2006 Utah Code - 17A-3-329 — Special improvement refunding bonds.

     17A-3-329.   Special improvement refunding bonds.
     (1) (a) The governing body may issue special improvement refunding bonds to refund special improvement bonds issued under authority of this part.
     (b) The governing body may adopt a resolution refunding the special improvement bonds in whole or in part, at or in advance of their maturity, whether at stated maturity or upon redemption or declaration of maturity.
     (2) In issuing the special improvement refunding bonds, the governing body shall comply with:
     (a) the requirements of this part;
     (b) the provisions of Title 11, Chapter 27, Utah Refunding Bond Act, as provided in Subsection (13); and
     (c) the requirements of this section.
     (3) Special improvement refunding bonds shall:
     (a) be payable solely from the sources described in Subsection (7)(a);
     (b) mature not later than the date of final maturity of the prior bonds;
     (c) not mature or bear interest at any time in amounts that cannot be paid when due from the payments of the assessments, interest on assessments, and improvement revenues, or the reduced payment obligations, as applicable, assuming that payments of these assessments, improvement revenues, reduced payment obligations, and interest are paid when due, together with the amounts of any prior payments or prepayments of these assessments, improvement revenues, reduced payment obligations, and interest previously made and that remain available for payment of the special improvement refunding bonds; and
     (d) bear interest as determined by the governing body in accordance with Subsections 17A-3-328(2) and (5).
     (4) Special improvement refunding bonds may:
     (a) be issued in bearer form, with or without interest coupons attached, or in registered form in accordance with Title 15, Chapter 7, Registered Public Obligations Act, as determined by the governing body;
     (b) as determined by the governing body:
     (i) be in a form and contain details consistent with this part;
     (ii) be payable at a place or places;
     (iii) be delivered in exchange for the prior bonds; or
     (iv) be sold in a manner, at terms, and with details consistent with this part, and at a price or prices above, at, or below par;
     (c) be callable for redemption prior to maturity upon terms, conditions, and notice, and premium, if any, to be paid, as the governing body determines, but no special improvement refunding bonds are callable for redemption unless the terms and conditions of redemption are stated on their face; and
     (d) be issued for the purpose of refunding one or more issues of prior bonds of a municipality and, if issued to refund two or more issues of prior bonds, be issued in a single series to refund all of the issues of prior bonds to be refunded, or in two or more series to refund one or more of these issues of prior bonds.
     (5) The governing body may provide for the payment of incidental refunding costs of the special improvement refunding bonds as follows:
     (a) by advancing funds from the general fund or other funds of the municipality, if the

governing body:
     (i) finds and determines that this advance of municipal funds is in the best interest of the municipality and its citizens, including, without limitation, the owners of property within the district; and
     (ii) provides that the assessments, the interest on assessments, and the improvement revenues from which the prior bonds are payable may not be reduced during whatever period is necessary to provide funds from the payment of these assessments, interest on assessments, and improvement revenues with which to reimburse the municipality for all funds advanced by it for the payment of incidental refunding costs, together with interest on these funds at a rate or rates equal to the interest rate or rates payable on these assessments;
     (b) from any premium received from the sale of the special improvement refunding bonds;
     (c) from any earnings on the investment of the proceeds of the special improvement refunding bonds pending their use to redeem the prior bonds;
     (d) from any other sources legally available to the municipality for this purpose; or
     (e) from any combination of Subsections (5)(a) through (d).
     (6) (a) The governing body of the municipality shall designate an official of the municipality to execute a manual or facsimile signature on special improvement refunding bonds and any interest coupons attached to them.
     (b) The governing body of the municipality shall designate another municipal official to attest, by manual or facsimile signature, to the signature of the official executing the special improvement refunding bonds and any interest coupons.
     (c) In addition to these signatures, any special improvement refunding bond may include a certificate signed by the manual or facsimile signature of an authenticating agent, registrar, transfer agent, or the like.
     (d) At least one signature of an authorized official or other person required or permitted to be placed on the special improvement refunding bonds shall be a manual signature.
     (e) Special improvement refunding bonds and interest coupons bearing the signatures, manual or facsimile, of officers in office on the date of execution of the special improvement refunding bonds or coupons are valid and binding obligations, even if before the delivery of the special improvement refunding bonds or interest coupons any or all of the persons whose signatures appear on them have ceased to be officers of the municipality.
     (7) (a) Notwithstanding Subsection (7)(b), in issuing special improvement refunding bonds, the governing body shall make the special improvement refunding bonds and the interest on them payable from and secured by:
     (i) either the same assessments and interest on assessments from which the prior bonds were payable and were secured or by the reduced assessments and interest on assessments adopted by the governing body pursuant to Subsection (10);
     (ii) the special improvement guaranty fund if the prior bonds were payable from and secured by this fund; and
     (iii) improvement revenues if the prior bonds were payable from and secured by improvement revenues.
     (b) In issuing special improvement refunding bonds, the governing body may make the special improvement refunding bonds and the interest on them payable from and secured by:
     (i) the special improvement guaranty fund; and

