Sec. 15. (a) Prepaid assessments constitute a special fund to be held in trust by the municipality for the owner or owners of the bonds upon which the prepayments have been made.
(b) The municipal fiscal officer shall promptly invest and reinvest the special fund in securities of the federal government so that the principal will be available to pay the bonds upon which prepayments were collected as the bonds become due. The interest collected on these securities shall be applied to the payment of the interest lost on account of the prepayment of the assessments. The difference between the interest lost on account of the prepayment of assessments and the amount of interest earned by the investment in federal securities shall be paid by the municipal corporation that issued the improvement bonds.
(c) If the terms of the bonds allow early redemption for and to the extent of prepayments of the assessments in anticipation of which the bonds were issued, the municipality may use prepaid assessments to redeem outstanding bonds. However, if the bonds are issued on each parcel of real property covering the assessment against the real property, the municipality shall pay the prepayment to the holder of the bonds and cancel the bonds.
As added by P.L.98-1993, SEC.8.
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