S.B. 116

1

LOCAL GOVERNMENT VARIABLE RATE
2 BONDING AUTHORITY
3 2002 GENERAL SESSION
4 STATE OF UTAH
5 Sponsor: D. Chris Buttars
6 This act modifies provisions relating to County Improvement Districts and Municipal
7 Improvement Districts. The act provides authority to use variable rate bonds to encourage
8 community improvements, affordable housing, and commercial/industrial developments.
9 The act makes technical changes.
10 This act affects sections of Utah Code Annotated 1953 as follows:
11 AMENDS:
12 17A-3-210, as last amended by Chapter 1, Laws of Utah 2000
13 17A-3-220, as renumbered and amended by Chapter 186, Laws of Utah 1990
14 17A-3-227, as renumbered and amended by Chapter 186 and last amended by Chapter 214,
15 Laws of Utah 1990
16 17A-3-228, as renumbered and amended by Chapter 186, Laws of Utah 1990
17 17A-3-310, as renumbered and amended by Chapter 186 and last amended by Chapter 214,
18 Laws of Utah 1990
19 17A-3-320, as renumbered and amended by Chapter 186, Laws of Utah 1990
20 17A-3-328, as renumbered and amended by Chapter 186, Laws of Utah 1990
21 17A-3-329, as renumbered and amended by Chapter 186 and last amended by Chapter 214,
22 Laws of Utah 1990
23 Be it enacted by the Legislature of the state of Utah:
24 Section 1. Section 17A-3-210 is amended to read:
25 17A-3-210. Interim warrants.
26 (1) (a) As work proceeds in a special improvement district, the governing body may issue
27 interim warrants against the district:

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- 2 - 28 (i) for an amount not to exceed 90% of the value of the work previously done, upon
29 estimates of the project engineer;
30 (ii) after completion of the work and acceptance of the work by the project engineer and
31 by the governing body, for 100% of the value of the work completed; and
32 (iii) where improvements in the district require the acquisition of property, for not more
33 than the property price.
34 (b) Subject to the provisions of Section 17A-3-209 , the governing body may issue warrants
35 to:
36 (i) a contractor, to apply at par value on the contract price for the improvements; or
37 (ii) to the owner of the acquired property, to apply at par value on the property price.
38 (c) The governing body may also issue and sell warrants at not less than par value in a
39 manner determined by the governing body and apply the proceeds of the sale towards payment of
40 the contract price and property price.
41 (2) (a) Interim warrants shall bear interest from date of issue until paid.
42 (b) The governing body shall [fix] specify the interest rate or rates, which may be a fixed
43 rate or rates, a variable rate or rates, or a combination of fixed and variable rates. In the case of
44 a variable interest rate or rates, the governing body shall specify the basis upon which the rate or
45 rates shall be determined from time to time, the manner in which and schedule upon which the rate
46 or rates shall be adjusted, and a maximum rate that the interim warrants may bear.
47 (c) The governing body may fix a maturity date for each interim warrant. If a warrant
48 matures before the governing body has available to it the sources of payment itemized in
49 Subsection (3)(a), (b), (c), or (d), it may authorize the issuance of a new interim warrant to pay the
50 principal and interest on the warrant falling due.
51 (d) Interest accruing on interim warrants shall be included as a cost of the improvements.
52 (3) The governing body shall pay interim warrants and interest on the warrants from one
53 or more of the following sources:
54 (a) issuance of or proceeds from the sale of special improvement bonds issued against the
55 district;
56 (b) cash received from the payment for improvements;
57 (c) payment of assessments not pledged to the payment of the bonds;
58 (d) the guaranty fund if appropriate; or

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(e) proceeds of an interim warrant.
60 (4) With the authorization of the governing body, the governing entity may purchase any
61 or all of the interim warrants issued against the district and may use the governing entity's general
62 funds for this purchase.
63 Section 2. Section 17A-3-220 is amended to read:
64 17A-3-220. Period for paying assessments -- Frequency of installments -- Interest.
65 (1) Except as provided in Section 17A-3-219 , an assessment shall be levied at one time
66 upon the property. The governing body may provide in the ordinance levying the assessment that
67 all or such portion of the assessment as is designated in the ordinance may be paid in installments
68 over a period of time not exceeding 20 years from the effective date of the ordinance levying the
69 assessment, except that in any case where the installments are to be payable over a period of time
70 exceeding [10] ten years from the effective date, the governing body shall find and determine that
71 the improvements for which the assessment are made have a reasonable, useful life for the full
72 period during which the installments are payable or that it would otherwise be in the best interests
73 of the governing entity and of the owners of property to be assessed to provide for payment of the
74 assessments over a period in excess of [10] ten years.
75 (2) Installments shall be payable at least annually but may be payable at more frequent
76 intervals as provided by the ordinance levying the assessment, except that if the ordinance provides
77 for payment of the assessment over a period in excess of [10] ten years from the effective date of
78 the same, the ordinance may also provide that no installments of these assessments shall be
79 payable during all or any portion of the period ending three years after this effective date.
80 (3) Where the assessment is payable in installments, the ordinance shall provide that the
81 unpaid balance of the assessment shall bear interest at a rate or rates which may be a fixed rate or
82 rates, a variable rate or rates, or a combination of fixed and variable rates, from the effective date
83 of the ordinance or from such other date as may be specified in the ordinance until due S FOR THE
83a PURPOSE OF PAYING THE COSTS RELATING TO THE SPECIAL IMPROVEMENT DISTRICT AS THE
83b GOVERNING BODY MAY SPECIFY, INCLUDING INTEREST ON ANY BONDS ISSUED UNDER
83c SECTIONS 17A-3-227 OR 17A-3-229, ONGOING COSTS OF THE GOVERNING ENTITY INCURRED WITH
83d RESPECT TO ADMINISTRATION OF THE SPECIAL IMPROVEMENT DISTRICT, AND COSTS, IF ANY,
83e INCURRED WITH RESPECT TO SECURING A LETTER OF CREDIT OR OTHER INSTRUMENT TO
83f SECURE PAYMENT OR REPURCHASE OF ANY BONDS OR RETAINING A REMARKETING AGENT OR
83g AN INDEXING AGEN T s ; except that
84 where the assessment is for light service or park maintenance, interest shall be charged only from
85 and after the due date of each installment and the first installment for the assessment shall be due
86 15 days after the effective date of the ordinance. If interest is to accrue on any assessment at a

