11-14-308 - Special service district bonds secured by federal mineral lease payments -- Use of bond proceeds -- Bond resolution -- Nonimpairment of appropriation formula -- Issuance of bonds.
11-14-308. Special service district bonds secured by federal mineral lease payments-- Use of bond proceeds -- Bond resolution -- Nonimpairment of appropriation formula --Issuance of bonds.
(1) Special service districts may:
(a) issue bonds payable, in whole or in part, from federal mineral lease payments whichare to be deposited into the Mineral Lease Account under Section 59-21-1 and distributed tospecial service districts under Subsection 59-21-2(2)(h); or
(b) pledge all or any part of the mineral lease payments referred to in Subsection (1)(a) asan additional source of payment for their general obligation bonds.
(2) The proceeds of these bonds may be used:
(a) to construct, repair, and maintain streets and roads;
(b) to fund any reserves and costs incidental to the issuance of the bonds and pay anyassociated administrative costs; and
(c) for capital projects of the special service district.
(3) (a) The special service district board shall enact a resolution authorizing the issuanceof bonds which, until the bonds have been paid in full:
(i) shall be irrevocable; and
(ii) may not be amended in any manner that would:
(A) impair the rights of the bond holders; or
(B) jeopardize the timely payment of principal or interest when due.
(b) Notwithstanding any other provision of this chapter, the resolution may containcovenants with the bond holder regarding:
(i) mineral lease payments, or their disposition;
(ii) the issuance of future bonds; or
(iii) other pertinent matters considered necessary by the governing body to:
(A) assure the marketability of the bonds; or
(B) insure the enforcement, collection, and proper application of mineral lease payments.
(4) (a) Except as provided in Subsection (4)(b), the state may not alter, impair, or limitthe statutory appropriation formula provided in Subsection 59-21-2(2)(h), in a manner thatreduces the amounts to be distributed to the special service district until the bonds and theinterest on the bonds are fully met and discharged. Each special service district may include thispledge and undertaking of the state in these bonds.
(b) Nothing in this section:
(i) may preclude the alteration, impairment, or limitation of these bonds if adequateprovision is made by law for the protection of the bond holders; or
(ii) shall be construed:
(A) as a pledge guaranteeing the actual dollar amount ultimately received by individualspecial service districts;
(B) to require the Department of Transportation to allocate the mineral lease payments ina manner contrary to the general allocation method described in Subsection 59-21-2(2)(h); or
(C) to limit the Department of Transportation in making rules or procedures allocatingmineral lease payments pursuant to Subsection 59-21-2(2)(h).
(5) (a) The average annual installments of principal and interest on bonds to whichmineral lease payments have been pledged as the sole source of payment may not at any one timeexceed:
(i) 80% of the total mineral lease payments received by the issuing entity during thefiscal year of the issuing entity immediately preceding the fiscal year in which the resolutionauthorizing the issuance of bonds is adopted; or
(ii) if the bonds are issued during the first fiscal year the issuing entity is eligible toreceive funds, 60% of the amount estimated by the Department of Transportation to beappropriated to the issuing entity in that fiscal year.
(b) The Department of Transportation is not liable for any loss or damage resulting fromreliance on the estimates.
(6) The final maturity date of the bonds may not exceed 15 years from the date of theirissuance.
(7) Bonds may not be issued under this section after December 31, 2010.
(8) Bonds which are payable solely from a special fund into which mineral leasepayments are deposited constitute a borrowing based solely upon the credit of the mineral leasepayments received or to be received by the special service district and do not constitute anindebtedness or pledge of the general credit of the special service district or the state.
Amended by Chapter 378, 2010 General Session