Bond proceeds must be used only for authorized purposes; unused proceeds may be redirected or used to prepay or redeem the bonds if the original purpose is no longer needed.
§513. Application of proceeds A. The proceeds of bonds issued under this Part shall be used exclusively for the purpose or purposes for which the bonds are authorized to be issued, including but not limited to the payment of costs of issuance, the cost of funding any required debt service reserves, the cost of credit enhancement or the cost of a financial products agreement. The purchaser of the bonds shall not be obliged to see to the application thereof. In the event that the governing authority of the governmental entity that issued bonds determines that all or part of the proceeds of the sale of such bonds are no longer needed or required for the purpose for which the bonds were originally issued, the governing authority may rededicate such unexpended proceeds for a different purpose, provided that such different purpose is one for which the bonds could have been originally issued, or it may utilize the unexpended proceeds to prepay or redeem such bonds. B. Any premium received by a governmental entity in connection with the sale of bonds shall be expended for: (1) Any purpose for which the bonds are being issued and deposited in the same account into which the bond proceeds are deposited for such purpose. (2) The payment of the principal or the interest on the bonds and shall be deposited in a sinking fund or debt service fund established for such purpose. C. Any accrued interest received by a governmental entity in connection with the sale of bonds shall be applied to the payment of principal or interest on such bonds, and deposited in a sinking fund or debt service fund established for such purpose. Acts 2018, No. 569, §1, eff. July 1, 2018.