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variable rate or rates, the governing body shall specify the basis upon which the rate or rates shall
88 be determined from time to time, the manner in which and schedule upon which the rate or rates
89 shall be adjusted, and a maximum rate that the assessments may bear. Interest shall be paid in

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addition to the amount of each installment annually or at more frequent intervals as provided in
91 the ordinance levying the assessment.
92 Section 3. Section 17A-3-227 is amended to read:
93 17A-3-227. Special improvement refunding bonds.
94 (1) (a) The governing body may issue special improvement refunding bonds to refund
95 special improvement bonds issued under authority of this part.
96 (b) The governing body may adopt a resolution refunding the special improvement bonds
97 in whole or in part or at or in advance of their maturity, whether at stated maturity or upon
98 redemption or declaration of maturity.
99 (2) In issuing the special improvement refunding bonds, the governing body shall comply
100 with:
101 (a) the requirements of this part;
102 (b) the provisions of Title 11, Chapter 27, Utah Refunding Bond Act, as provided in
103 Subsection (13); and
104 (c) the requirements of this section.
105 (3) Special improvement refunding bonds shall:
106 (a) be payable solely from the same funds from which the prior bonds are payable;
107 (b) mature not later than the date of final maturity of the prior bonds;
108 (c) not mature or bear interest at any time in amounts which cannot be paid when due from
109 the payments of the assessments, interest on assessments, or the reduced payment obligations, as
110 applicable, assuming that payments of these assessments, reduced payment obligations, and
111 interest are paid when due, together with the amounts of any prior payments or prepayments of
112 these assessments, reduced payment obligations, and interest previously made and that remain
113 available for payment of the special improvement refunding bonds; and
114 (d) bear interest [payable semiannually or annually,] as determined by the governing body
115 in accordance with S [ Subsection 17A-3-228 (5) ] SUBSECTIONS 17A-3-228(2) AND (5 ) s .
116 (4) Special improvement refunding bonds may:
117 (a) be issued in bearer form, with or without interest coupons attached, or in registered
118 form in accordance with Title 15, Chapter 7, Registered Public Obligations Act, as determined by
119 the governing body;
120 (b) as determined by the governing body:

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- 5 - 121 (i) be in a form and contain details consistent with this part;
122 (ii) be payable at a place or places;
123 (iii) be delivered in exchange for the prior bonds; or
124 (iv) be sold in a manner, at terms, and with details consistent with this part, and at a price
125 or prices above, at, or below par;
126 (c) be callable for redemption prior to maturity upon terms, conditions, and notice, and
127 premium, if any, to be paid, as the governing body determines, but no special improvement
128 refunding bonds are callable for redemption unless the terms and conditions of redemption are
129 stated on their face; and
130 (d) be issued for the purpose of refunding one or more issues of prior bonds of a governing
131 entity and, if issued to refund two or more issues of prior bonds, be issued in a single series to
132 refund all of the issues of prior bonds to be refunded, or in two or more series to refund one or
133 more of these issues of prior bonds.
134 (5) The governing body may provide for the payment of incidental refunding costs of the
135 special improvement refunding bonds as follows:
136 (a) by advancing funds from the general funds or other funds of the governing entity, if the
137 governing body:
138 (i) finds and determines that this advance of the governing entity's funds is in the best
139 interest of the governing entity and its citizens, including, without limitation, the owners of
140 property within the district; and
141 (ii) provides that the assessments and the interest on assessments from which the prior
142 bonds are payable may not be reduced during whatever period is necessary to provide funds from
143 the payment of these assessments and the interest on assessments with which to reimburse the
144 governing entity for all funds advanced by it for the payment of incidental refunding costs, together
145 with interest on these funds at a rate or rates equal to the interest rate or rates payable on these
146 assessments;
147 (b) from any premium received from the sale of the special improvement refunding bonds;
148 (c) from any earnings on the investment of the proceeds of the special improvement
149 refunding bonds pending their use to redeem the prior bonds;
150 (d) from any other sources legally available to the governing entity for this purpose; or
151 (e) from any combination of Subsections (5)(a) through (d).

