11-42-703 - Payment from guaranty fund or reserve fund if insufficient funds available in the assessment fund -- Payment by warrant from guaranty fund or reserve fund -- Subrogation.
11-42-703. Payment from guaranty fund or reserve fund if insufficient fundsavailable in the assessment fund -- Payment by warrant from guaranty fund or reservefund -- Subrogation.
(1) If a bond is presented to the local entity for payment at a time when there isinsufficient money in the assessment fund to pay the amount due, the local entity shall pay theamount due from the guaranty fund or, if applicable, reserve fund.
(2) If there is insufficient money in the guaranty fund or, if applicable, the reserve fund topay the amount due under Subsection (1), the local entity may pay by a warrant drawn against theguaranty fund or, if applicable, reserve fund.
(3) If a local entity pays from its guaranty fund or reserve fund any principal or interestowing under a bond:
(a) the local entity is subrogated to the rights of the bond holders; and
(b) the proceeds from the bond shall become part of the guaranty fund or reserve fund, asthe case may be.
Enacted by Chapter 329, 2007 General Session