A. All money received by the municipality from any special assessment or assessment within an improvement district shall be held in a special fund and used to:

(1) pay the cost of the improvement for which the assessment was made;

(2) reimburse the municipality for any work performed by the municipality in constructing the improvement and for administrative costs associated with the improvement district; or

(3) pay the interest and principal due on any outstanding bonds or assignable certificates.

B. Any person who uses money in an improvement district fund other than as provided in this section is guilty of a felony and shall be punished by a fine not exceeding one thousand dollars ($1,000) or by imprisonment in the state penitentiary for not more than two years or by both such fine and imprisonment in the discretion of the court.

History: 1953 Comp., § 14-32-24, enacted by Laws 1965, ch. 300; 1991, ch. 199, § 21.

The 1991 amendment, effective April 4, 1991, in Subsection A, added "and for administrative costs associated with the improvement district" at the end of Paragraph (2), deleted "negotiable coupon" preceding "bonds" in Paragraph (3), and made a minor stylistic change.

Municipality must act as fiduciary. — In dealing with the special fund, the municipality must act with all the care of a fiduciary. 1957 Op. Att'y Gen. No. 57-289.

Moneys collected may not be transferred for other uses until and unless all bonds have been paid in full. 1955 Op. Att'y Gen. No. 55-6232.

Appropriate investment of the proceeds of special assessments, held awaiting the time when they can be applied on account of the obligation of bonds thereby secured, violates neither the letter nor the spirit of this section. 1957 Op. Att'y Gen. No. 57-289.

Interest earned by invested proceeds. — In the event that proper investment of the proceeds of special assessments should be made, the interest earned by such funds is to be viewed as belonging to the special fund in question, as an increment thereto, in the absence of a dispositive statutory provision. 1957 Op. Att'y Gen. No. 57-289.

Am. Jur. 2d, A.L.R. and C.J.S. references. — Diversion, misappropriation or withholding of funds collected by and paid to municipality, on account of special assessments against property for improvements, liability of municipality because of, 107 A.L.R. 1354.

64 C.J.S. Municipal Corporations § 1884.