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- 6 - 152 (6) (a) The governing entity shall designate an official of the governing entity to execute
153 a manual or facsimile signature on special improvement refunding bonds and any interest coupons
154 attached to them.
155 (b) The governing entity shall designate another official to attest, by manual or facsimile
156 signature, to the signature of the official executing the special improvement refunding bonds and
157 any interest coupons.
158 (c) In addition to these signatures, any special improvement refunding bond may include
159 a certificate signed by the manual or facsimile signature of an authenticating agent, registrar,
160 transfer agent, or the like.
161 (d) At least one signature of an authorized official or other person required or permitted
162 to be placed on the special improvement refunding bonds shall be a manual signature.
163 (e) Special improvement refunding bonds and interest coupons bearing the signatures,
164 manual or facsimile, of officers in office on the date of execution of the bonds or coupons are valid
165 and binding obligations, even if before the delivery of the special improvement refunding bonds
166 or interest coupons any or all of the persons whose signatures appear on them have ceased to be
167 officers of the governing entity.
168 (7) (a) The governing entity shall make the special improvement refunding bonds and the
169 interest on them payable from and secured by:
170 (i) the same assessments and interest on assessments from which the prior bonds were
171 payable and were secured, as they may be reduced by the amending ordinance described in
172 Subsection (10); and
173 (ii) the special improvement guaranty fund if the prior bonds were payable from and
174 secured by this fund.
175 (b) The governing entity may make the special improvement refunding bonds and the
176 interest on them payable from and secured by the special improvement guaranty fund.
177 (c) The governing body shall:
178 (i) adopt an ordinance amending the prior ordinance, as provided in Subsection (10); and
179 (ii) give notice of any reduced payment obligations to the owners of properties assessed
180 in the prior ordinance, as provided in Subsection (11).
181 (d) (i) Neither the amendment of the prior ordinance nor the issuance of special
182 improvement refunding bonds affects the validity of the continued enforceability of the original

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- 7 - 183 or any other prior assessments or the interest on assessments, except for the amounts of any
184 reductions to the original or prior assessments or interest on assessments.
185 (ii) Neither this amendment nor the issuance of the special improvement refunding bonds
186 affects the validity of the enforceability or priority of the lien on the properties upon which the
187 assessments were levied, except for the amounts of any reductions to the original or prior
188 assessments or interest on assessments.
189 (iii) All these reductions to the original or prior assessments and the interest on
190 assessments shall continue to exist in favor of the special improvement refunding bonds.
191 (iv) All these liens and priorities shall continue to exist against these properties to secure
192 the payment of the reduced payment obligations and the special improvement refunding bonds in
193 the same manner and, except for the amounts of any reductions to the original or prior assessments
194 or interest on assessments, to the same extent as the original and any other prior assessments,
195 interest on assessments, and the prior bonds were secured by the original assessments, interest on
196 assessments, and the original liens and priorities.
197 (e) It is the intent of the Legislature that there be no impairment of the validity of, or,
198 except with respect to the amounts of these reductions to the original or prior assessments or
199 interest on them, of the enforceability or priority of any of these assessments, interest on them, or
200 liens as a result of the amendment of the prior ordinance or the issuance of the special
201 improvement refunding bonds.
202 (8) (a) The lien securing any reduced payment obligations from which the special
203 improvement refunding bonds are payable and secured is subordinate to the lien securing the
204 original or prior assessments, interest on assessments, and the prior bonds until the principal of,
205 interest on, and redemption premium, if any, on the prior bonds are fully paid.
206 (b) Following this payment, this lien shall continue as provided in Section 17A-3-223 , as
207 security for the payment of the reduced payment obligations, the penalties and costs of collection
208 of those obligations, and the payment of the principal of, interest on, and redemption premium, if
209 any, on the special improvement refunding bonds.
210 (9) (a) Unless the principal of, interest on, and redemption premiums, if any, on the prior
211 bonds are paid simultaneously with the issuance of the special improvement refunding bonds, the
212 governing entity shall irrevocably set aside the proceeds of the special improvement refunding
213 bonds in an escrow or other separate account.

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- 8 - 214 (b) The governing entity shall pledge that account as security for the payment of the
215 principal of, interest on, and redemption premiums, if any, on the special improvement refunding
216 bonds or the prior bonds, or both.
217 (10) The governing entity shall ensure that the amending ordinance required by Subsection
218 (7) meets the following requirements:
219 (a) (i) Subject to the provisions of Subsection (5)(a), the amount by which the principal
220 or interest, or both, payable on the special improvement refunding bonds is less than the amount
221 of principal or interest, or both, payable on the prior bonds shall be applied to reduce the
222 assessments levied by the prior ordinance or the interest payable on those assessments, or both, as
223 determined by the governing body.
224 (ii) Any reductions of the assessments levied by the prior ordinance or of interest payable
225 on those assessments, or both, shall be made in such manner that the then unpaid assessments
226 levied against each of the assessed properties and the unpaid interest on these assessments shall
227 receive a proportionate share of the reductions.
228 (iii) These reductions do not apply to assessments and interest on assessments that have
229 been paid.
230 (b) The amending ordinance shall either:
231 (i) state the amounts of the reduced payment obligations for each of the properties assessed
232 in the prior ordinance; or
233 (ii) incorporate by reference a revised assessment list approved by the governing body that
234 contains these reduced payment obligations.
235 (c) The amending ordinance need not describe each block, lot, part of block or lot, tract,
236 or parcel of property assessed.
237 (d) The governing entity shall comply with the requirements of Subsection 17A-3-218 (1)
238 regarding publication and effective date with respect to the amending ordinance.
239 (e) (i) The amending ordinance shall state the effective date or dates of any reductions in
240 the assessments and the interest on assessments levied in the prior ordinance.
241 (ii) The governing entity may not set an effective date that is before the date when all of
242 the principal of, interest on, and any redemption premiums on the prior bonds and any advances
243 of funds made under Subsection (5)(a) are fully paid.
244 (11) (a) The notice to owners of assessed properties of reductions in their assessments and

