17D-1-503 - Levy to pay for general obligation bonds.
17D-1-503. Levy to pay for general obligation bonds.
(1) (a) If a special service district has issued general obligation bonds, or expects to havedebt service payments due on general obligation bonds during the current year, the legislativebody of the county or municipality that created the special service district may make an annuallevy of ad valorem property taxes in order to:
(i) pay the principal of and interest on the general obligation bonds;
(ii) establish a sinking fund for defaults and future debt service on the general obligationbonds; and
(iii) establish a reserve to secure payment of the general obligation bonds.
(b) A levy under Subsection (1)(a) is:
(i) without limitation as to rate or amount; and
(ii) subject to the prior approval of a majority of registered voters of the special servicedistrict voting in an election held for that purpose.
(2) (a) Each county or municipality that levies a tax under Subsection (1) shall:
(i) levy the tax as a separate and special levy for the specific purposes stated inSubsection (1); and
(ii) apply the proceeds from the levy solely for the purpose of paying the principal of andinterest on the general obligation bonds, even though the proceeds may be used to establish orreplenish a sinking fund under Subsection (1)(a)(ii) or a reserve under Subsection (1)(a)(iii).
(b) A levy under Subsection (2)(a) is not subject to a priority in favor of a special servicedistrict obligation in existence at the time the bonds were issued.
Enacted by Chapter 360, 2008 General Session