Energy Assessment Bonds and Refunding Assessment Bonds

Utah Code tit. 11, ch. 11-42a, pt. 11-42a-P4

in effect

Utah Code § 11-42a-401 Local entity may authorize the issuance of energy assessment bonds -- Limit on amount of bonds -- Features of energy assessment bonds.

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. (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; (iii) is issued in registered form as provided in Title 15, Chapter 7, Registered Public Obligations Act; (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

Utah Code § 11-42a-402 Energy assessment bond not a local entity's general obligation -- Liability and responsibility of a local entity issuing an energy assessment bond -- No state liability.

11-42a-402. Energy assessment bond not a local entity's general obligation -- Liability and responsibility of a local entity issuing an energy assessment bond -- No state liability. (1) (a) An energy assessment bond that a local entity issues under this chapter: (i) is a limited obligation of the local entity; and (ii) does not constitute nor give rise to: (A) a general obligation or liability of the local entity or the state; or (B) a charge against the general credit or taxing powers of the local entity or the state. (b) The local entity shall ensure that the limitation described in Subsection (1)(a) is plainly stated upon the face of the bond. (c) The assessments and the property upon which the energy assessment lien is recorded are the sole securities for an energy assessment bond. (2) (a) A local entity that issues an energy assessment bond is not liable and may not obligate itself for payment of the bond, except for a fund that the local entity creates and receives from assessments against which the bond is issued. (b) Unless otherwise provided in this chapter, a local entity that issues an energy assessment bond is responsible for: (i) the lawful levy of all assessments; and (ii) the faithful accounting, collection, settlement, and payment of assessments. Enacted by Chapter 470, 2017 General Session

Utah Code § 11-42a-403 Refunding assessment bonds.

11-42a-403. Refunding assessment bonds. (1) A local entity may, by a resolution adopted by the governing body, authorize the issuance of a refunding assessment bond as provided in this section, to repay prior bonds in whole or in part, whether at or before the maturity of the prior bonds, at stated maturity, upon redemption, or upon declaration of maturity. (2) (a) Subject to Subsection (2)(b), the issuance of a refunding assessment bond is governed by Title 11, Chapter 27, Utah Refunding Bond Act. (b) If there is a conflict between a provision of Title 11, Chapter 27, Utah Refunding Bond Act, and a provision of this part, the provision of this part governs. (3) In issuing a refunding assessment bond, the local entity shall require the refunding assessment bond and interest on the bond to be payable from and secured, to the extent the prior bonds were payable from and secured, by: (a) the same assessments; or (b) the reduced assessments adopted by the governing body under Section 11-42a-404. (4) A refunding assessment bond: (a) is payable solely from the sources described in Subsection (3); (b) matures no later than one year after the date of final maturity of the prior bonds; (c) does not mature at a time or bear interest at a rate that will cause the local entity to be unable to pay the bond when due from the sources listed in Subsection (3); (d) bears interest as the governing body determines and subject to the provisions relating to interest in Section 11-42a-401; and (e) pays one or more issues of the issuing local entity's prior bonds. (5) If the bond refunds two or more issues of a local entity's prior bonds, the local entity may issue the bond in one or more series. Enacted by Chapter 470, 2017 General Session

Utah Code § 11-42a-404 Reducing assessments after issuance of refunding assessment bonds -- Retroactive effect.

11-42a-404. Reducing assessments after issuance of refunding assessment bonds -- Retroactive effect. (1) Each local entity that issues a refunding assessment bond shall adopt a resolution or ordinance amending the previously adopted energy assessment resolution or ordinance that: (a) reduces, as determined by the local entity's governing body: (i) the assessments levied under the previous resolution or ordinance; (ii) the interest payable on the assessments levied under the previous resolution or ordinance; or (iii) both the assessments levied under the previous resolution or ordinance and the interest payable on those assessments; (b) allocates the reductions under Subsection (1)(a) so the then unpaid assessments levied against benefitted property within the assessment area and the unpaid interest on those assessments receive a proportionate share of the reductions; (c) states the amounts of the reduced payment obligation for each property assessed in the prior resolution or ordinance; and (d) states the effective date of any reduction in the assessment levied in the prior resolution or ordinance. (2) In a resolution or ordinance described in Subsection (1), the local entity is not required to describe each block, lot, part of a block or lot, tract, or parcel of property assessed. (3) The local entity shall ensure that each reduction under Subsection (1)(a) is equal to the amount by which the principal, interest, or combined principal and interest payable on the refunding assessment bond, after accounting for incidental refunding costs associated with the refunding assessment bond, is less than the amount of principal, interest, or combined principal and interest payable on the prior bonds. (4) A reduction under Subsection (1)(a) does not apply to an assessment or interest paid before the reduction. (5) A resolution or ordinance under Subsection (1) may not become effective before the date when any principal, interest, redemption premium on the prior bonds, and advances under Subsection 11-42-607(5)(a) are fully paid or legally considered to be paid. (6) Except for the amount of reduction to a prior assessment or interest on a prior assessment, neither the issuance of a refunding assessment bond nor the adoption of a resolution or ordinance under Subsection (1) affects: (a) the validity or continued enforceability of a prior assessment or interest on the assessment; or (b) the validity, enforceability, or priority of an energy assessment lien. (7) Each reduction of a prior assessment and the interest on the assessment continues to exist in favor of the refunding assessment bonds. (8) Even after payment in full of the prior bonds that a refunding assessment bond refunds, an energy assessment lien continues to exist to secure payment of: (a) the reduced payment obligations; (b) the penalties and costs of collection of those obligations; and (c) the refunding assessment bond. (9) A lien securing a reduced payment obligation from which a refunding assessment bond is payable and by which the bond is secured is subordinate to an energy assessment lien that secures the original or prior assessment and prior bonds until the prior bonds are paid in full or legally considered to be paid in full. (10) Unless prior bonds are paid in full simultaneously with the issuance of a refunding assessment bond, the local entity shall: (a) irrevocably set aside the proceeds of the refunding assessment bond in an escrow or other separate account; and (b) pledge the account described in Subsection (10)(a) as security for the payment of the prior bonds, the refunding assessment bond, or both. (11) This part applies to any refunding assessment bond: (a) regardless of whether the local entity already issued the bond; and (b) regardless of whether the local entity issued the prior bonds that the bond refunded under prior law and regardless of whether that law is currently in effect. Enacted by Chapter 470, 2017 General Session

Source: Utah Office of Legislative Research and General Counsel (le.utah.gov)URL: https://le.utah.gov/xcode/Title11/Chapter42A/11-42a-P4.html?v=C11-42a-P4_2017032820170328Fetched: 10/26/2026