Utah Code 17D-2-402. Requirements for lease agreements
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(1) Each lease agreement between a local building authority and its creating local entity shall:
Terms Used In Utah Code 17D-2-402
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Creating local entity: means the local entity that creates or created the local building authority. See Utah Code 17D-2-102
- Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
- Local entity: means a county, city, town, school district, special district, or special service district. See Utah Code 17D-2-102
- 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.
- Project: means an improvement, facility, property, or appurtenance to property that a local entity is permitted under law to own or acquire, whether located inside or outside the local entity's boundary, including:(8)(a) a public building or other structure of any kind; and(8)(b) a joint or partial interest in the improvement, facility, property, or appurtenance to property. See Utah Code 17D-2-102
- Property: includes both real and personal property. See Utah Code 68-3-12.5
(1)(a) provide for the payment of lease payments sufficient:(1)(a)(i) to pay:(1)(a)(i)(A) the principal of and interest on local building authority bonds the proceeds of which were used to construct, acquire, improve, or extend the project;(1)(a)(i)(B) all fees and expenses of trustees and paying agents for bonds described in Subsection (1)(a)(i)(A); and(1)(a)(i)(C) all costs of maintaining and operating the project; and(1)(a)(ii) to accumulate any reasonable reserve that the local building authority considers necessary;(1)(b) provide that the creating local entity, if not in default under the lease agreement, may:(1)(b)(i) subject to Subsection (2), renew the lease for a fixed term beyond the initial term by giving specified notice before the expiration of the initial term; and(1)(b)(ii) subject to Subsection (3) and the terms of the lease agreement, purchase the leased property on a date fixed in the agreement;(1)(c) provide that a creating local entity under the lease agreement is not under any obligation:(1)(c)(i) to purchase the leased property; or(1)(c)(ii) to a creditor, shareholder, or security holder of the local building authority; and(1)(d) require that:(1)(d)(i) title to the project vest in the creating local entity upon payment in full of all outstanding local building authority bonds issued to construct, acquire, improve, or extend a project; and(1)(d)(ii) any remaining assets and net earnings of the local building authority be paid to the creating local entity upon dissolution of the local building authority, as provided in Section 17D-2-702.
(2) The term of a lease agreement under this part, including any renewal of the lease agreement, may not exceed the lesser of:
(2)(a) the estimated useful life of the project, as certified under Subsection 17D-2-302(1); and
(2)(b) 40 years.
(3) The purchase price of leased property under Subsection (1)(b)(ii) may not exceed the project costs that the local building authority actually invested in the project.