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- 9 - 245 interest payments, referred to in Subsection (7)(c)(ii), shall:
246 (i) identify the property subject to the assessment; and
247 (ii) state the amount of the reduced payment obligations that will be payable from and after
248 the applicable date stated in the amending ordinance.
249 (b) The notice may contain any other information that the governing body considers
250 appropriate.
251 (12) (a) The governing entity shall mail the notice referred to in Subsection (7)(c)(ii),
252 postage prepaid, not less than 21 days before the date the first payment of the reduced assessments
253 becomes due addressed to "owner" at the street number of each piece of improved assessed
254 property.
255 (b) If a street number has not been assigned, then the post office box, rural route number,
256 or any other mailing address of the improved property shall be used for the mailing of the notice.
257 (c) The governing body may include the notice with or in any other notices regarding the
258 payment of assessments and interest on assessments sent to the property owners in the district
259 within the time and addressed as stated in this Subsection (12).
260 (d) Neither the failure to give notice nor any defect in its content or the manner or time in
261 which it is given affects the validity or enforceability of the amending ordinance or the special
262 improvement refunding bonds or the validity, enforceability, or priority of the reduced payment
263 obligations.
264 (e) Whether or not this notice is given, no other notice is required to be given to the owners
265 of the assessed properties in connection with the issuance of the special improvement refunding
266 bonds.
267 (13) To the extent it is not inconsistent with this part, Title 11, Chapter 27, Utah
268 Refunding Bond Act, applies to the issuance of special improvement refunding bonds.
269 (14) The provisions of this part relating to special improvement refunding bonds apply to
270 all special improvement bonds issued and outstanding or which may be issued and outstanding in
271 the future.
272 (15) This part applies to all special improvement refunding bonds issued under this part,
273 even though the prior bonds that are refunded by those special improvement refunding bonds were
274 issued under any other law, including, without limitation, any law that has been repealed.
275 Section 4. Section 17A-3-228 is amended to read:

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17A-3-228. Bonds.
277 (1) Fifteen days or more after the effective date of any ordinance levying an assessment
278 in a special improvement district, the governing body levying the assessment, by ordinance or
279 resolution, may authorize the issuance of special improvement bonds to pay the costs of the
280 improvements in the district against the funds created by the assessment. [Special] The aggregate
281 principal amount of the special improvement bonds so authorized shall not exceed the unpaid
282 balance of the assessments at the end of this 15-day period[,]. The special improvement bonds
283 shall be fully negotiable for all purposes, shall mature at such time or times not exceeding the
284 period of time over which installments of the assessments are due and payable plus one year, shall
285 bear interest at the lowest rate or rates reasonably obtainable, shall be sold at the prices, either at,
286 in excess of, or below their face value, shall be payable at the place or places, shall be in the form,
287 and generally shall be issued and shall be sold in the manner and with those details as may be
288 provided by ordinance or resolution. The bonds shall be dated no earlier than the effective date
289 of the ordinance levying the assessment.
290 (2) Except for special improvement bonds issued for light service or park maintenance
291 purposes (which bonds shall bear interest only from their due date), interest shall be paid
292 semiannually S [ or ] , s annually S [ as determined ] , OR AT SUCH OTHER INTERVALS OR UPON
292a SUCH OTHER SCHEDULE AS MAY BE SPECIFIE D s by the governing body and may be evidenced by
292b interest
293 coupons attached to the bonds.
294 (3) The governing body may provide that the bonds shall be callable for redemption prior
295 to maturity and fix the terms and conditions of redemption, including the notice to be given and
296 the premium, if any, to be paid. No bonds are callable for redemption unless the terms and
297 conditions of redemption are stated on the face of the bonds.
298 (4) The bonds shall be signed and may be countersigned by the official or officials of the
299 governing entity (including a member or members of the governing body) as designated by the
300 governing body. If so provided by the governing body, the signatures on the bonds and interest
301 coupons, if any, may be by facsimile signature if at least one signature required or permitted to be
302 placed on the face of the bond is manually signed. Bonds or interest coupons bearing the
303 signatures (manual or facsimile) of officers in office on the date of the execution of them shall be
304 valid and binding obligations notwithstanding that before the delivery of the bonds any or all of
305 the persons whose signatures appear on them shall have ceased to be officers of the governing
306 entity.

