Public finance law includes state and federal laws and regulations governing the financing of public organizations and projects. For example, public finance laws and regulations govern the sale and purchase of bonds to build or improve schools, parks, roads, airports, cultural facilities, recreational facilities, entertainment venues (sports arenas), and other public works projects.
Bonds are debts issued by governments (the debtor), for example, to purchasers of the bonds (the creditors), with a promise to pay the bondholder interest (a coupon) and repay the principal amount upon a certain date (maturity date)—similar to an IOU or loan agreement. Bonds are securities that can often be traded (bought and sold) to and from others on the secondary market.
In Utah, public finance law is governed by both state statutes and federal regulations. These laws oversee the issuance and management of bonds by public entities such as state and local governments, which are used to fund various public projects including schools, parks, roads, and cultural facilities. The state of Utah has specific provisions under the Utah Code that regulate how these bonds can be issued, the process for approval, and the management of the funds raised. For instance, the Utah Municipal Bond Act provides guidelines for municipalities issuing bonds. Additionally, federal laws such as the Securities Act of 1933 and the Securities Exchange Act of 1934, along with regulations from the Securities and Exchange Commission (SEC), also apply to the trading of these securities in the secondary market. These laws ensure that the bonds are issued in a transparent manner, that investors are provided with essential information, and that the market remains fair and orderly. Bondholders are entitled to receive periodic interest payments and the return of principal at maturity, as specified in the bond's terms.