Provisions for interest payments; tax levy.

A. Subject to any applicable limitations on indebtedness, with respect to refunding bonds, there may be included in the principal amount, and paid from the proceeds, of bonds issued pursuant to the Public Securities Short-Term Interest Rate Act capitalized interest for three years or such longer period as may otherwise be authorized by law. The proceeds of any levy of property taxes to the extent levied for interest on indebtedness for any period of time covered by such capitalized interest may be used to reimburse the improvement fund for the previous payment of interest from such fund. B. To the extent that bonds issued pursuant to the Public Securities Short-Term Interest Rate Act constitute indebtedness, the officials now or hereafter charged by law with the duty of levying general (ad valorem) taxes for the payment of bonds and interest shall, in the manner provided by law, make an annual levy sufficient to meet the payments of principal and interest on such bonds maturing. Nothing herein contained shall be so construed as to prevent the municipal corporation from applying any other funds that may be in the treasury or investment income actually received from sinking fund investments and available for that purpose, or the proceeds of renewal or refunding bonds or any other funds lawfully available therefor to the payment of the interest on or the principal of or any prior redemption premium in connection with such bonds as the same become due; and the levy or levies of taxes may be diminished to the extent such other revenues are or will be available for the payment of principal and interest of the bonds. Any levy of property taxes for interest on indebtedness for any year may be for the maximum interest that may be payable under the applicable bond legislation in the year in which such levy is collected. If, after provision for payment of interest in that year, there is any amount remaining from the collection of property taxes levied for such interest, it shall be used in succeeding years for the payment of interest on the bonds, and the levy for the succeeding years to provide money for the payment of principal of and interest on the bonds shall be reduced accordingly, except that any such remainder may be used at any time for payment of principal of the bonds if and to the extent permitted by the bond proceedings, provided that the bond legislation shall permit the eventual application of all money collected from such levies to the payment of principal of and interest on indebtedness.