---

     (ii) improvement revenues.
     (c) The governing body shall:
     (i) adopt an ordinance amending the prior ordinance, as provided in Subsection (10); and
     (ii) give notice of any reduced payment obligations to the owners of properties assessed in the prior ordinance, as provided in Subsection (11).
     (d) (i) Neither the amendment of the prior ordinance nor the issuance of special improvement refunding bonds affects the validity of or the continued enforceability of the original or any other prior assessments or the interest on assessments, except for the amounts of any reductions to the original or prior assessments or interest on assessments specified in the amended ordinance.
     (ii) Neither this amendment nor the issuance of the special improvement refunding bonds affects the validity of or the enforceability or priority of the lien on the properties upon which the assessments were levied, except for the amounts of any reductions to the original or prior assessments or interest on assessments specified in the amended ordinance.
     (iii) All these reductions to the original or prior assessments and the interest on assessments shall continue to exist in favor of the special improvement refunding bonds.
     (iv) All these liens and priorities shall continue to exist against these properties to secure the payment of the reduced payment obligations and the special improvement refunding bonds in the same manner and, except for the amounts of any reductions to the original or prior assessments or interest on assessments, to the same extent as the original and any other prior assessments, interest on assessments, and the prior bonds were secured by the original assessments, interest on assessments, and the original liens and priorities.
     (e) It is the intent of the Legislature that there be no impairment of the validity of, or, except with respect to the amounts of these reductions to the original or prior assessments or interest on them, of the enforceability or priority of any of these assessments, interest on them, or liens as a result of the amendment of the prior ordinance or the issuance of the special improvement refunding bonds.
     (8) (a) The lien securing any reduced payment obligations from which the special improvement refunding bonds are payable and secured is subordinate to the lien securing the original or prior assessments, interest on assessments, and the prior bonds until the principal of, interest on, and redemption premium, if any, on the prior bonds are fully paid.
     (b) Following this payment, this lien shall continue as provided in Section 17A-3-323, as security for the payment of the reduced payment obligations, the penalties and costs of collection of those obligations, and the payment of the principal of, interest on, and redemption premium, if any, on the special improvement refunding bonds.
     (9) (a) Unless the principal of, interest on, and redemption premiums, if any, on the prior bonds are paid simultaneously with the issuance of the special improvement refunding bonds, the municipality shall irrevocably set aside the proceeds of the special improvement refunding bonds in an escrow or other separate account.
     (b) The governing body shall pledge that account as security for the payment of the principal of, interest on, and redemption premiums, if any, on the special improvement refunding bonds or the prior bonds, or both.
     (10) The governing body shall ensure that the amending ordinance required by Subsection (7) meets the following requirements:
     (a) (i) Subject to the provisions of Subsection (5)(a), the amount by which the principal or

interest, or both, payable on the special improvement refunding bonds is less than the amount of principal or interest, or both, payable on the prior bonds shall be applied to reduce the assessments levied by the prior ordinance or the interest payable on those assessments, or both, as determined by the governing body.
     (ii) Any reductions of the assessments levied by the prior ordinance or of interest payable on those assessments, or both, shall be made in such manner that the then unpaid assessments levied against each of the assessed properties and the unpaid interest on these assessments shall receive a proportionate share of the reductions.
     (iii) These reductions do not apply to assessments and interest on assessments that have been paid.
     (b) The amending ordinance shall either:
     (i) state the amounts of the reduced payment obligations for each of the properties assessed in the prior ordinance; or
     (ii) incorporate by reference a revised assessment list approved by the governing body that contains these reduced payment obligations.
     (c) The amending ordinance need not describe each block, lot, part of block or lot, tract, or parcel of property assessed.
     (d) The governing body shall comply with the requirements of Subsection 17A-3-318(1) regarding publication and effective date with respect to the amending ordinance.
     (e) (i) The amending ordinance shall state the effective date or dates of any reductions in the assessments and the interest on assessments levied in the prior ordinance.
     (ii) The governing body may not set an effective date or dates that is before the date when all of the principal of, interest on, and any redemption premiums on the prior bonds and any advances of funds made under Subsection (5)(a) are fully paid.
     (11) (a) The notice to owners of assessed properties of reductions in their assessments and interest payments required by Subsection (7)(c)(ii) shall:
     (i) identify the property subject to the assessment; and
     (ii) state the amount of the reduced payment obligations that will be payable from and after the applicable date stated in the amending ordinance.
     (b) The notice may contain any other information that the governing body considers appropriate.
     (12) (a) The governing body shall mail the notice referred to in Subsection (7)(c)(ii), postage prepaid, not less than 21 days before the date the first payment of the reduced assessments becomes due addressed to "owner" at the street number of each piece of improved, assessed property.
     (b) If a street number has not been assigned to a piece of improved, assessed property, the notice shall be addressed to "owner" and mailed to the post office box, rural route number, or any other mailing address of the improved property.
     (c) The governing body may include the notice with or in any other notices regarding the payment of assessments and interest on assessments sent to the property owners in the district within the time and addressed as stated in this Subsection (12).
     (d) Neither the failure to give notice nor any defect in its content or the manner or time in which it is given affects the validity or enforceability of the amending ordinance or the special improvement refunding bonds or the validity, enforceability, or priority of the reduced payment obligations.

---

     (e) Whether or not this notice is given, no other notice is required to be given to the owners of the assessed properties in connection with the issuance of the special improvement refunding bonds.
     (13) To the extent it is not inconsistent with this part, Title 11, Chapter 27, Utah Refunding Bond Act, applies to the issuance of special improvement refunding bonds.
     (14) The provisions of this part relating to special improvement refunding bonds apply to all special improvement bonds issued and outstanding or which may be issued and outstanding in the future.
     (15) This part applies to all special improvement refunding bonds issued under this part even though the prior bonds that are refunded by those special improvement refunding bonds were issued under any other law, including, without limitation, any law that has been repealed.

Amended by Chapter 92, 2002 General Session