11-17-3 - Powers of municipalities, counties, and state universities.
11-17-3. Powers of municipalities, counties, and state universities.
(1) Each municipality, county, and state university may:
(a) finance or acquire, whether by construction, purchase, devise, gift, exchange, or lease,or any one or more of those methods, and construct, reconstruct, improve, maintain, equip, andfurnish or fund one or more projects, which shall be located within this state, and which shall belocated within, or partially within, the municipality or county or within the county within which astate university is located, unless an agreement under the Interlocal Cooperation Act has beenentered into as authorized by Subsection (5), except that if a governing body finds, by resolution,that the effects of international trade practices have been or will be adverse to Utahmanufacturers of industrial products and, therefore, it is desirable to finance a project in order tomaintain or enlarge domestic or foreign markets for Utah industrial products, a project mayconsist of the financing on behalf of a user of the costs of acquiring industrial productsmanufactured in, and which are to be exported from, the state;
(b) finance for, sell, lease, contract the management of, or otherwise dispose of to, anyperson, firm, partnership, or corporation, either public or private, including without limitationany person, firm, partnership, or corporation engaged in business for a profit, any or all of itsprojects upon the terms and conditions as the governing body considers advisable and which donot conflict with this chapter;
(c) issue revenue bonds for the purpose of defraying the cost of financing, acquiring,constructing, reconstructing, improving, maintaining, equipping, furnishing, or funding anyproject and secure the payment of the bonds as provided in this chapter, which revenue bondsmay be issued in one or more series or issues where considered advisable, and each series orissue may contain different maturity dates, interest rates, priorities on securities available forguaranteeing payment of them, and other differing terms and conditions considered necessaryand not in conflict with this chapter;
(d) (i) grant options to renew any lease with respect to any project and to buy any projectat a price the governing body considers desirable; and
(ii) sell and convey any real or personal property acquired under Subsection (1)(a) atpublic or private sale, and make an order respecting the sale considered conducive to the bestinterests of the municipality, county, or state university, the sale or conveyance to be subject tothe terms of any lease but to be free and clear of any other encumbrance;
(e) establish, acquire, develop, maintain, and operate industrial parks; and
(f) offer to the holders of its bonds issued pursuant to this chapter the right, where itsgoverning body considers it appropriate, to convert the bonds or some portion of the bondobligation into an equity position in some or all of the assets developed with the proceeds of thebond offering.
(2) An economic development or new venture investment fund shall be considered to belocated in the municipality or county where its headquarters is located or where any office of it islocated, as long as it is headquartered within the state. It need not make all of its investmentswithin the state or such county or municipality, so long as it locates within the state or suchcounty or municipality its headquarters where its actual investment decisions and managementfunctions occur and agrees to, and does, limit the aggregate amount of its investments incompanies located outside the state to an amount which in the aggregate does not exceed theaggregate amount of investments made by institutions and funds located outside the state incompanies headquartered in Utah which the locally managed fund has sponsored or in which it
has invested and which it has brought to the attention of investors outside the state. For purposesof enabling an offering of bonds to fund such a fund, a certification of an executive managerialofficer of the manager of said fund of the intention to comply with this provision may be reliedupon. Each fund shall at least annually certify to the governmental offeror of such bonds itscompliance with this provision.
(3) Before any municipality, county, or state university issues revenue bonds under thischapter for the purpose of defraying the cost of acquiring, constructing, reconstructing,improving, maintaining, equipping, or furnishing any industrial park project, the governing bodyof the state university, county, or municipality shall adopt and establish a plan of developmentfor the tracts of land to constitute the industrial park and shall, by resolution, find that the projectfor the establishment of the industrial park is well conceived and has a reasonable prospect ofsuccess, that the project will tend to provide proper economic development of the municipality orcounty and will encourage industry to locate within or near the municipality or county or, in thecase of state universities, will further, through industrial research and development, theinstructional progress of the state university. There may be included as a part of any plan ofdevelopment for any industrial park zoning regulations, restrictions on usage of sites within theboundaries of the industrial park, minimum size of sites, parking and loading regulations, andmethods for the providing and furnishing of police and fire protection and for the furnishing ofother municipal or county services which are considered necessary in order to provide for themaintenance of the public health and safety. If any water or sewerage facilities are to be acquiredas part of the development of the land for an industrial park under this chapter, water andsewerage facilities may be acquired as part of the issue of bonds issued under this chapter,through the issuance of bonds payable from water and sewer charges in the manner as is now oras may hereafter be provided by law, in combination with an issue of refunding bonds, incombination with an issue of bonds upon the consent of the holders of outstanding bonds issuedfor the same purpose, in combination with bonds issued for the purposes of financing water andsewer facilities which will not be a part of an industrial park, or in any combination of theforegoing. Any municipality, county, or state university establishing an industrial park may leaseany land acquired and developed as part of an industrial park to one or more lessees. The lesseemay sublease all or a portion of the land so leased from the municipality or county. Municipalities, counties, and state universities may sell or lease land in connection with theestablishment, acquisition, development, maintenance, and operation of an industrial parkproject. Any such lease or sale of land shall be undertaken only after the adoption by thegoverning body of a resolution authorizing the lease or sale of the land for industrial parkpurposes.
