responsibility of a local entity that issues assessment bonds. (1) Assessment bonds are not a general obligation of the local entity that issues them. (2) A local entity that issues assessment bonds: (a) may not be held liable for payment of the bonds except to the extent of: (i) funds created and received from assessments against which the bonds are issued; (ii) improvement revenues; and (iii) the local entity's guaranty fund under Section 11-42-701 or, if applicable, reserve fund under Section 11-42-702; and (b) is responsible for: (i) the lawful levy of all assessments; (ii) the collection and application of improvement revenues, as provided in this chapter; (iii) the creation and maintenance of a guaranty fund or, if applicable, a reserve fund; and (iv) the faithful accounting, collection, settlement, and payment of: (A) assessments and improvement revenues; and (B) money in a guaranty fund or, if applicable, a reserve fund. (3) If a local entity illegally assesses property that is exempt from assessment, the local entity: (a) is liable to the holders of assessment bonds for the payment of the illegal assessment; and (b) shall pay the amount for which it is liable under Subsection (3)(a) from the local entity's general fund or other legally available money.
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