Except as provided in Subsections (3) and (7), if a district intends to issue general obligation bonds, the district shall first obtain the approval of district voters for issuance of the bonds at an election held for that purpose as provided in Title 11, Chapter 14, Local Government Bonding Act.
Terms Used In Utah Code 17B-1-1102
Appraisal: A determination of property value.
Bond: means :
(a)
a written obligation to repay borrowed money, whether denominated a bond, note, warrant, certificate of indebtedness, or otherwise; and
(b)
a lease agreement, installment purchase agreement, or other agreement that:
(i)
includes an obligation by the district to pay money; and
Cemetery maintenance district: means a special district that operates under and is subject to the provisions of this chapter and Chapter 2a, Part 1, Cemetery Maintenance District Act, including an entity that was created and operated as a cemetery maintenance district under the law in effect before April 30, 2007. See Utah Code 17B-1-102
Contract: A legal written agreement that becomes binding when signed.
Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
Drainage district: means a special district that operates under and is subject to the provisions of this chapter and Chapter 2a, Part 2, Drainage District Act, including an entity that was created and operated as a drainage district under the law in effect before April 30, 2007. See Utah Code 17B-1-102
Fair market value: The price at which an asset would change hands in a transaction between a willing, informed buyer and a willing, informed seller.
Fire protection district: means a special district that operates under and is subject to the provisions of this chapter and Chapter 2a, Part 3, Fire Protection District Act, including an entity that was created and operated as a fire protection district under the law in effect before April 30, 2007. See Utah Code 17B-1-102
Improvement district: means a special district that operates under and is subject to the provisions of this chapter and Chapter 2a, Part 4, Improvement District Act, including an entity that was created and operated as a county improvement district under the law in effect before April 30, 2007. See Utah Code 17B-1-102
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
Irrigation district: means a special district that operates under and is subject to the provisions of this chapter and Chapter 2a, Part 5, Irrigation District Act, including an entity that was created and operated as an irrigation district under the law in effect before April 30, 2007. See Utah Code 17B-1-102
Lawsuit: A legal action started by a plaintiff against a defendant based on a complaint that the defendant failed to perform a legal duty, resulting in harm to the plaintiff.
Metropolitan water district: means a special district that operates under and is subject to the provisions of this chapter and Chapter 2a, Part 6, Metropolitan Water District Act, including an entity that was created and operated as a metropolitan water district under the law in effect before April 30, 2007. See Utah Code 17B-1-102
Mosquito abatement district: means a special district that operates under and is subject to the provisions of this chapter and Chapter 2a, Part 7, Mosquito Abatement District Act, including an entity that was created and operated as a mosquito abatement district under the law in effect before April 30, 2007. See Utah Code 17B-1-102
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.
Person: means an individual, corporation, partnership, organization, association, trust, governmental agency, or other legal entity. See Utah Code 17B-1-102
Public transit district: means a special district that operates under and is subject to the provisions of this chapter and Chapter 2a, Part 8, Public Transit District Act, including an entity that was created and operated as a public transit district under the law in effect before April 30, 2007. See Utah Code 17B-1-102
Real property: Land, and all immovable fixtures erected on, growing on, or affixed to the land.
Service area: means a special district that operates under and is subject to the provisions of this chapter and Chapter 2a, Part 9, Service Area Act, including an entity that was created and operated as a county service area or a regional service area under the law in effect before April 30, 2007. See Utah Code 17B-1-102
Special district: means a limited purpose local government entity, as described in Section 17B-1-103, that operates under, is subject to, and has the powers described in:
Water conservancy district: means a special district that operates under and is subject to the provisions of this chapter and Chapter 2a, Part 10, Water Conservancy District Act, including an entity that was created and operated as a water conservancy district under the law in effect before April 30, 2007. See Utah Code 17B-1-102
(2)
General obligation bonds shall be secured by a pledge of the full faith and credit of the district, subject to, for a water conservancy district, the property tax levy limits of Section 17B-2a-1006.
