App.A:4-37. Security for payment; resolution requiring separate appropriations; taxes; trust fund

6. The full faith and credit of any municipality issuing bonds pursuant to this act shall be deemed to be pledged for the payment of the principal of and interest on such bonds. The governing body of any such municipality may, by resolution adopted prior to the issuance of said bonds, determine that the sums required for the payment of the principal of and interest on any bonds issued pursuant to this act shall be appropriated, levied by tax, and collected in the manner provided in this section. If such resolution is adopted, a separate and specific appropriation for the payment of such principal and interest shall be made in the budget for each fiscal year following the issuance of such bonds. The amount of such appropriation shall be in the same proportion to the amount required for the payment of such principal and interest then due or to become payable during such fiscal year as the amount of all taxes levied upon the taxable property in such municipality for the previous fiscal year bears to the amount of such taxes which were actually collected by or paid to the tax collector of such municipality during such previous fiscal year. Thereafter it shall be the duty of the tax collector of such municipality to set aside out of each payment of taxes levied for the year for which such budget was adopted, a portion of such payment, which shall be in the same proportion to the total payment as the amount of such appropriation bears to the total amount of taxes levied upon the taxable property in such municipality for such fiscal year and collectible by such tax collector. The sums so set aside shall be forthwith deposited in the trust fund described in section seven of this act. The amount of cash in said trust fund at the end of any fiscal year shall be applied to the reduction of the appropriations to be made for the principal and interest of such bonds in the following year. Any such resolution so adopted shall be deemed a contract between such municipality and the holders of said bonds; provided, that the legislature may on and after January first, one thousand nine hundred and forty-four, permit the rescission, alteration, abrogation or amendment of such resolution and any contract or contracts constituted thereby. Any such resolution may also provide that the portion of each payment of taxes required to be set aside as hereinbefore provided shall be paid only with lawful money of the United States of America; provided, however, that any such provision in any such resolution shall not affect the contract rights of the holders of any obligations of said municipality theretofore issued.

(L.1934, c. 233, s. 6, p. 673.)