Utah Code 11-42-606. Assessment bonds are not a local entity’s general obligation — Liability and responsibility of a local entity that issues assessment bonds
payable in part or in whole from assessments levied in an assessment area, improvement revenues, and a guaranty fund or reserve fund. See Utah Code 11-42-102
Bonds: means assessment bonds and refunding assessment bonds. See Utah Code 11-42-102
Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
Property: includes real property and any interest in real property, including water rights and leasehold rights. See Utah Code 11-42-102
Settlement: Parties to a lawsuit resolve their difference without having a trial. Settlements often involve the payment of compensation by one party in satisfaction of the other party's claims.
(2)
A local entity that issues assessment bonds:
(a)
may not be held liable for payment of the bonds except to the extent of:
(i)
funds created and received from assessments against which the bonds are issued;
(ii)
improvement revenues; and
(iii)
the local entity’s guaranty fund under Section 11-42-701 or, if applicable, reserve fund under Section 11-42-702; and
(b)
is responsible for:
(i)
the lawful levy of all assessments;
(ii)
the collection and application of improvement revenues, as provided in this chapter;
(iii)
the creation and maintenance of a guaranty fund or, if applicable, a reserve fund; and
(iv)
the faithful accounting, collection, settlement, and payment of:
(A)
assessments and improvement revenues; and
(B)
money in a guaranty fund or, if applicable, a reserve fund.
(3)
If a local entity illegally assesses property that is exempt from assessment, the local entity:
(a)
is liable to the holders of assessment bonds for the payment of the illegal assessment; and
(b)
shall pay the amount for which it is liable under Subsection (3)(a) from the local entity’s general fund or other legally available money.