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(5) The governing body may provide that the bonds shall bear interest at a fixed rate or
308 rates, a variable rate or rates, or a combination of fixed and variable rates. In the case of a variable
309 interest rate or rates, the governing body shall specify the basis upon which the rate or rates shall
310 be determined from time to time, the manner in which and schedule upon which the rate or rates
311 shall be adjusted, and a maximum rate that the bonds may bear.
312 (6) The governing body may specify terms and conditions under which the bonds bearing
313 interest at a variable interest rate may be converted to bear interest at a fixed interest rate.
314 (7) The governing body may specify terms and conditions under which the S [ county ]
314a GOVERNING ENTIT Y s agrees
315 to repurchase the bonds. The governing body may secure a letter of credit or other instrument to
316 secure payment or repurchase of any bonds. The governing body may engage a remarketing agent
317 and an indexing agent, subject to terms and conditions agreed to by the governing body. The
318 governing body may cause the special improvement district to pay the costs of the foregoing and
319 any similar costs with respect to the bonds.
320 Section 5. Section 17A-3-310 is amended to read:
321 17A-3-310. Interim warrants.
322 (1) (a) As work proceeds in a special improvement district, the governing body may issue
323 interim warrants against the district:
324 (i) as portions of the work are completed, for not more than 90% of the value of the
325 completed work as estimated by the engineer of the municipality;
326 (ii) after completion of the work and acceptance of the work by the engineer of the
327 municipality and by the governing body, for 100% of the value of the work completed; and
328 (iii) where improvements in the district require the acquisition of property, for not more
329 than the property price.
330 (b) Subject to the provisions of Section 17A-3-309 , the governing body may issue warrants
331 to:
332 (i) a contractor, to apply at par value on the contract price for the improvements; or
333 (ii) to the owner of the property, to apply at par value on the property price.
334 (c) The governing body may also issue and sell the warrants at not less than par value in
335 a manner determined by the governing body and apply the proceeds of the sale towards payment
336 of the contract price and property price.
337 (2) (a) Interim warrants shall bear interest from date of issue until paid.

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- 12 - 338 (b) The governing body shall [fix] specify the interest rate or rates, which may be a fixed
339 rate or rates, a variable rate or rates, or a combination of fixed and variable rates. In the case of
340 a variable interest rate or rates, the governing body shall specify the basis upon which the rate or
341 rates shall be determined from time to time, the manner in which and schedule upon which the rate
342 or rates shall be adjusted, and a maximum rate that the interim warrants may bear.
343 (c) The governing body may fix a maturity date for each interim warrant. If a warrant
344 matures before the governing body has available to it the sources of payment itemized in
345 Subsections (3)(a), (b), or (c), it may authorize the issuance of a new warrant to pay the principal
346 and interest on the warrant falling due.
347 (d) Interest accruing on interim warrants shall be included as a cost of the improvements
348 in the special improvement district.
349 (3) The governing body shall pay interim warrants and interest on the warrants from one
350 or more of the following sources:
351 (a) proceeds from the sale of special improvement bonds issued against the district;
352 (b) cash received from the payment of assessments not pledged to the payment of the
353 bonds;
354 (c) improvement revenues not pledged to the payment of the bonds; or
355 (d) proceeds of an interim warrant.
356 Section 6. Section 17A-3-320 is amended to read:
357 17A-3-320. Payment of assessments in installments -- Frequency -- Interest.
358 (1) An assessment shall be levied at one time upon the property. The governing body may
359 provide in the ordinance levying the assessment that all or such portion of the assessment as is
360 designated in the ordinance may be paid in installments over a period of time not exceeding 20
361 years from the effective date of the ordinance levying the assessment, except that in any case where
362 the installments are to be payable over a period of time exceeding [10] ten years from the effective
363 date, the governing body shall find and determine that the improvements for which the assessment
364 are made have a reasonable useful life for the full period during which the installments are payable
365 or that it would otherwise be in the best interests of the municipality and of the owners of property
366 to be assessed to provide for payment of the assessments over a period in excess of [10] ten years.
367 (2) Installments shall be payable at least annually but may be payable at more frequent
368 intervals as provided by the ordinance levying the assessment, except that if the ordinance provides

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for payment of the assessment over a period in excess of [10] ten years from the effective date of
370 the same, the ordinance may also provide that no installments of these assessments shall be
371 payable during all or any portion of the period ending three years after this effective date.
372 (3) Where the assessment is payable in installments, the ordinance shall provide that the
373 unpaid balance of the assessment shall bear interest at a rate or rates, which may be a fixed rate or
374 rates, a variable rate or rates, or a combination of fixed and variable rates, determined by the
375 governing body from the effective date of the ordinance or from such other date as may be
376 specified in the ordinance until due S FOR THE PURPOSE OF PAYING THE COSTS RELATING TO
376a THE SPECIAL IMPROVEMENT DISTRICT AS THE GOVERNING BODY MAY SPECIFY, INCLUDING
376b INTEREST ON ANY BONDS ISSUED UNDER SECTIONS 17A-3-328 OR 17A-3-329, ONGOING COSTS OF
376c THE MUNICIPALITY INCURRED WITH RESPECT TO ADMINISTRATION OF THE SPECIAL
376d IMPROVEMENT DISTRICT, AND COSTS, IF ANY, INCURRED WITH RESPECT TO SECURING A LETTER
376e OF CREDIT OR OTHER INSTRUMENT TO SECURE PAYMENT OR REPURCHASE OF ANY BONDS OR
376f RETAINING A REMARKETING AGENT OR AN INDEXING AGEN T s ; except that where the assessment
376g is for light service or park
377 maintenance, interest shall be charged only from the due date of each installment, and the first
378 installment for any assessment shall be due 15 days after the effective date of the ordinance. If
379 interest is to accrue on any assessment at a variable rate or rates, the governing body shall specify
380 in the ordinance the basis upon which the rate or rates shall be determined from time to time, the
381 manner in which and schedule upon which the rate or rates shall be adjusted, and a maximum rate
382 that the assessments may bear. Interest shall be paid in addition to the amount of each installment
383 annually or at more frequent intervals as provided in the ordinance levying the assessment.
384 Section 7. Section 17A-3-328 is amended to read:
385 17A-3-328. Special improvement bonds.
386 (1) Fifteen days or more after the effective date of any ordinance levying an assessment
387 in a special improvement district, the governing body of the municipality levying the assessment,
388 by ordinance or resolution, may authorize the issuance of special improvement bonds to pay the
389 costs of the improvements in the district against the funds created by the assessment. [Special]
390 The aggregate principal amount of the special improvement bonds so authorized shall not exceed
391 the unpaid balance of the assessments at the end of this 15-day period[,]. The special improvement
392 bonds shall be fully negotiable for all purposes, shall mature at such time or times not exceeding
393 the period of time over which installments of the assessments are due and payable plus one year,
394 shall bear interest at the lowest rate or rates reasonably obtainable, shall be payable at such place
395 or places, shall be in such form, and generally shall be issued and shall be sold in such manner and
396 with such details as may be provided by ordinance or resolution. All these bonds shall be dated