(4) (a) No municipality, county, or state university may operate any project referred to inthis section, as a business or in any other manner except as the lessor or administrator of it, normay it acquire any such project, or any part of it, by condemnation. This prohibition does notapply to projects involving research conducted, administered, or managed by a state university.
(b) No municipality, county, or state university may, under this chapter, acquire or leaseprojects, or issue revenue bonds for the purpose of defraying the cost of any project or part of it,used for the generation, transmission, or distribution of electric energy beyond the project site, orthe production, transmission, or distribution of natural gas, except for any project defined inSubsection 11-17-2(8)(b) or (d).
(5) Each municipality, county, and state university may enter, either before or after the
bonds have been issued, into interlocal agreements under Title 11, Chapter 13, InterlocalCooperation Act, with one or more municipalities, counties, state universities, or special servicedistricts created pursuant to Title 17D, Chapter 1, Special Service District Act, in order toaccomplish economies of scale or other cost savings and any other additional purposes to bespecified in the interlocal agreement, for the issuance of bonds under this chapter on behalf of allof the signatories to the interlocal agreement by one of the municipalities, counties, or stateuniversities which is a signatory to the interlocal agreement for the financing or acquisition ofprojects qualifying as a project under Subsection 11-17-2(8). For all purposes of Section11-13-207 the signatory to the interlocal agreement designated as the issuer of the bondsconstitutes the administrator of the interlocal agreement.
(6) Subsection (4) to the contrary notwithstanding, the governing body of any stateuniversity owning or desiring to own facilities or administer projects described in Subsection11-17-2(8) may:
(a) become a signatory to the interlocal agreement provided for in Subsection (5);
(b) enter into a separate security agreement with the issuer of the bonds, as provided inSection 11-17-5 for the financing or acquisition of a project under Subsection 11-17-2(8) to beowned by the state university;
(c) enter into agreements to secure the obligations of the state university under a securityagreement entered into under Subsection (6)(b), or to provide liquidity for such obligationsincluding, without limitation, letter of credit agreements with banking institutions for letters ofcredit or for standby letters of credit, reimbursement agreements with financial institutions, lineof credit agreements, standby bond purchase agreements, and to provide for payment of fees,charges, and other amounts coming due under the agreements entered into under the authoritycontained in this Subsection (6)(c);
(d) provide in security agreements entered into under Subsection (6)(b) and inagreements entered into under Subsection (6)(c) that the obligations of the state university underan agreement shall be special obligations payable solely from the revenues derived from theoperation or management of the project, owned by the state university and from net profits fromproprietary activities and any other revenues pledged other than appropriations by the UtahLegislature, and the governing body of the state university shall pledge all or any part of suchrevenues to the payment of its obligations under an agreement; and
(e) in order to secure the prompt payment of the obligations of the state university undera security agreement entered into under Subsection (6)(b) or an agreement entered into underSubsection (6)(c) and the proper application of the revenues pledged to them, covenant andprovide appropriate provisions in an agreement to the extent permitted and provided for underSection 53B-21-102.
(7) Subsection (4) to the contrary notwithstanding, the governing body of anymunicipality, county, or special service district owning, desiring to own, or administeringprojects or facilities described in Subsection 11-17-2(8) may:
(a) become a signatory to the interlocal agreement provided for in Subsection (5);
(b) enter into a separate security agreement with the issuer of the bonds, as provided inSection 11-17-5, for the financing or acquisition of a project under Subsection 11-17-2(8) to beowned by the municipality, county, or special service district, as the case may be, except that nomunicipality, county, or special service district may mortgage the facilities so financed oracquired;
(c) enter into agreements to secure the obligations of the municipality, county, or specialservice district, as the case may be, under a security agreement entered into under Subsection(7)(b), or to provide liquidity for such obligations including, without limitation, letter of creditagreements with banking institutions for letters of credit or for standby letters of credit,reimbursement agreements with financial institutions, line of credit agreements, standby bondpurchase agreements, and to provide for payment of fees, charges, and other amounts coming dueunder the agreements entered into under the authority contained in this Subsection (7)(c);
(d) provide in security agreements entered into under Subsection (7)(b) and inagreements entered into under Subsection (7)(c) that the obligations of the municipality, county,or special service district, as the case may be, under an agreement shall be special obligationspayable solely from the revenues derived from the operation or management of the project,owned by the municipality, county, or special service district, as the case may be, and thegoverning body of the municipality, county, or special service district, as the case may be, shallpledge all or any part of such revenues to the payment of its obligations under an agreement; and
(e) in order to secure the prompt payment of obligations under a security agreemententered into under Subsection (7)(b) or an agreement entered into under Subsection (7)(c) and theproper application of the revenues pledged to them, covenant and provide appropriate provisionsin an agreement to the extent permitted and provided for with respect to revenue obligationsunder Section 11-14-306.
(8) In connection with the issuance of bonds under this chapter, a municipality, county,or state university:
(a) may provide for the repurchase of bonds tendered by their owners and may enter intoan agreement to provide liquidity for such repurchases, including a letter of credit agreement, lineof credit agreement, standby bond purchase agreement, or other type of liquidity agreement;
(b) may enter into remarketing, indexing, tender agent, or other agreements incident tothe financing of the project or the performance of the issuer's obligations relative to the bonds;and
(c) may provide for payment of fees, charges, and other amounts coming due under theagreements entered into pursuant to authority contained in Subsection (6).
Amended by Chapter 360, 2008 General Session