A. Prior to the department's lease of any project to an eligible entity, the authority shall determine:

(1) the amount necessary in each year to pay the principal of and interest on project revenue bonds to be issued to finance the project;

(2) the amount necessary to be paid each year into any reserve funds the authority establishes in connection with the retirement of the proposed project revenue bonds and the maintenance and repair of the project; and

(3) unless the terms under which the project is to be leased provide that the lessee shall maintain the project and carry all proper insurance with respect to the project, the estimated cost of maintaining the project in good repair and keeping it properly insured.

B. The determinations required by Subsection A of this section shall be set forth in the resolution under which the proposed project revenue bonds are to be issued; and prior to the issuance of the bonds, the department shall lease or sell the project to a lessee or purchaser pursuant to an agreement conditioned upon completion of the project and providing for payment to the department and assigned to the authority or a trustee, of such rentals or payments as will be sufficient to:

(1) pay the principal of and interest on the bonds issued to finance the project;

(2) build up and maintain any reserve established by the authority for the bonds; and

(3) pay the costs of maintaining the project in good repair and keeping it properly insured, unless the lease obligates the lessee to pay for the maintenance and insurance of the project.

History: Laws 2003, ch. 349, § 8; 2005, ch. 103, § 8.

The 2005 amendment, effective April 4, 2005, changed "bonds" to "project revenue bonds" and "project property" to "project".