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no earlier than the effective date of the ordinance levying the assessment.
398 (2) Except for special improvement bonds issued for lighting service or park maintenance
399 purposes (which bonds shall bear interest only from the due date), interest shall be paid

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semiannually S [ or ] , s annually S [ as determined ] , OR AT SUCH OTHER INTERVALS OR UPON SUCH
400a OTHER SCHEDULE AS MAY BE SPECIFIE D s by the governing body and may be evidenced by interest
401 coupons attached to the bonds.
402 (3) The governing body may provide that the bonds shall be callable for redemption prior
403 to maturity and fix the terms and conditions of redemption, including the notice to be given and
404 the premium, if any, to be paid. No bonds are callable for redemption unless the terms and
405 conditions of redemption are stated on the face of the bonds.
406 (4) The bonds shall be signed and may be countersigned by any officials of the
407 municipality (including a member or members of the governing body) as designated by the
408 governing body of the municipality. If so provided by the governing body, the signatures on the
409 bonds and interest coupons, if any, may be by facsimile signature if at least one signature required
410 or permitted to be placed on the face of the bond is manually signed. Bonds or interest coupons
411 bearing the signatures (manual or facsimile) of officers in office on the date of execution of them
412 shall be valid and binding obligations notwithstanding that before the delivery of the bonds any
413 or all of the persons whose signatures appear on them shall have ceased to be officers of the
414 municipality.
415 (5) The governing body may provide that the bonds shall bear interest at a fixed rate or
416 rates, a variable rate or rates, or a combination of fixed and variable rates. In the case of a variable
417 interest rate or rates, the governing body shall specify the basis upon which the rate or rates shall
418 be determined from time to time, the manner in which and schedule upon which the rate or rates
419 shall be adjusted, and a maximum rate that the bonds may bear.
420 (6) The governing body may specify terms and conditions under which the bonds bearing
421 interest at a variable interest rate may be converted to bear interest at a fixed interest rate.
422 (7) The governing body may specify terms and conditions under which the municipality
423 agrees to repurchase the bonds. The governing body may secure a letter of credit or other
424 instrument to secure payment or repurchase of any bonds. The governing body may engage a
425 remarketing agent and indexing agent, subject to terms and conditions agreed to by the governing
426 body. The governing body may cause the special improvement district to pay the costs of the
427 foregoing and any similar costs with respect to the bonds.
428 Section 8. Section 17A-3-329 is amended to read:
429 17A-3-329. Special improvement refunding bonds.
430 (1) (a) The governing body may issue special improvement refunding bonds to refund

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Senate 3^rd Reading Amendments 1-24-2002 rd/kmw 431

special improvement bonds issued under authority of this part.
432 (b) The governing body may adopt a resolution refunding the special improvement bonds
433 in whole or in part, at or in advance of their maturity, whether at stated maturity or upon
434 redemption or declaration of maturity.
435 (2) In issuing the special improvement refunding bonds, the governing body shall comply
436 with:
437 (a) the requirements of this part;
438 (b) the provisions of Title 11, Chapter 27, Utah Refunding Bond Act, as provided in
439 Subsection (13); and
440 (c) the requirements of this section.
441 (3) Special improvement refunding bonds shall:
442 (a) be payable solely from the sources described in Subsection (7)(a);
443 (b) mature not later than the date of final maturity of the prior bonds;
444 (c) not mature or bear interest at any time in amounts that cannot be paid when due from
445 the payments of the assessments, interest on assessments, and improvement revenues, or the
446 reduced payment obligations, as applicable, assuming that payments of these assessments,
447 improvement revenues, reduced payment obligations, and interest are paid when due, together with
448 the amounts of any prior payments or prepayments of these assessments, improvement revenues,
449 reduced payment obligations, and interest previously made and that remain available for payment
450 of the special improvement refunding bonds; and
451 (d) bear interest [payable semiannually or annually,] as determined by the governing body
452 in accordance with S [ Subsection 17A-3-328 (5) ] SUBSECTIONS 17A-3-328(2) AND (5) s .
453 (4) Special improvement refunding bonds may:
454 (a) be issued in bearer form, with or without interest coupons attached, or in registered
455 form in accordance with Title 15, Chapter 7, Registered Public Obligations Act, as determined
456 by the governing body;
457 (b) as determined by the governing body:
458 (i) be in a form and contain details consistent with this part;
459 (ii) be payable at a place or places;
460 (iii) be delivered in exchange for the prior bonds; or
461 (iv) be sold in a manner, at terms, and with details consistent with this part, and at a price

