11-42-702. Reserve fund.
326 words·~1 min read·
/ut/title-11/chapter-42/11-42-702A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
11-42-702. Reserve fund.
(1)In lieu of creating and funding a guaranty fund under Section 11-42-701 for an issue of assessment bonds or refunding assessment bonds, a local entity may establish a reserve fund to secure the issue.
(2)If a local entity establishes a reserve fund under this section:
(a)the bonds secured by the reserve fund are not secured by a guaranty fund under Section 11-42-701 ;
(b)the local entity is not required to fund a guaranty fund under Section 11-42-701 for those bonds; and
(c)unless otherwise provided in this part or in the proceedings authorizing the issuance of bonds, the provisions of this part regarding a guaranty fund have no application to the bonds that are secured by the reserve fund.
(3)Each local entity that establishes a reserve fund shall:
(a)fund and replenish the reserve fund in the amounts and manner provided in the proceedings authorizing the issuance of the bonds that are secured by the reserve fund; and
(b)invest the funds on deposit in the reserve fund as provided in Title 51, Chapter 7, State Money Management Act .
(a)Subject to Subsection (4)(b) , a local entity may replenish a reserve fund under this section by any of the methods described in Subsection 11-42-701(1)(b) .
(b)The proceedings authorizing the issuance of assessment bonds or refunding assessment bonds shall provide that if a local entity uses any of the methods described in Subsection 11-42-701(1)(b) to replenish a reserve fund, the local entity shall be reimbursed, with interest at a rate that the local entity determines, with money that the local entity receives from foreclosing on delinquent property.
(5)Upon the retirement of bonds secured by a reserve fund, the local entity shall:
(a)terminate the reserve fund; and
(b)disburse all remaining money in the fund as provided in the proceedings authorizing the issuance of the bonds.
Amended by Chapter 246 , 2009 General Session