Sec. 21. (a) Interest penalties collected under section 20(b) of this chapter shall be credited to an account to be known as the surplus Barrett Law account. The amount credited shall be a part of the waivered municipal improvement funds. The money in the surplus Barrett Law account may be used as follows:

(1) To pay the interest on improvement assessments that is lost or forgiven due to the prepayment of installments of assessments.

(2) If the amount of money in the account exceeds five (5) times the average annual amount of lost or forgiven interest paid under subdivision (1) during the preceding three (3) years, that excess may be used for any of the following:

(A) The purchase of equipment for or pay expenses incurred by the municipal fiscal officer in performing the municipal fiscal officer’s duties under the Barrett Law.

(B) Providing debt service reserves or other security for bonds issued by the municipality under this chapter, IC 36-9-36, IC 36-9-38, or IC 36-9-39 (or under IC 36-9-18 through IC 36-9-21 before the repeal of those provisions in 1993).

     (b) If payments of delinquent principal, delinquent interest, and interest penalties that are collected during any six (6) month period ending on May 10 or November 10 are sufficient to pay one percent (1%) of the face value of the bonds, all payments during that six (6) month period shall be applied to the payment of bonds after the next February 1 or August 1. However, if there are no more delinquent collections to be made, payment of the amounts collected shall be made in full.

     (c) The fact that collections during a six (6) month period are insufficient to pay one percent (1%) of the face value of the bonds does not require the bonds to be marked “not paid for want of funds”.

As added by P.L.98-1993, SEC.8.