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- 16 - 462 or prices above, at, or below par;
463 (c) be callable for redemption prior to maturity upon terms, conditions, and notice, and
464 premium, if any, to be paid, as the governing body determines, but no special improvement
465 refunding bonds are callable for redemption unless the terms and conditions of redemption are
466 stated on their face; and
467 (d) be issued for the purpose of refunding one or more issues of prior bonds of a
468 municipality and, if issued to refund two or more issues of prior bonds, be issued in a single series
469 to refund all of the issues of prior bonds to be refunded, or in two or more series to refund one or
470 more of these issues of prior bonds.
471 (5) The governing body may provide for the payment of incidental refunding costs of the
472 special improvement refunding bonds as follows:
473 (a) by advancing funds from the general fund or other funds of the municipality, if the
474 governing body:
475 (i) finds and determines that this advance of municipal funds is in the best interest of the
476 municipality and its citizens, including, without limitation, the owners of property within the
477 district; and
478 (ii) provides that the assessments, the interest on assessments, and the improvement
479 revenues from which the prior bonds are payable may not be reduced during whatever period is
480 necessary to provide funds from the payment of these assessments, interest on assessments, and
481 improvement revenues with which to reimburse the municipality for all funds advanced by it for
482 the payment of incidental refunding costs, together with interest on these funds at a rate or rates
483 equal to the interest rate or rates payable on these assessments;
484 (b) from any premium received from the sale of the special improvement refunding bonds;
485 (c) from any earnings on the investment of the proceeds of the special improvement
486 refunding bonds pending their use to redeem the prior bonds;
487 (d) from any other sources legally available to the municipality for this purpose; or
488 (e) from any combination of Subsections (5)(a) through (d).
489 (6) (a) The governing body of the municipality shall designate an official of the
490 municipality to execute a manual or facsimile signature on special improvement refunding bonds
491 and any interest coupons attached to them.
492 (b) The governing body of the municipality shall designate another municipal official to

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- 17 - 493 attest, by manual or facsimile signature, to the signature of the official executing the special
494 improvement refunding bonds and any interest coupons.
495 (c) In addition to these signatures, any special improvement refunding bond may include
496 a certificate signed by the manual or facsimile signature of an authenticating agent, registrar,
497 transfer agent, or the like.
498 (d) At least one signature of an authorized official or other person required or permitted
499 to be placed on the special improvement refunding bonds shall be a manual signature.
500 (e) Special improvement refunding bonds and interest coupons bearing the signatures,
501 manual or facsimile, of officers in office on the date of execution of the special improvement
502 refunding bonds or coupons are valid and binding obligations, even if before the delivery of the
503 special improvement refunding bonds or interest coupons any or all of the persons whose
504 signatures appear on them have ceased to be officers of the municipality.
505 (7) (a) Notwithstanding Subsection (7)(b), in issuing special improvement refunding
506 bonds, the governing body shall make the special improvement refunding bonds and the interest
507 on them payable from and secured by:
508 (i) either the same assessments and interest on assessments from which the prior bonds
509 were payable and were secured or by the reduced assessments and interest on assessments adopted
510 by the governing body pursuant to Subsection (10);
511 (ii) the special improvement guaranty fund if the prior bonds were payable from and
512 secured by this fund; and
513 (iii) improvement revenues if the prior bonds were payable from and secured by
514 improvement revenues.
515 (b) In issuing special improvement refunding bonds, the governing body may make the
516 special improvement refunding bonds and the interest on them payable from and secured by:
517 (i) the special improvement guaranty fund; and
518 (ii) improvement revenues.
519 (c) The governing body shall:
520 (i) adopt an ordinance amending the prior ordinance, as provided in Subsection (10); and
521 (ii) give notice of any reduced payment obligations to the owners of properties assessed
522 in the prior ordinance, as provided in Subsection (11).
523 (d) (i) Neither the amendment of the prior ordinance nor the issuance of special

