§ 36-9-37-35 — Bonds; insufficient funds for payment; issuance of certificates of indebtedness

(a) When the principal of or interest on
bonds issued in anticipation of the collection of special assessments is
due for payment, the municipal fiscal officer shall issue certificates of
indebtedness to the owner of the bonds if:
(1) there is not enough money in the municipal improvement fund
to pay the principal of or interest on the bonds in full; and
(2) at least one (1) of the conditions listed in subsection (b) is
met.
(b) The municipal fiscal officer shall issue certificates of
indebtedness for the amounts unpaid if the principal of or interest on
the bonds cannot be paid because of any of the following:
(1) The stoppage of interest due to the prepayment of
assessments.
(2) The failure to collect interest to the due date of the prepaid
installments.
(3) The failure to reinvest prepaid assessments in the manner
prescribed by this chapter.
(4) The diversion of money paid on one (1) assessment roll and
account to the payment of the principal of or interest on bonds to
another assessment roll and account.
(5) The loss of improvement money due to the closing and
insolvency of a bank or trust company in which the money was on
deposit.
(6) Any other diversion or misapplication of money collected for
payment of the principal of or interest on bonds for which the
municipality is liable.
(c) The amounts of certificates of indebtedness issued under this
section shall be computed in the following manner:
(1) If the certificates are issued for a deficiency resulting from
prepayment of assessments, the amount:
(A) is limited to the amount of interest that would have been
payable at the respective due dates of the installments of
assessments if the assessments had not been prepaid; and
(B) does not include interest between the time of the due dates
and the issuance of the certificates.
(2) If the certificates are issued for a deficiency resulting from a
diversion of money, the amount:
(A) is limited to the amount that would have been due if the
diversion had not occurred; and
(B) does not include any interest after the date on which
payment of the principal of or interest on the bonds is due.
(3) If the certificates are issued for a deficiency resulting from the
loss of improvement money due to the closing and insolvency of
a bank or trust company in which the money was on deposit, the
amount is limited to:
(A) the actual amount deposited, plus interest at the depository
rate up to the time of the closing of the bank or trust company;
less
(B) any amounts that are recovered from any source by reason
of the deposits and loss.
(d) No part of any delinquent assessments or installments, or of any
interest on the delinquent assessments after the due date of the
assessments, may be included in a certificate of indebtedness.
(e) The deficiency and diversion remedial provisions of this section
do not make a municipality liable in any manner for any of the
following:
(1) Assessments or installments of assessments not paid by the
owner of the property assessed.
(2) Interest on any unpaid assessment or installment.

Legislative History

As added by P.L.98-1993, SEC.8.