7-6-4438. Tax levy and expenditures for municipal and administrative purposes when limits on municipal indebtedness exceeded. (1) Subject to 15-10-420, taxes levied and collected for municipal and administrative purposes by any city or town in which the indebtedness equals or exceeds the limit allowed by statute may be used in payment of current expenses during the fiscal year for which the taxes were levied as if a special levy had been made for each of the purposes. The council of the city or town may designate the amount of the general levy applicable to each of the purposes. The amount designated constitutes a special fund for the special purpose of paying the expenses incurred for the purpose. The expenses are payable only out of the fund.

(2) Subject to 15-10-420, a city, the indebtedness of which equals or exceeds the limit allowed by statute, may levy and collect special taxes for municipal and administrative purposes, and the city council in making special levies shall designate the amount for each of the purposes. Each tax, when collected, constitutes a fund out of which the expenses incurred for the purpose for which the tax was levied must be paid. The expenses incurred for any particular purpose may be paid only out of the specified fund.