11-42-702 - Reserve fund. - Utah Statutes

11-42-702. Reserve fund.
(1) In lieu of creating and funding a guaranty fund under Section 11-42-701 for an issueof assessment bonds or refunding assessment bonds, a local entity may establish a reserve fund tosecure 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 underSection 11-42-701;
(b) the local entity is not required to fund a guaranty fund under Section 11-42-701 forthose bonds; and
(c) unless otherwise provided in this part or in the proceedings authorizing the issuanceof bonds, the provisions of this part regarding a guaranty fund have no application to the bondsthat 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 theproceedings 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.
(4) (a) Subject to Subsection (4)(b), a local entity may replenish a reserve fund under thissection by any of the methods described in Subsection 11-42-701(1)(b).
(b) The proceedings authorizing the issuance of assessment bonds or refundingassessment bonds shall provide that if a local entity uses any of the methods described inSubsection 11-42-701(1)(b) to replenish a reserve fund, the local entity shall be reimbursed, withinterest at a rate that the local entity determines, with money that the local entity receives fromforeclosing 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 authorizingthe issuance of the bonds.

Amended by Chapter 246, 2009 General Session