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- 18 - 524 improvement refunding bonds affects the validity of or the continued enforceability of the original
525 or any other prior assessments or the interest on assessments, except for the amounts of any
526 reductions to the original or prior assessments or interest on assessments specified in the amended
527 ordinance.
528 (ii) Neither this amendment nor the issuance of the special improvement refunding bonds
529 affects the validity of or the enforceability or priority of the lien on the properties upon which the
530 assessments were levied, except for the amounts of any reductions to the original or prior
531 assessments or interest on assessments specified in the amended ordinance.
532 (iii) All these reductions to the original or prior assessments and the interest on
533 assessments shall continue to exist in favor of the special improvement refunding bonds.
534 (iv) All these liens and priorities shall continue to exist against these properties to secure
535 the payment of the reduced payment obligations and the special improvement refunding bonds in
536 the same manner and, except for the amounts of any reductions to the original or prior assessments
537 or interest on assessments, to the same extent as the original and any other prior assessments,
538 interest on assessments, and the prior bonds were secured by the original assessments, interest on
539 assessments, and the original liens and priorities.
540 (e) It is the intent of the Legislature that there be no impairment of the validity of, or,
541 except with respect to the amounts of these reductions to the original or prior assessments or
542 interest on them, of the enforceability or priority of any of these assessments, interest on them, or
543 liens as a result of the amendment of the prior ordinance or the issuance of the special
544 improvement refunding bonds.
545 (8) (a) The lien securing any reduced payment obligations from which the special
546 improvement refunding bonds are payable and secured is subordinate to the lien securing the
547 original or prior assessments, interest on assessments, and the prior bonds until the principal of,
548 interest on, and redemption premium, if any, on the prior bonds are fully paid.
549 (b) Following this payment, this lien shall continue as provided in Section 17A-3-323 , as
550 security for the payment of the reduced payment obligations, the penalties and costs of collection
551 of those obligations, and the payment of the principal of, interest on, and redemption premium, if
552 any, on the special improvement refunding bonds.
553 (9) (a) Unless the principal of, interest on, and redemption premiums, if any, on the prior
554 bonds are paid simultaneously with the issuance of the special improvement refunding bonds, the

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- 19 - 555 municipality shall irrevocably set aside the proceeds of the special improvement refunding bonds
556 in an escrow or other separate account.
557 (b) The governing body shall pledge that account as security for the payment of the
558 principal of, interest on, and redemption premiums, if any, on the special improvement refunding
559 bonds or the prior bonds, or both.
560 (10) The governing body shall ensure that the amending ordinance required by Subsection
561 (7) meets the following requirements:
562 (a) (i) Subject to the provisions of Subsection (5)(a), the amount by which the principal
563 or interest, or both, payable on the special improvement refunding bonds is less than the amount
564 of principal or interest, or both, payable on the prior bonds shall be applied to reduce the
565 assessments levied by the prior ordinance or the interest payable on those assessments, or both, as
566 determined by the governing body.
567 (ii) Any reductions of the assessments levied by the prior ordinance or of interest payable
568 on those assessments, or both, shall be made in such manner that the then unpaid assessments
569 levied against each of the assessed properties and the unpaid interest on these assessments shall
570 receive a proportionate share of the reductions.
571 (iii) These reductions do not apply to assessments and interest on assessments that have
572 been paid.
573 (b) The amending ordinance shall either:
574 (i) state the amounts of the reduced payment obligations for each of the properties assessed
575 in the prior ordinance; or
576 (ii) incorporate by reference a revised assessment list approved by the governing body that
577 contains these reduced payment obligations.
578 (c) The amending ordinance need not describe each block, lot, part of block or lot, tract,
579 or parcel of property assessed.
580 (d) The governing body shall comply with the requirements of Subsection 17A-3-318 (1)
581 regarding publication and effective date with respect to the amending ordinance.
582 (e) (i) The amending ordinance shall state the effective date or dates of any reductions in
583 the assessments and the interest on assessments levied in the prior ordinance.
584 (ii) The governing body may not set an effective date or dates that is before the date when
585 all of the principal of, interest on, and any redemption premiums on the prior bonds and any

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- 20 - 586 advances of funds made under Subsection (5)(a) are fully paid.
587 (11) (a) The notice to owners of assessed properties of reductions in their assessments and
588 interest payments required by Subsection (7)(c)(ii) shall:
589 (i) identify the property subject to the assessment; and
590 (ii) state the amount of the reduced payment obligations that will be payable from and after
591 the applicable date stated in the amending ordinance.
592 (b) The notice may contain any other information that the governing body considers
593 appropriate.
594 (12) (a) The governing body shall mail the notice referred to in Subsection (7)(c)(ii),
595 postage prepaid, not less than 21 days before the date the first payment of the reduced assessments
596 becomes due addressed to "owner" at the street number of each piece of improved, assessed
597 property.
598 (b) If a street number has not been assigned to a piece of improved, assessed property, the
599 notice shall be addressed to "owner" and mailed to the post office box, rural route number, or any
600 other mailing address of the improved property.
601 (c) The governing body may include the notice with or in any other notices regarding the
602 payment of assessments and interest on assessments sent to the property owners in the district
603 within the time and addressed as stated in this Subsection (12).
604 (d) Neither the failure to give notice nor any defect in its content or the manner or time in
605 which it is given affects the validity or enforceability of the amending ordinance or the special
606 improvement refunding bonds or the validity, enforceability, or priority of the reduced payment
607 obligations.
608 (e) Whether or not this notice is given, no other notice is required to be given to the owners
609 of the assessed properties in connection with the issuance of the special improvement refunding
610 bonds.
611 (13) To the extent it is not inconsistent with this part, Title 11, Chapter 27, Utah
612 Refunding Bond Act, applies to the issuance of special improvement refunding bonds.
613 (14) The provisions of this part relating to special improvement refunding bonds apply to
614 all special improvement bonds issued and outstanding or which may be issued and outstanding in
615 the future.
616 (15) This part applies to all special improvement refunding bonds issued under this part

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618 issued under any other law, including, without limitation, any law that has been repealed.

Legislative Review Note
as of 1-11-02 3:03 PM

A limited legal review of this legislation raises no obvious constitutional or statutory concerns.

Office of Legislative Research and General Counsel