i) information on location of all borrowers and participating lenders[,];
(ii) the amount and type of financial assistance being requested[,]; and
(iii) the type of project or product being financed.
(2) (a) The Utah Technology Finance Corporation shall provide [to each participating lender]
monthly transaction reports [indicating] to each participating lender that identify:
(i) the balance in the lender's state fund reserve account[,];
(ii) payments and transfers into [the] that account[,]; and
(iii) withdrawals from [the] that account[, and interest or income earned on money credited
to the account. The].
(b) Participating lenders may review the records of the Utah Technology Finance
Corporation [with respect to all] that account for payments and transfers into the account[,] and
withdrawals from the account[, and interest or income earned on the money credited to the account
- 5 -
shall be available to the participating lender] at the office of the Utah Technology Finance
Corporation during normal business hours.
(3) (a) Each participating lender shall provide monthly transaction reports to the Utah
Technology Finance Corporation that identify:
(i) the balance in the lender's fund reserve account;
(ii) payments and transfers into the account; and
(iii) withdrawals from the account.
(b) Each participating lender shall allow the Utah Technology Finance Corporation to
review, during normal business hours, its records that account for:
(i) payments and transfers into the account;
(ii) withdrawals from the account; and
(iii) interest or income earned on the monies credited to the account.
[(3)] (4) (a) The state auditor, or a certified public accountant appointed by the state auditor,
annually shall conduct and remit to the Legislature a program and financial audit of the fund and,
in the conduct of the audit, shall have access to all records of the fund at any time, whether or not
confidential.
(b) Each audit required by this section shall include a determination of whether the fund is
likely to be able to continue to meet its obligations, including a report on the status of outstanding
loans and agreements made by the fund.
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