S.B. 104 Enrolled

SALE OF MUNICIPAL POWER SYSTEMS
2002 GENERAL SESSION
STATE OF UTAH
Sponsor: John W. Hickman
This act modifies the Utah Municipal Code to clarify provisions relating to a municipality's
sale or lease of its electric power system. This act authorizes the municipal legislative body
to accept or reject a bid and to add or subtract from the appraised value of the power
system. The act clarifies the authority of a municipal legislative body in the process of selling
or leasing a municipal power system and modifies that process. The act also makes technical
changes.
This act affects sections of Utah Code Annotated 1953 as follows:
AMENDS:
10-7-15, Utah Code Annotated 1953
10-7-16, Utah Code Annotated 1953
10-7-17, Utah Code Annotated 1953
10-7-18, Utah Code Annotated 1953
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 10-7-15 is amended to read:
10-7-15. Sale or lease of electrical generation and distribution system -- Appraisal
and vote required -- Manner of conducting the election.
[Whenever in the judgment of the board of commissioners or city council of any city, or
the board of trustees of any town, it shall be deemed advisable to sell or lease the works or plant,
constructed, purchased or used by such city or town]
(1) (a) Before selling or leasing in their entirety the works and plant constructed,
purchased, or used by the municipality for the purpose of generating or distributing electrical
energy for light, heat [or power purposes, such board of commissioners, city council or board of
trustees, as the case may be, shall cause an appraisement], or power purposes, the municipal
legislative body shall:
(i) cause an appraisal of the property proposed to be sold or leased to be made [by] under

the supervision of three resident taxpayers of [such city or town] the municipality, to be appointed
by the [commissioners, city council or board of trustees, and shall] municipal legislative body; and
(ii) provide for submitting to the registered voters of the municipality the question of the sale
or lease of [such property to the qualified electors of such city or town as shall have paid a property
tax in the year preceding such election] the property, at the next general election or at a special
election called for that purpose. [Such election]
(b) The value of the property determined in an appraisal under Subsection (1)(a)(i) shall
include all items that the municipal legislative body determines to add value to or subtract value
from the property.
(2) (a) Subject to Subsection (2)(b), each election under Subsection (1)(a)(ii) shall be called
and conducted in the same manner as provided by statute for the issue of bonds in Section 10-7-8 ,
the necessary changes in the form of the ballot being made.
(b) Each notice of election required under Section 11-14-3 for an election held under
Subsection (1)(a)(ii) shall include:
(i) a summary of the appraisal made under Subsection (1)(a)(i), including the amount of the
appraisal; and
(ii) the name of each bidder who submitted a bid that was opened and considered under
Section 10-7-17 and the amount of each bid.
(3) In the process of selling or leasing in their entirety the municipality's electrical works and
plant, a municipal legislative body may take whatever action it considers appropriate and in the
sequence it considers appropriate, subject to the requirements of this section and Sections 10-7-16
and 10-7-17 .
Section 2. Section 10-7-16 is amended to read:
10-7-16. Call for bids -- Notice -- Contents.
[In case a majority of the qualified electors of any city or town voting thereon at any general
election or special election called for that purpose shall vote in favor of selling or leasing any]
(1) (a) Before holding an election under Subsection 10-7-15 (1)(a)(ii), the municipal
legislative body shall open to bid the sale or lease of the property mentioned in Section 10-7-15 [, the

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board of commissioners, city council or board of trustees, as the case may be,].
(b) The municipal legislative body shall cause notice of the bid process to be given by
publication [thereof] for at least [twenty days] three consecutive weeks in a newspaper published or
having general circulation in the city or town, giving a general description of the property to be sold
or leased, and specifying the time when sealed bids for the [said] property, or for a lease [thereon]
on the property, will be received, and the time when and the place where the [same] bids will be
opened.
(2) (a) As used in this section and in Section 10-7-17 , "responsible bidder" means an entity
with a proven history of successful operation of an electrical generation and distribution system, or
an equivalent proven history.
(b) Subject to Subsection (2)(c), a municipal legislative body may receive or refuse to
receive any bid submitted for the sale or lease of the electrical works and plant.
(c) A municipal legislative body may not receive a bid unless the municipal legislative body
determines that the bid is submitted by a responsible bidder.
Section 3. Section 10-7-17 is amended to read:
10-7-17. Opening of bids -- Amount to equal or exceed appraised value and amount
of outstanding indebtedness.
At the time and place mentioned in [such notice] the notice under Section 10-7-16 , all bids
received by the municipal legislative body for the property sought to be sold or leased shall be
opened and considered, and the [commissioners, city council or trustees] municipal legislative body
shall, subject to approval of voters at an election held under Section 10-7-15 , accept the bid of the
highest responsible bidder[; provided, that such bid, if for the purchase of the works or plant], as
defined in Section 10-7-16, if the bid price:
(1) (a) is for an amount equal to or exceeding the appraised value [thereof, and in the
judgment of the commissioners, city council or board of trustees is an adequate price for the said
property; and provided further, that no offer to purchase the works or plant shall be accepted which
does not amount to the total] of the property to be sold, as determined under Subsection 10-7-15 (1);
or

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(b) in the judgment of the municipal legislative body, is an adequate price for the property;
and
(2) equals or exceeds the total principal and interest on any outstanding bonds [sold] and
other indebtedness issued for the purpose of constructing the [same, together with accumulated
interest thereon] works or plant.
Section 4. Section 10-7-18 is amended to read:
10-7-18. Disposition of money received.
(1) All [moneys] money received from the sale of property [as in this article provided] under
Sections 10-7-15 through 10-7-17 shall be kept in a separate fund, and shall not be expended, or
mixed with other funds of [such] the city or town, until all bonds [sold] and other indebtedness
issued for the purchase or construction of [such] the plant or works, together with accumulated
interest thereon, [shall] have first been paid[; provided, that where].
(2) If the property [so] sold [shall bring] brings an amount in excess of the outstanding bonds
and other indebtedness issued for the purchase or construction of the property [so] sold [such], the
excess shall be deposited in a bank in this state under direction of the [board of commissioners, city
council or board of trustees at interest] municipal legislative body, and may not thereafter be
expended except for some municipal purpose by authority given by the [qualified electors] registered
voters of [such] the city or town at a general or special election called and conducted in the manner
set forth in Sections 10-7-7 and 10-7-8 .

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