A special district may not issue general obligation bonds if the issuance of the bonds will cause the outstanding principal amount of all of the district’s general obligation bonds to exceed the amount that results from multiplying the fair market value of the taxable property within the district, as determined under Subsection 11-14-301(3)(b), by a number that is:
(i)
.05, for a basic special district, except as provided in Subsection (7);
(ii)
.004, for a cemetery maintenance district;
(iii)
.002, for a drainage district;
(iv)
.004, for a fire protection district;
(v)
.024, for an improvement district;
(vi)
.1, for an irrigation district;
(vii)
.1, for a metropolitan water district;
(viii)
.0004, for a mosquito abatement district;
(ix)
.03, for a public transit district;
(x)
.12, for a service area; or
(xi)
.05 for a municipal services district.
(b)
Bonds or other obligations of a special district that are not general obligation bonds are not included in the limit stated in Subsection (4)(a).
(5)
A district may not be considered to be a municipal corporation for purposes of the debt limitation of the Utah Constitution, Article XIV, Section 4.
(6)
Bonds issued by an administrative or legal entity created under Title 11, Chapter 13, Interlocal Cooperation Act, may not be considered to be bonds of a special district that participates in the agreement creating the administrative or legal entity.
(7)
(a)
As used in this Subsection (7), “property owner district” means a special district whose board members are elected by property owners, as provided in Subsection 17B-1-1402(1)(b).
(b)
A property owner district may issue a general obligation bond with the consent of:
(i)
the owners of all property within the district; and
(ii)
all registered voters, if any, within the boundary of the district.
(c)
A property owner district may use proceeds from a bond issued under this Subsection (7) to fund:
(i)
the acquisition and construction of a system or improvement authorized in the district’s creation resolution; and
(ii)
a connection outside the boundary of the district between systems or improvements within the boundary of the district.
(d)
The consent under Subsection (7)(b) is sufficient for any requirement necessary for the issuance of a general obligation bond.
(e)
A general obligation bond issued under this Subsection (7):
(i)
shall mature no later than 40 years after the date of issuance; and
(ii)
is not subject to the limit under Subsection (4)(a)(i).
(f)
(i)
A property owner district may not issue a general obligation bond under this Subsection (7) if the issuance will cause the outstanding principal amount of all the district’s general obligation bonds to exceed one-half of the market value of all real property within the district.
(ii)
Market value under Subsection (7)(f)(i) shall:
(A)
be based on the value that the real property will have after all improvements financed by the general obligation bonds are constructed; and
(B)
be determined by appraisal by an appraiser who is a member of the Appraisal Institute.
(g)
With respect to a general obligation bond issued under this Subsection (7), the board of a property owner district may, by resolution, delegate to one or more officers of the district, the authority to:
(i)
approve the final interest rate, price, principal amount, maturity, redemption features, and other terms of the bond;
(ii)
approve and execute a document relating to the issuance of the bond; and
(iii)
approve a contract related to the acquisition and construction of an improvement, facility, or property to be financed with proceeds from the bond.
(h)
(i)
A person may commence a lawsuit or other proceeding to contest the legality of the issuance of a general obligation bond issued under this Subsection (7) or any provision relating to the security or payment of the bond if the lawsuit or other proceeding is commenced within 30 days after the publication of:
(A)
the resolution authorizing the issuance of the general obligation bond; or
(B)
a notice of the bond issuance containing substantially the items required under Subsection 11-14-316(2).
(ii)
Following the period described in Subsection (7)(h)(i), no person may bring a lawsuit or other proceeding to contest for any reason the regularity, formality, or legality of a general obligation bond issued under this Subsection (7).
(i)
(i)
A property owner district that charges and collects an impact fee or other fee on real property at the time the real property is sold may proportionally pay down a general obligation bond issued under this Subsection (7) from the money collected from the impact fee or other fee.
(ii)
A property owner district that proportionally pays down a general obligation bond under Subsection (7)(i)(i) shall reduce the property tax rate on the parcel of real property on which the district charged and collected an impact fee or other charge, to reflect the amount of outstanding principal of a general obligation bond issued under this Subsection (7) that was paid down and is attributable to that parcel.
(j)
If a property owner fails to pay a property tax that the property owner district imposes in connection with a general obligation bond issued under this Subsection (7), the district may impose a property tax penalty at an annual rate of .07, in addition to any other penalty allowed by law.
