Section 11-81-16

Published: 2015

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Section 11-81-16

Section 11-81-16Pledge of revenues from certain taxes, utilities, etc., for payment of principal and interest on bonds.

In any case in which a county or municipality may hereafter issue any bonds which are general obligations of such county or municipality, there may be pledged to the payment of the principal of an interest on such bonds all or any part or portion of funds which may be derived from any one or more of the following sources and which shall not be required for the purpose of making good any valid pledge thereof theretofore made or which are not required by the Constitution to be devoted to other purposes and which such county or municipality may at any time be authorized to levy, collect or receive:

(1) The proceeds of any property tax;

(2) The proceeds of any license, privilege or occupational tax, excepting such license taxes as may be levied by municipalities for conducting business outside their corporate limits;

(3) The portion of any license, privilege or occupational tax levied under any law heretofore or hereafter enacted which may be apportioned and paid to such municipality or county; and

(4) The revenues of any waterworks, sewerage system, electric light and power plant, airport or any other utility maintained and operated by such municipality or county.

The provisions making such pledge shall have the force of contract between the county or municipality and the holders of such bonds. No property tax thus pledged and no rate or charge for the services rendered by such utility shall be reduced or diminished to such an extent that the tax or revenue pledged will not be sufficient to meet the interest and sinking fund or principal requirements of such bonds. Any tax or revenue so pledged shall constitute a trust fund or funds which shall be impressed with a lien in favor of the holders of the bonds to the payment of which such funds are pledged. In the event such county or municipality should pledge any tax or revenues as authorized by this section, the ordinance or resolution authorizing the issuance of such bonds may provide that such county or municipality shall not be required to levy the tax provided for in Section 11-81-15, but shall be required to levy only such property taxes, license, privilege or occupational taxes as may be so pledged under authority of this section. Notwithstanding any contrary provisions of any general or local law, the ordinance or resolution authorizing the issuance of any such bonds may contain provisions or covenants whereby, so long as any such bonds shall be outstanding, any license, privilege or occupational tax thus pledged shall be levied and collected in each year without reduction in the aggregate annual amount of such license, privilege or occupational taxes so pledged.

(Acts 1935, No. 195, p. 575; Code 1940, T. 37, §264; Acts 1949, No. 26, p. 38; Acts 1961, Ex. Sess., No. 60, p. 1928; Acts 1979, No. 79-775, p. 1378.)