§ 11-42a-404 — Reducing assessments after issuance of refunding assessment bonds -- Retroactive effect.

(1) Each local entity that issues a refunding assessment bond shall adopt a resolution or ordinance amending the previously adopted energy assessment resolution or ordinance that:

(1)(a) reduces, as determined by the local entity's governing body:
(1)(a)(i) the assessments levied under the previous resolution or ordinance;
(1)(a)(ii) the interest payable on the assessments levied under the previous resolution or ordinance; or
(1)(a)(iii) both the assessments levied under the previous resolution or ordinance and the interest payable on those assessments;
(1)(b) allocates the reductions under Subsection (1)(a) so the then unpaid assessments levied against benefitted property within the assessment area and the unpaid interest on those assessments receive a proportionate share of the reductions;
(1)(c) states the amounts of the reduced payment obligation for each property assessed in the prior resolution or ordinance; and
(1)(d) states the effective date of any reduction in the assessment levied in the prior resolution or ordinance.
(2) In a resolution or ordinance described in Subsection (1), the local entity is not required to describe each block, lot, part of a block or lot, tract, or parcel of property assessed.
(3) The local entity shall ensure that each reduction under Subsection (1)(a) is equal to the amount by which the principal, interest, or combined principal and interest payable on the refunding assessment bond, after accounting for incidental refunding costs associated with the refunding assessment bond, is less than the amount of principal, interest, or combined principal and interest payable on the prior bonds.
(4) A reduction under Subsection (1)(a) does not apply to an assessment or interest paid before the reduction.
(5) A resolution or ordinance under Subsection (1) may not become effective before the date when any principal, interest, redemption premium on the prior bonds, and advances under Subsection 11-42-607(5)(a) are fully paid or legally considered to be paid.
(6) Except for the amount of reduction to a prior assessment or interest on a prior assessment, neither the issuance of a refunding assessment bond nor the adoption of a resolution or ordinance under Subsection (1) affects:

(6)(a) the validity or continued enforceability of a prior assessment or interest on the assessment; or
(6)(b) the validity, enforceability, or priority of an energy assessment lien.
(7) Each reduction of a prior assessment and the interest on the assessment continues to exist in favor of the refunding assessment bonds.
(8) Even after payment in full of the prior bonds that a refunding assessment bond refunds, an energy assessment lien continues to exist to secure payment of:

(8)(a) the reduced payment obligations;
(8)(b) the penalties and costs of collection of those obligations; and
(8)(c) the refunding assessment bond.
(9) A lien securing a reduced payment obligation from which a refunding assessment bond is payable and by which the bond is secured is subordinate to an energy assessment lien that secures the original or prior assessment and prior bonds until the prior bonds are paid in full or legally considered to be paid in full.
(10) Unless prior bonds are paid in full simultaneously with the issuance of a refunding assessment bond, the local entity shall:

(10)(a) irrevocably set aside the proceeds of the refunding assessment bond in an escrow or other separate account; and
(10)(b) pledge the account described in Subsection (10)(a) as security for the payment of the prior bonds, the refunding assessment bond, or both.
(11) This part applies to any refunding assessment bond:

(11)(a) regardless of whether the local entity already issued the bond; and
(11)(b) regardless of whether the local entity issued the prior bonds that the bond refunded under prior law and regardless of whether that law is currently in effect.

Legislative History

Enacted by Chapter 470, 2017 General Session