2006 Utah Code - 53A-20a-104 — Bonds do not create state indebtedness -- Special obligations -- Discharge of bonded indebtedness -- Agreements and covenants by the board regarding bonds -- Enforcement by court action.

     53A-20a-104.   Bonds do not create state indebtedness -- Special obligations -- Discharge of bonded indebtedness -- Agreements and covenants by the board regarding bonds -- Enforcement by court action.
     (1) (a) The bonds issued under this chapter are not an indebtedness of the state, of the institution for which they are issued, or of the board.
     (b) They are special obligations payable solely from the revenues derived from the operation of the building and student building fees, land grant interest, net profits from proprietary activities, and any other legally available sources pledged as provided in Sections 53A-20a-103 and 53A-20a-113.
     (2) The board shall pledge all or any part of the revenues to the payment of principal of and interest on the bonds.
     (3) In order to secure the prompt payment of principal and interest and the proper application of the revenues pledged, the board may, by appropriate provisions in the resolution authorizing the bonds, do the following:
     (a) covenant as to the use and disposition of the proceeds of the sale of the bonds;
     (b) covenant as to the operation of the project and the collection and disposition of the revenues derived from the operation;
     (c) collect student building fees, as appropriate, from students and pledge the fees to the payment of building bonds;
     (d) covenant as to the rights, liabilities, powers, and duties arising from the breach of any covenant or agreement into which it may enter in authorizing and issuing the bonds;
     (e) covenant and agree to carry insurance on the project, and its use and occupancy, and provide that the cost of any insurance is part of the expense of operating the project;
     (f) vest in a trustee:
     (i) the right to receive all or any part of the income and revenues pledged and assigned to or for the benefit of the holder or holders of the bonds issued under this chapter, and to hold, apply, and dispose of the income and revenue; and
     (ii) the right to:
     (A) enforce any covenant made to secure the bonds;
     (B) execute and deliver a trust agreement which sets forth the powers and duties and the remedies available to the trustee and limits the trustee's liabilities; and
     (C) prescribe the terms and conditions upon which the trustee or the holders of the bonds in any specified amount or percentage may exercise such rights and enforce any or all covenants and resort to any appropriate remedies;
     (g) (i) fix rents, charges, and fees, including student building fees, to be imposed in connection with and for the use of the project, which are:
     (A) income and revenues derived from the operation of the project; and
     (B) expressly required to be fully sufficient either by themselves or with land grant interest and net profits from proprietary activities, or from other legally available sources to assure the prompt payment of principal of and interest on the bonds as each becomes due; and
     (ii) make and enforce rules and regulations with reference to the use of the project and with reference to requiring any class or classes of students to use the project as desirable for the welfare of the institution and its students or for the accomplishment of the purposes of this chapter;
     (h) covenant to maintain a maximum percentage of occupancy of the project;

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     (i) covenant against the issuance of any other obligations payable from the revenues to be derived from the project, unless subordinated;
     (j) make provision for refunding;
     (k) covenant as to the use and disposition of legally available sources of revenues, and pledge those sources of revenues to the payment of bonds issued under this chapter;
     (l) make other covenants considered necessary or advisable to effect the purposes of this chapter; and
     (m) delegate to the chairman or other board member the authority:
     (i) to approve any changes with respect to interest rate, price, amount, redemption features, and other terms of the bonds as are within reasonable parameters set forth in the resolution; and
     (ii) to approve and execute all documents relating to the issuance of the bonds.
     (4) (a) The agreements and covenants entered into by the board under this section are binding in all respects upon the board and its officials, agents, and employees, and upon its successors.
     (b) They are enforceable by appropriate action or suit at law or in equity brought by any holder or holders of bonds issued under this chapter.

Enacted by Chapter 273, 1993 General Session