Section 16-13-98

Preference and payment of warrants and care of fund.

All warrants issued hereunder by a county or city board of education shall be payable solely from the county or city board of education's apportioned share of the proceeds of the special tax in respect of which they were issued, but this shall not prohibit their payment from any other funds which may be available therefor under any other provision of law; provided, that in no event shall such warrants be payable from such other funds if the effect thereof would be to subject such warrants to any constitutional debt limit or to any constitutional requirement that they be authorized by vote of the qualified voters. All warrants issued hereunder shall be preferred claims against the county or city board of education's apportioned share of said tax as herein provided. All valid pledges of the said tax heretofore made, whether made to secure warrants or otherwise, shall remain valid and effective, and successive pledges so made of the same tax shall remain entitled as between each other to preference in the order in which they were made. All warrants issued hereunder, whether capital outlay or refunding, and including warrants heretofore issued under Act No. 94 (1936, Ex. Sess., p. 58), approved April 6, 1936, shall be secured by pledge of the entire net proceeds of the county or city board of education's apportioned share of said tax, subordinate to all pledges thereof heretofore or hereafter made before the issue of the said warrants, but superior to all pledges thereof made after the issue of the said warrants; provided, that all warrants hereafter authorized hereunder by the county or city board of education at one session but delivered at different times shall as against other warrants have preference as of the date when the first delivery of such warrants was made and as between each other shall be of equal rank. All warrants issued hereunder, as well as all valid pledges of the said tax heretofore made, shall have preference over claims for salaries or other operating expenses or any other purpose. In each fiscal year the proceeds of the said tax shall be deposited as soon as received by the custodian of school funds or the city treasurer, as the case may be, in a bank approved for that purpose by the State Superintendent of Education upon the advice of the State Superintendent of Banks or other chief state officer having supervision over banking matters, in a separate account to an amount sufficient for the payment of all claims secured by a valid pledge of the said tax and due in that fiscal year, including the principal and interest of all warrants issued hereunder due in that fiscal year or due in any prior year and remaining unpaid with six percent interest on such overdue claims. After such amount has been so deposited the balance of the proceeds of the said tax may be used for any proper purpose without regard to the said pledges or warrants. Such deposit shall be held as a trust fund for the payment of the claims for which it was established and shall be applied to the payment of all such claims as they become due; provided, that no such claim shall be paid therefrom unless after such payment sufficient funds will remain in said deposit to pay all such claims which are secured by a pledge of the said tax superior to the pledge securing the claim to which such payment is to be applied, and such deposit shall be applied to no other purpose until all such claims are satisfied. Any custodian, treasurer, superintendent of education, member of a board of education or other officer who shall by vote or in any other manner cause, aid or encourage any diversion of any such deposit to any other purpose or any misappropriation thereof whereby loss or injury to the owner or holder of any such claim is caused shall be jointly and severally liable, both personally and upon his official bond, if bonded, to such owner or holder to the extent of such loss or injury, including attorneys' fees and other collection costs. Any failure to make such deposit as required by the section or to apply the same as herein provided shall be construed as a diversion or a misappropriation, and any owner or holder of any claim then or at any time in the future payable from such fund may at any time enter suit in any court of competent jurisdiction against the official responsible therefor and the surety upon his official bond, if bonded, both to recover for any loss or injury thereby sustained and to compel the observance of these provisions in the future.

(Acts 1939, No. 186, p. 334, § 2; Code 1940, T. 52, §217; Acts 1982, 2nd Ex. Sess., No. 82-778, p. 282, §2.)