11-42a-401. Local entity may authorize the issuance of energy assessment bonds — Limit on amount of bonds — Features of energy assessment bonds.
| (1) |
A local entity may, subject to the requirements of this chapter, authorize the issuance of a bond to pay, refinance, or reimburse the costs of improvements in an energy assessment area, and other related costs, against the funds that the local entity will receive because of an assessment in an energy assessment area. |
Terms Used In Utah Code 11-42a-401
- Interest rate: The amount paid by a borrower to a lender in exchange for the use of the lender's money for a certain period of time. Interest is paid on loans or on debt instruments, such as notes or bonds, either at regular intervals or as part of a lump sum payment when the issue matures. Source: OCC
- Lien: A claim against real or personal property in satisfaction of a debt.
- Property: includes both real and personal property. See Utah Code 68-3-12.5
- Variable Rate: Having a "variable" rate means that the APR changes from time to time based on fluctuations in an external rate, normally the Prime Rate. This external rate is known as the "index." If the index changes, the variable rate normally changes. Also see Fixed Rate.
| (2) |
A local entity may, by adoption of a parameters resolution, delegate to one or more officers of the issuer the authority to:
| (a) |
in accordance with the parameters resolution, approve the final interest rate or rates, price, principal amount, maturity or maturities, redemption features, and other terms of the bond; and |
| (b) |
approve and execute all documents relating to the issuance of a bond. |
|
| (3) |
The aggregate principal amount of a bond authorized under Subsection (1) may not exceed:
| (a) |
the unpaid balance of assessments at the time the bond is issued; or |
| (b) |
the total costs of the improvements to be refinanced or reimbursed if the property owner incurred the costs of improvements to be refinanced or reimbursed no earlier than three years before the date on which the local entity:
| (i) |
adopted a parameters resolution; |
| (ii) |
adopted an energy assessment resolution or ordinance; or |
| (iii) |
assigned the energy assessment lien. |
|
|
| (4) |
The issuer of an energy assessment bond issued under this section shall ensure that:
| (a) |
the energy assessment bond:
| (i) |
is fully negotiable for all purposes; |
| (ii) |
matures at a time that does not exceed the period that installments of assessments in the assessment area are due and payable, plus one year; |
| (iv) |
provides that interest be paid semiannually, annually, or at another interval as specified by the governing body; and |
| (v) |
is not dated earlier than the effective date of the assessment ordinance; and |
|
| (b) |
the resolution authorizing the issuance of the bond defines the place where the bond is payable, the form of the bond, and the manner in which the bond is sold. |
|
| (5) |
| (a) |
A local entity may:
| (i) |
| (A) |
provide that an energy assessment bond may be called for redemption before maturity; and |
| (B) |
fix the terms and conditions of redemption, including the notice to be given and any premium to be paid; |
|
| (ii) |
subject to Subsection (5)(b), require an energy assessment bond to bear interest at a fixed or variable rate, or a combination of fixed and variable rates; |
| (iii) |
specify the terms and conditions under which:
| (A) |
an energy assessment bond bearing interest at a variable interest rate may be converted to bear interest at a fixed interest rate; and |
| (B) |
the local entity agrees to repurchase the bonds; |
|
| (iv) |
engage a remarketing agent and indexing agent, subject to the terms and conditions to which the governing body agrees; and |
| (v) |
include all costs associated with an energy assessment bond, including any costs resulting from any of the actions the local entity is authorized to take under this section, in an assessment levied under Section 11-42a-203. |
|
| (b) |
If an energy assessment bond carries a variable interest rate, the local entity shall specify:
| (i) |
the basis upon which the variable rate is to be determined over the life of the bond; |
| (ii) |
the manner in which and schedule upon which the rate is to be adjusted; and |
| (iii) |
a maximum rate that the bond may carry. |
|
|
| (6) |
A local entity may only use the proceeds of an energy assessment bond to refinance or reimburse costs of improvements authorized under this chapter if the property owner incurred the costs no earlier than three years before the date on which the local entity:
| (a) |
adopted a parameters resolution; |
| (b) |
adopted an energy assessment resolution or ordinance; or |
| (c) |
assigned the energy assessment lien. |
|
Amended by Chapter 431, 2018 General Session
