State Codes and Statutes
Statutes > Utah > Title-53b > Chapter-21 > 53b-21-10253B-21-102. Bonds do not create state indebtedness -- Special obligations --Discharge of bonded indebtedness -- Agreements and covenants by the board regardingbonds -- Enforcement by court action.
(1) (a) The bonds issued under this chapter are not an indebtedness of the state, of theinstitution for which they are issued, or of the board.
(b) They are special obligations payable solely from the revenues derived from theoperation of the building and student building fees, land grant interest, net profits fromproprietary activities, and any other revenues pledged other than appropriations by theLegislature as provided in Sections 53B-21-101 and 53B-21-111.
(c) (i) Notwithstanding any other provision of law, the chair of the board shall certifyannually by December 1 any amount required to:
(A) restore any debt service reserve funds established by the board for bonds issuedunder this chapter to the amount required by the related authorizing proceedings; or
(B) meet projected shortfalls of payment of principal or interest or both for the followingyear on any bonds issued under this chapter.
(ii) The governor may request from the Legislature an appropriation of the amountcertified under Subsection (1)(c)(i) to restore the debt service reserve funds to their requiredamounts or to meet any projected principal or interest payment deficiency.
(d) (i) The state may not alter, impair, or limit the rights of bondholders or personscontracting with the board until the bonds, including interest and other contractual obligations,are fully met and discharged.
(ii) Nothing in this chapter precludes an alteration, impairment, or limitation if provisionis made by law for the protection of bondholders or persons entering into contracts with theboard.
(2) The board shall pledge all or any part of the revenues to the payment of principal ofand interest on the bonds.
(3) In order to secure the prompt payment of principal and interest and the properapplication of the revenues pledged, the board may, by appropriate provisions in the resolutionauthorizing the bonds:
(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 building and the collection and disposition of therevenues derived from the operation;
(c) collect student building fees from all students, and pledge the fees to the payment ofbuilding bonds;
(d) covenant as to the rights, liabilities, powers, and duties arising from the breach of anycovenant or agreement into which it may enter in authorizing and issuing the bonds;
(e) covenant and agree to carry insurance on the building, and its use and occupancy, andprovide that the cost of any insurance is part of the expense of operating the building;
(f) vest in a trustee:
(i) the right to receive all or any part of the income and revenues pledged and assigned toor 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 bondsin any specified amount or percentage may exercise such rights and enforce any or all covenantsand resort to any appropriate remedies;
(g) (i) fix rents, charges, and fees, including student building fees, to be imposed inconnection with and for the use of the building and its facilities, which are:
(A) income and revenues derived from the operation of the building; and
(B) expressly required to be fully sufficient either by themselves or with land grantinterest and net profits from proprietary activities, or from sources other than by appropriationsby the Legislature to such issuing institutions to assure the prompt payment of principal of andinterest on the bonds as each becomes due; and
(ii) make and enforce rules with reference to the use of the building and with reference torequiring any class or classes of students to use the building as desirable for the welfare of theinstitution and its students or for the accomplishment of the purposes of this chapter;
(h) covenant to maintain a maximum percentage of occupancy of the building;
(i) covenant against the issuance of any other obligations payable from the revenues to bederived from the building, unless subordinated;
(j) make provision for refunding;
(k) covenant as to the use and disposition of sources of revenue other than those derivedfrom appropriations by the Legislature, and pledge those sources of revenues to the payment ofbonds issued under this chapter;
(l) make other covenants considered necessary or advisable to effect the purposes of thischapter; and
(m) delegate to the chair, vice-chair, or chair of the Budget and Finance Subcommitteethe authority:
(i) to approve any changes with respect to interest rate, price, amount, redemptionfeatures, and other terms of the bonds as are within reasonable parameters set forth in theresolution; 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 arebinding in all respects upon the board and its officials, agents, and employees, and upon itssuccessors.
(b) They are enforceable by appropriate action or suit at law or in equity brought by anyholder or holders of bonds issued under this chapter.
Amended by Chapter 324, 2010 General Session
