2006 Utah Code - 17A-3-905 — Leasing contracts authorized -- Required provisions -- Term of contract.

     17A-3-905.   Leasing contracts authorized -- Required provisions -- Term of contract.
     (1) Subject to the provisions of Section 17A-3-904 and of this section, a public body and the building authority created by the public body may enter into leasing contracts with respect to projects which the authority has acquired, improved, or extended or will acquire, improve, or extend on behalf of the public body.
     (2) Leasing contracts shall provide for the payment by the lessee of rentals sufficient:
     (a) to pay principal of and interest on all bonds outstanding the proceeds of which were used to acquire, improve, or extend the project, and all fees and expenses of trustees and paying agents for these bonds;
     (b) to pay all costs of maintaining and operating the project; and
     (c) to accumulate such reasonable reserves as may be deemed necessary by the building authority.
     (3) All leasing contracts shall provide that the lessee, if not in default under the terms of the leasing contract, may:
     (a) renew the lease for a fixed term beyond the initial term on giving specified notice prior to the expiration of the initial term; and
     (b) purchase the leased property subject to the terms of the leasing contract on a date or dates fixed in the leasing contract, but the purchase price for the leased property shall not exceed that portion of the capital actually invested in the project by the building authority allowable to the leased property.
     (4) Each leasing contract shall provide that a lessee is not under any obligation to purchase the leased property or under any obligation in respect to any creditors, shareholders, or security holders of the building authority.
     (5) All leasing contracts shall provide that:
     (a) upon payment in full of all outstanding bonds issued to acquire, improve, extend a project, title to the project shall vest in the lessee; and
     (b) upon dissolution of the building authority, any assets and net earnings of the building authority remaining shall be paid to the lessee in accordance with Section 17A-3-912.
     (6) Leasing contracts, including any renewals of them pursuant to Subsection (3)(a) shall not have a term which extends beyond the estimated useful life of the project as certified in Section 17A-3-904, but the term shall be limited to not more than 40 years.

Renumbered and Amended by Chapter 186, 1990 General Session